EXHIBIT 4.1
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WMC SECURED ASSETS CORP.,
Company,
WMC MORTGAGE CORP.,
Master Servicer,
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of September 30, 1999
--------------------------------------------
Mortgage Pass-Through Certificates
Series 1999-A
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................4
Section 1.02. Allocation of Certain Interest Shortfalls.............................................40
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans..........................................................42
Section 2.02. Acceptance by Trustee.................................................................45
Section 2.03. Representations, Warranties and Covenants of the Master Servicer
and the Company.......................................................................46
Section 2.04. Enforcement of Representations and Warranties.........................................48
Section 2.05. Reserved..............................................................................50
Section 2.06. Issuance of Certificates and Uncertificated REMIC I Regular
Interests Evidencing Interests in REMIC I; Conveyance of
Uncertificated REMIC I Regular Interests..............................................50
Section 2.07. Issuance of Certificates and Uncertificated REMIC II Regular
Interests Evidencing Interests in REMIC II; Conveyance of
Uncertificated REMIC II Regular Interests.............................................50
Section 2.08. Issuance of Certificates Evidencing Interests in REMIC III............................51
Section 2.09 Conveyance of the Subsequent Mortgage Loans...........................................51
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Assure Servicing...................................................53
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicer.......................54
Section 3.03. Successor Subservicers................................................................55
Section 3.04. Liability of the Master Servicer......................................................55
Section 3.05. Assumption or Termination of Subservicing Agreements by Trustee.......................55
Section 3.06. Collection of Mortgage Loan Payments..................................................56
Section 3.07 Withdrawals from the Certificate Account..............................................58
Section 3.08. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts....................................................................59
Section 3.09 Reserved..............................................................................60
Section 3.10 Mortgage Impairment Insurance.........................................................60
Section 3.11 Maintenance of Hazard Insurance and Fidelity Coverage.................................60
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Section 3.12 Due-on-Sale Clauses; Assumption Agreements............................................61
Section 3.13 Realization Upon Defaulted Mortgage Loans.............................................62
Section 3.14 Trustee to Cooperate; Release of Mortgage Files.......................................63
Section 3.15 Servicing Compensation................................................................64
Section 3.16 Annual Statements of Compliance.......................................................64
Section 3.17 Annual Independent Public Accountants' Servicing Report...............................64
Section 3.18. Optional Purchase of Defaulted Mortgage Loans.........................................65
Section 3.19. Information Required by the Internal Revenue Service Generally
and Reports of Foreclosures and Abandonments of
Mortgaged Property....................................................................65
Section 3.20. Title, Management and Disposition of REO Property.....................................65
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Distribution Account; Investment of Accounts..........................................69
Section 4.02. Distributions.........................................................................69
Section 4.03. Statements to Certificateholders......................................................76
Section 4.04. Reserved..............................................................................78
Section 4.05. Allocation of Realized Losses.........................................................78
Section 4.06. 1934 Act Reports......................................................................80
Section 4.07. Reserved..............................................................................81
Section 4.09 Monthly Advances......................................................................81
Section 4.10 Compensating Interest Payments........................................................81
Section 4.11 Pre-Funding Account...................................................................81
Section 4.12 Capitalized Interest Account..........................................................82
Section 4.13 Reserved..............................................................................83
Section 4.14. Compliance with Withholding...........................................................83
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates......................................................................84
Section 5.02. Registration of Transfer and Exchange of Certificates.................................86
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.....................................91
Section 5.04. Persons Deemed Owners.................................................................91
Section 5.05. Appointment of Paying Agent...........................................................91
Section 5.06. ERISA Deemed Representation...........................................................91
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ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Company and the Master Servicer.........................93
Section 6.02. Merger or Consolidation of the Company or the Master Servicer.........................93
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others............................................................................93
Section 6.04. Company and Master Servicer Not to Resign.............................................94
Section 6.05. Appointment of Special Servicer.......................................................95
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.....................................................................96
Section 7.02 Trustee to Act; Appointment of Successor..............................................97
Section 7.03 Waiver of Events of Default...........................................................98
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee....................................................................100
Section 8.02. Certain Matters Affecting the Trustee................................................102
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans................................103
Section 8.04. Trustee May Own Certificates.........................................................104
Section 8.05. Trustee's Fees and Expenses; Indemnification.........................................104
Section 8.06. Eligibility Requirements for Trustee.................................................105
Section 8.07. Resignation and Removal of the Trustee...............................................105
Section 8.08. Successor Trustee....................................................................106
Section 8.09. Merger or Consolidation of Trustee...................................................107
Section 8.10. Appointment of Co-Trustee or Separate Trustee........................................107
Section 8.11. Appointment of Custodians............................................................108
Section 8.12. Appointment of Office or Agency......................................................108
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by the Master Servicer or the Company or
Liquidation of All Mortgage Loans....................................................109
Section 9.02. Termination of REMIC II and REMIC II.................................................111
Section 9.03. Additional Termination Requirements..................................................111
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.................................................................113
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.....................116
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment............................................................................118
Section 11.02. Recordation of Agreement; Counterparts...............................................120
Section 11.03. Limitation on Rights of Certificateholders...........................................121
Section 11.04. Governing Law........................................................................121
Section 11.05. Notices..............................................................................122
Section 11.06. Notices to Rating Agencies...........................................................122
Section 11.07. Severability of Provisions...........................................................123
Section 11.08. Supplemental Provisions for Resecuritization.........................................123
Section 11.09. Third Party Beneficiaries............................................................124
EXHIBITS
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M Certificates
Exhibit A-3 Form of Class CE Certificate
Exhibit A-4 Form of Class P Certificate
Exhibit B Form of Class R Certificates
Exhibit C-1 Mortgage Loan Schedule
Exhibit C-2 Prepayment Charge Schedule
Exhibit D Form of Request for Release
Exhibit E-1 Form of Initial Certification
Exhibit E-2 Form of Interim Certification
Exhibit E-3 Form of Final Certification
Exhibit F-1 Form of Transfer Affidavit and Agreement
Exhibit F-2 Form of Transferor Certificate
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of ERISA Representation Letter
Exhibit H Form of Transferor Representation Letter
Exhibit I Form of Rule 144A Investment Representation Letter
Exhibit J Form of Subsequent Transfer Agreement
Exhibit K Form of Addition Notice
Exhibit L Form of Lost Note Affidavit
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This is a Pooling and Servicing Agreement, dated as of
September 30, 1999, among WMC SECURED ASSETS CORP. (together with its permitted
successors and assigns, the "Company"), WMC MORTGAGE CORP., as master servicer
(together with its permitted successors and assigns, the "Master Servicer") and
BANK ONE, NATIONAL ASSOCIATION, as trustee (together with its permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company 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 Trust Fund (as defined herein) created hereunder. The Trust Fund will
consist primarily of the Mortgage Loans, the Certificate Account, the
Distribution Account, the Pre-Funding Account and the Capitalized Interest
Account (each, as defined herein).
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets described in the definition of REMIC I (as
defined herein), as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." The Uncertificated REMIC I Regular Interests (as
defined herein) will evidence the "regular interests" in REMIC I and the Class
R-I Certificates will evidence the sole class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein).
The following table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass- Through Rate, the initial Uncertificated Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
Uncertificated REMIC I Regular Interests (as defined herein). None of the
Uncertificated REMIC I Regular Interests will be certificated.
Uncertificated Initial
REMIC I Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
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I-LT1 Variable(2) $ 244,999,902.00 October 15, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 1,925,000.00 October 15, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 193,750.00 October 15, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 137,500.00 October 15, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 106,250.00 October 15, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 2,637,498.00 October 15, ▇▇▇▇
▇-▇▇▇ (3) $ 100.00 October 15, 2029
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Uncertificated REMIC I Regular
Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
(3) The Uncertificated REMIC I Regular Interest I-LTP will not accrue interest.
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets described in the definition of REMIC II (as
defined herein), as a REMIC for federal income tax purposes and such segregated
pool of assets will be designated as "REMIC II." The Uncertificated REMIC II
Regular Interests (as defined herein) will evidence the "regular interests" in
REMIC II and the Class R-II Certificates will evidence the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the
Uncertificated REMIC II Pass- Through Rate, the initial Uncertificated Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
Uncertificated REMIC II Regular Interests. None of the Uncertificated REMIC II
Regular Interests will be certificated.
Uncertificated Initial
REMIC II Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
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II-LT1 Variable(2) $ 244,999,902.00 October 15, 2029
II-LT2 Variable(2) $ 1,925,000.00 October 15, 2029
II-LT3 Variable(2) $ 193,750.00 October 15, 2029
II-LT4 Variable(2) $ 137,500.00 October 15, 2029
II-LT5 Variable(2) $ 106,250.00 October 15, 2029
II-LT6 Variable(2) $ 2,637,498.00 October 15, 2029
II-LTP (3) $ 100.00 October 15, 2029
II-LT2S Variable(2) (4) October 15, 2029
II-LT3S Variable(2) (4) October 15, 2029
II-LT4S Variable(2) (4) October 15, 2029
II-LT5S Variable(2) (4) October 15, 2029
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Uncertificated REMIC II
Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate" herein.
(3) The Uncertificated REMIC II Regular Interest II-LTP will not accrue
interest.
(4) This Uncertificated REMIC II Regular Interest has no Uncertificated
Principal Balance but will accrue interest at the related Uncertificated
REMIC II Pass-Through Rate on the related Uncertificated Notional Amount,
which is equal to the Uncertificated Principal Balance of the
Uncertificated Corresponding Component.
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As provided herein, a segregated pool of assets consisting of the
Uncertificated REMIC II Regular Interests will be designated as "REMIC III," and
the REMIC Administrator will make a separate REMIC election with respect
thereto. The Certificates (other than the Class R Certificates) will evidence
"regular interests" in REMIC III, and the Class R-III Certificates will evidence
the sole class of "residual interests" therein within the meaning of the REMIC
Provisions.
The following table irrevocably sets forth the designation,
Pass-Through Rate, Initial Certificate Principal Balance, and solely for
purposes of satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each Class of Certificates representing
"regular interests" in REMIC III.
Aggregate Initial
Pass-Through Certificate Latest Possible
Designation Rate Principal Balance Maturity Date(1)
----------- ----- ----------------- -------------
Class A Variable(2) $192,500,000.00 October 15, 2029
Class M-1 Variable(2) $19,375,000.00 October 15, 2029
Class M-2 Variable(2) $13,750,000.00 October 15, 2029
Class M-3 Variable(2) $10,625,000.00 October 15, 2029
Class CE Variable(2) $13,749,900.00(3) October 15, 2029
Class P (4) $100.00 October 15, 2029
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class CE Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the Uncertificated REMIC II Regular
Interests (other than the Uncertificated Principal Balance of
Uncertificated REMIC II Regular Interest II-LTP). The Class CE Certificates
will not accrue interest on their Certificate Principal Balance.
(4) The Class P Certificates will not accrue interest.
As of the Initial Cut-off Date, the Initial Mortgage Loans have an
aggregate Cut-off Date Principal Balance equal to $229,988,678.19. The Initial
Mortgage Loans are adjustable rate and fixed rate, closed-end, sub-prime
mortgage loans secured by first lien mortgages on residential one- to four-
family properties.
In consideration of the mutual agreements herein contained, the
Company, the Master Servicer and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article. Unless otherwise specified, all
calculations described herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
ACCOUNTS: Collectively, the Certificate Account, the
Distribution Account, the Pre- Funding Account and the Capitalized Interest
Account.
ACCRUED CERTIFICATE INTEREST: With respect to each
Distribution Date, as to any Class A Certificate, Class M Certificate or Class
CE Certificate, interest accrued during the related Interest Accrual Period at
the Pass-Through Rate for such Certificate on the Certificate Principal Balance,
in the case of the Class A Certificates and the Class M Certificates, or on the
Notional Amount, in the case of the Class CE Certificates, of such Certificate
immediately prior to such Distribution Date. The Class P Certificates are not
entitled to distributions in respect of interest and, accordingly, will not
accrue interest. All distributions of interest on the Class A Certificates and
the Class M Certificates will be calculated on the basis of a 360-day year and
the actual number of days in the applicable Interest Accrual Period. Accrued
Certificate Interest with respect to each Distribution Date, as to any Class A
Certificate, Class M Certificate or Class CE Certificate will be reduced by an
amount equal to the portion allocable to such Certificate pursuant to Section
1.02 hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if
any, for such Distribution Date to the extent not covered by Compensating
Interest payments pursuant to Section 4.10 and (b) the aggregate amount of any
shortfalls resulting from application of the Relief Act, if any, for such
Distribution Date. In addition, Accrued Certificate Interest with respect to
each Distribution Date, as to any Class CE Certificate, shall be reduced to an
amount equal to the portion allocable to such Class CE Certificate of Realized
Losses, if any, pursuant to Section 4.05 hereof.
ADDITION NOTICE: With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.09, a notice of the
Company's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be substantially in the
form of Exhibit K.
ADJUSTABLE RATE MORTGAGE LOAN: Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.
ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan,
each date set forth in the related Mortgage Note on which an adjustment to the
interest rate on such Mortgage Loan becomes effective.
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AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AGREEMENT: This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
APPRAISED VALUE: As to any Mortgaged Property, the lower of
(i) the appraised value of such Mortgaged Property based upon the appraisal made
at the time of the origination of the related Mortgage Loan, taken together with
a review appraisal performed prior to origination and (ii) the purchase price of
the Mortgaged Property at the time of origination.
ASSIGNMENT: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county.
AVAILABLE DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of the Interest Remittance Amount and the Principal
Remittance Amount for that Distribution Date.
BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.
BOOK-ENTRY CERTIFICATE: Any Certificate registered in the name
of the Depository or its nominee. Initially the Book-Entry Certificates shall be
the Class A Certificates and the Class M Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York, the State of
California or the State of Illinois (and such other state or states in which the
Certificate Account, the Distribution Account, the Pre-Funding Account and the
Capitalized Interest Account are at the time located) are required or authorized
by law or executive order to be closed.
CAPITALIZED INTEREST ACCOUNT: The Eligible Account established
and maintained by the Trustee pursuant to Section 4.12 hereunder.
CAPITALIZED INTEREST AMOUNT: The amount deposited by the
Company in the Capitalized Interest Account on the Closing Date, which amount is
$156,178.36.
CASH LIQUIDATION: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the
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Master Servicer reasonably and in good faith expects to be finally recoverable
with respect to such Mortgage Loan.
CERTIFICATE: Any Class A Certificate, Class M Certificate,
Class CE Certificate, Class P Certificate or Class R Certificate.
CERTIFICATE ACCOUNT: The custodial account or accounts created
and maintained pursuant to Section 3.06 in the name of a depository institution,
as custodian for the Holders of the Certificates, into which the amounts set
forth in Section 3.06 shall be deposited directly. Any such account or accounts
shall be an Eligible Account.
CERTIFICATEHOLDER OR HOLDER: The Person in whose name a
Certificate is registered in the Certificate Register, except that no
Disqualified Organization, Non-United States Person or "electing large
partnership" within the meaning of Section 775(a) of the Code shall be a holder
of a Class R Certificate and, solely for the purpose of giving any consent or
direction pursuant to this Agreement (other than any consent required pursuant
to Section 11.01), any Certificate registered in the name of the Company, the
Master Servicer, any Subservicer or any Affiliate of the foregoing, shall be
deemed not to be outstanding and the Percentage Interest or Voting Rights
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests or Voting Rights necessary to effect
any such consent or direction has been obtained. All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein; PROVIDED,
HOWEVER, that the Trustee shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
CERTIFICATE MARGIN: With respect to each Class of Offered
Certificates, as follows:
CLASS CERTIFICATE MARGIN
----- ------------------
Class A 0.45%(1) 0.90%(2)
Class M-1 0.90%(1) 1.35%(2)
Class M-2 1.50%(1) 2.25%(2)
Class M-3 3.50%(1) 5.25%(2)
---------------
(1) For Interest Accrual Periods beginning on or prior to the Optional
Termination Date.
(2) For Interest Accrual Periods beginning after the Optional Termination Date.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
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CERTIFICATE PRINCIPAL BALANCE: With respect to each Class A
Certificate, Class M Certificate or Class P Certificate, on any date of
determination, an amount equal to (i) the initial Certificate Principal Balance
of such Certificate, minus (ii) the sum of (x) the aggregate of all amounts
previously distributed with respect to such Certificate (or any predecessor
Certificate) and applied to reduce the Certificate Principal Balance thereof
pursuant to Section 4.02(b)(3)(i) or 4.02(b)(3)(ii) and (y) the aggregate of all
reductions in Certificate Principal Balance deemed to have occurred in
connection with Realized Losses which were previously allocated to such
Certificate (or any predecessor Certificate) pursuant to Section 4.05, if
applicable. With respect to each Class CE Certificate, on any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Principal Balances of the Uncertificated REMIC II Regular Interests over (B) the
then aggregate Certificate Principal Balances of the Class A Certificates, the
Class M Certificates and the Class P Certificates then outstanding.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register
maintained and the registrar appointed pursuant to Section 5.02.
CLASS: Collectively, all of the Certificates bearing the same
designation.
CLASS A CERTIFICATE: Any one of the Class A Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-1 and evidencing an
interest designated as a "regular interest" in REMIC III within the meaning of
the REMIC Provisions.
CLASS CE CERTIFICATE: Any one of the Class CE Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-3 and evidencing an
interest designated as a "regular interest" in REMIC III within the meaning of
the REMIC Provisions.
CLASS M CERTIFICATE: Any one of the Class M-1 Certificates,
Class M-2 Certificates or Class M-3 Certificates.
CLASS M-1 CERTIFICATE: Any one of the Class M-1 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-2 and evidencing an
interest designated as a "regular interest" in REMIC III within the meaning of
the REMIC Provisions.
CLASS M-2 CERTIFICATE: Any one of the Class M-2 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-2 and evidencing an
interest designated as a "regular interest" in REMIC III within the meaning of
the REMIC Provisions.
CLASS M-3 CERTIFICATE: Any one of the Class M-3 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-2
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and evidencing an interest designated as a "regular interest" in REMIC III
within the meaning of the REMIC Provisions.
CLASS P CERTIFICATE: Any one of the Class P Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-4 and evidencing an
interest designated as a "regular interest" in REMIC III within the meaning of
the REMIC Provisions.
CLASS R CERTIFICATE: Any one of the Class R-I Certificates,
Class R-II Certificates or Class R-III Certificates.
CLASS R-I CERTIFICATE: Any one of the Class R-I Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B and evidencing an interest
designated as a "residual interest" in REMIC I within the meaning of the REMIC
Provisions.
CLASS R-II CERTIFICATE: Any one of the Class R-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B and evidencing an interest
designated as a "residual interest" in REMIC II within the meaning of the REMIC
Provisions.
CLASS R-III CERTIFICATE: Any one of the Class R-III
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B and evidencing
an interest designated as a "residual interest" in REMIC III within the meaning
of the REMIC Provisions.
CLOSING DATE: September 30, 1999.
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST: With respect to any Mortgage Loan for
which a Principal Prepayment in Full has been received by the Master Servicer
during a Due Period, an amount equal to the lesser of (a) the difference between
(x) 30 days' interest at the Net Mortgage Rate (or at such lower rate as may be
in effect for such Mortgage Loan because of application of the Relief Act, or as
a result of any Debt Service Reduction) on the Stated Principal Balance of such
Mortgage Loan as of the first day of the related Due Period and (y) to the
extent not previously advanced, the interest paid by the related Mortgagor with
respect to the Mortgage Loan during such Due Period, and (b) the aggregate
Servicing Fee received by the Master Servicer with respect to such Due Period.
CORPORATE TRUST OFFICE: The principal office of the Trustee at
which at any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this instrument is located at 1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: WMC Mortgage Corp. Series 1999-A.
8
CORRESPONDING CERTIFICATE: With respect to Uncertificated
REMIC I Regular Interest I-LT2, Uncertificated REMIC I Regular Interest I-LT3,
Uncertificated REMIC I Regular Interest I- LT4, Uncertificated REMIC I Regular
Interest I-LT5 and Uncertificated REMIC I Regular Interest I-LTP, the Class A
Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the Class
M-3 Certificates and the Class P Certificates, respectively. With respect to
Uncertificated REMIC II Regular Interest II-LT2, Uncertificated REMIC II Regular
Interest II-LT3, Uncertificated REMIC II Regular Interest II-LT4, Uncertificated
REMIC II Regular Interest II-LT5 and Uncertificated REMIC II Regular Interest
II-LTP, the Class A Certificates, the Class M-1 Certificates, the Class M- 2
Certificates, the Class M-3 Certificates and the Class P Certificates,
respectively.
CPR: The Constant Prepayment Rate, which represents an assumed
constant rate of prepayment each month, expressed as a per annum percentage
principal balance of the pool of Mortgage Loans for that month.
CREDIT ENHANCEMENT PERCENTAGE: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Class M Certificates and the
Class CE Certificates, and the denominator of which is the sum of the aggregate
Stated Principal Balance of the Mortgage Loans, calculated after taking into
account distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date.
CUMULATIVE LOSS PERCENTAGE: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the sum of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date and the Original Pre-Funded Amount.
CUMULATIVE LOSS TEST: The Cumulative Loss Test will be met
with respect to a Distribution Date as follows: (i) for the 37th through the
48th Distribution Dates, if the Cumulative Loss Percentage for such Distribution
Date is greater than 3.7%; (ii) for the 49th through the 60th Distribution
Dates, if the Cumulative Loss Percentage for such Distribution Date is greater
than 4.7%; (iii) for the 61st through the 72nd Distribution Dates, if the
Cumulative Loss Percentage for such Distribution Date is greater than 5.3%; (iv)
for the 73rd through the 84th Distribution Dates, if the Cumulative Loss
Percentage for such Distribution Date is greater than 5.7%; and (v) for the 85th
Distribution Date or any Distribution Date thereafter, if the Cumulative Loss
Percentage for such Distribution Date is greater than 6.0%.
CUMULATIVE NET LOSSES: As of any date of determination, the
aggregate of the Liquidated Loan Losses incurred from the Cut-off Date through
the end of the calendar month preceding such date of determination.
CURTAILMENT: Any Principal Prepayment made by a Mortgagor
which is not a Principal Prepayment in Full.
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CUSTODIAL AGREEMENT: An agreement that may be entered into
among the Company, the Master Servicer, the Trustee and a Custodian providing
for the retention of the Mortgage Files by such Custodian on behalf of the
Trustee.
CUSTODIAN: A custodian appointed pursuant to a Custodial
Agreement.
CUT-OFF DATE: With respect to (i) each Initial Mortgage Loan,
the Initial Cut-off Date, (ii) each Subsequent Mortgage Loan, the related
Subsequent Cut-off Date and (iii) any Qualified Substitute Mortgage Loan, the
Replacement Cut-off Date.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
original principal balance thereof minus the principal portion of all payments
due on such Mortgage Loan on or before the related Cut-off Date and minus all
other payments applied to reduce such original principal amount on or before
such Cut-off Date.
DCR: Duff & ▇▇▇▇▇▇ Credit Rating Co., or its successor in
interest.
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 constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
DEFINITIVE CERTIFICATE: Any definitive, fully registered
Certificate.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or designated
to be replaced with a Qualified Substitute Mortgage Loan.
DELINQUENCY PERCENTAGE: The percentage obtained by dividing
(x) the average of the aggregate Stated Principal Balances of the Mortgage Loans
that are 60 or more days delinquent (whether or not in foreclosure) in payment
of principal and interest as of the last day of the 3 preceding calendar months
(including REO Mortgage Loans), by (y) the average of the Pool Principal
Balances as of the last day of the 3 preceding calendar months.
DELINQUENCY TEST: The Delinquency Test will be met with
respect to any Distribution Date if the Delinquency Percentage for such
Distribution Date is greater than 12.0%.
DELINQUENT: A Mortgage Loan is "Delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled. A Mortgage Loan is "30 days Delinquent" if such payment has not been
received by the close of business on the corresponding day
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of the month immediately succeeding the month in which such payment was due.
Similarly for "60 days Delinquent," "90 days or more Delinquent" and so on.
DEPOSITORY: The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering Book-Entry Certificates is Cede & Co. 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 and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended.
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: The second Business Day prior to the
related Distribution Date.
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 REMIC I 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.
DISQUALIFIED ORGANIZATION: Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the FHLMC, a majority
of its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Class R Certificate by
such Person may cause REMIC I, REMIC II or REMIC III or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of a Class R Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
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DISTRIBUTION ACCOUNT: The separate account or accounts created
and maintained pursuant to Section 4.01, which shall be entitled "Bank One,
National Association, as trustee, in trust for the registered holders of WMC
Secured Assets Corp., Mortgage Pass-Through Certificates, Series 1999-A" which
account shall be held for the benefit of the Certificateholders and which must
be an Eligible Account.
DISTRIBUTION DATE: The 15th day of any month, beginning in
November 1999, or, if such 15th day is not a Business Day, the Business Day
immediately following such 15th day.
DUE DATE: With respect to any Mortgage Loan, the day of the
month the Monthly Payment is due as set forth in the related Mortgage Note and
which date is during the Due Period related to such Distribution Date.
DUE PERIOD: With respect to any Distribution Date, the period
commencing on and including the second day of the month preceding the month of
such Distribution Date to and including the first day of the month of such
Distribution Date.
ELIGIBLE ACCOUNT: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Eligible 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,
or (iii) a trust account or accounts maintained in the corporate trust
department of the Trustee, or (iv) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account as the Certificate Account or the
Distribution Account will 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).
ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith
and credit of the United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by each
Rating Agency in its highest short-term rating available;
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(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency in its highest short-term rating
available;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated
by each Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to
each Rating Agency as an Eligible Investment hereunder and will 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, as evidenced in writing;
PROVIDED, HOWEVER, that no instrument shall be an Eligible Investment if it
represents either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: As defined in Section 7.01.
EXPENSE ADJUSTED MORTGAGE RATE: With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the sum of
(i) the per annum rate at which the Servicing Fee is calculated and (ii) the
Trustee Fee Rate.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution
Date, the lesser of (a) the Overcollateralization Deficiency Amount as of such
Distribution Date (after taking into account the payment of the Principal
Distribution Amount on such Distribution Date, exclusive of the payment of any
Extra Principal Distribution Amount) and (b) the amount of Accrued Certificate
Interest payable on the Class CE Certificates on such Distribution Date as
reduced by Realized Losses allocated thereto with respect to such Distribution
Date pursuant to Section 4.05.
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FASIT: A "financial asset securitization investment trust"
within the meaning of Section 860L of the Code.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
FHLMC: ▇▇▇▇▇▇▇ Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act of
1970, as amended, or any successor thereto.
FINAL CERTIFICATION: As defined in Section 2.02.
FINAL DISTRIBUTION DATE: The Distribution Date on which the
final distribution in respect of the Certificates will be made pursuant to
Section 9.01, which Final Distribution Date shall in no event be later than the
end of the 90-day liquidation period described in Section 9.03.
FIXED RATE MORTGAGE LOAN: Each of the Mortgage Loans as having
a Mortgage Rate that is not subject to adjustment other than in the event of a
default thereunder.
FNMA: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FORECLOSURE PROFITS: As to any Distribution Date or related
Determination Date, the excess, if any, of Liquidation Proceeds, Insurance
Proceeds and REO Proceeds (net of all amounts reimbursable therefrom pursuant to
Section 3.07)) in respect of each Mortgage Loan or REO Property for which a Cash
Liquidation or REO Disposition occurred in the related Due Period over the sum
of the unpaid principal balance of such Mortgage Loan or REO Property
(determined, in the case of an REO Disposition, in accordance with Section 3.13)
plus accrued and unpaid interest at the Mortgage Rate on such unpaid principal
balance from the Due Date to which interest was last paid by the related
Mortgagor to the first day of the month following the month in which such Cash
Liquidation or REO Disposition occurred.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note to be
added to the Index to determine the Mortgage Rate on each Adjustment Date, and
which is set forth in the Mortgage Loan Schedule.
INDEPENDENT: When used with respect to any specified Person,
means such a Person who (i) is in fact independent of the Company, the Master
Servicer, the Seller and the Trustee, or any Affiliate thereof, (ii) does not
have any direct financial interest or any material indirect financial interest
in the Company, the Master Servicer, the Seller or the Trustee or in an
Affiliate thereof, and (iii) is not connected with the Company, the Master
Servicer, the Seller or the Trustee as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
INDEPENDENT CONTRACTOR: Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to REMIC
I within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests
14
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 REMIC I does not receive or derive any income from such Person and
provided that the relationship between such Person and REMIC I 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 not be at the
expense of the Trust Fund or the Trustee, 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.
INDEX: With respect to any Adjustable Rate Mortgage Loan, the
average of the interbank offered rates for six-month United States dollar
deposits in the London market as published in THE WALL STREET JOURNAL and as
most recently available either (i) as of the first business day 45 days prior to
such Adjustment Date or (ii) as of the first business day of the month preceding
the month of such Adjustment Date, as specified in the related Mortgage Note.
INDIRECT DEPOSITORY PARTICIPANT: An institution that is not a
Depository Participant but clears through or maintains a custodial relationship
with Depository Participants and has access to the Depository's clearing system.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to each
Class of Certificates (other than the Class R Certificates), the Certificate
Principal Balance of such Class of Certificates as of the Closing Date as set
forth in the Preliminary Statement hereto.
INITIAL CERTIFICATION: As defined in Section 2.02.
INITIAL CUT-OFF DATE: October 1, 1999.
INITIAL MORTGAGE LOAN: A Mortgage Loan assigned and
transferred to the Trust Fund by the Company on the Closing Date, as listed on
the Initial Mortgage Loan Schedule.
INITIAL MORTGAGE LOAN SCHEDULE: The schedule of Initial
Mortgage Loans attached hereto as Exhibit C-1.
INSURANCE PROCEEDS: Proceeds paid in respect of a Mortgage
Loan pursuant to any related insurance policy covering such Mortgage Loan, to
the extent such proceeds are payable to the mortgagee under the related
Mortgage, any Subservicer, the Master Servicer or the Trustee and are not
applied to the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account.
15
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date
and the Class A Certificates, the Class M Certificates, Uncertificated REMIC II
Regular Interest II-LT2, Uncertificated REMIC II Regular Interest II-LT3,
Uncertificated REMIC II Regular Interest II-LT4, Uncertificated REMIC II Regular
Interest II-LT5, Uncertificated REMIC II Regular Interest II-LT2S,
Uncertificated REMIC II Regular Interest II-LT3S, Uncertificated REMIC II
Regular Interest II- LT4S and Uncertificated REMIC II Regular Interest II-LT5S,
the period commencing on the Distribution Date in the month immediately
preceding the month in which such Distribution Date occurs (or, in the case of
the first Distribution Date, commencing on the Closing Date) and ending on the
day preceding such Distribution Date. With respect to any Distribution Date and
Uncertificated REMIC II Regular Interest II-LT1, Uncertificated REMIC II Regular
Interest II-LT6 and the Uncertificated REMIC I Regular Interests, the one-month
period ending on the last day of the calendar month preceding the month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
commencing on the Closing Date and ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs).
INTEREST REMITTANCE AMOUNT: With respect to any Determination
Date, the sum, without duplication, of the following:
(i) the interest portion of each Monthly Payment
received during the related Due Period (other than Monthly
Payments due after the related Due Period, which shall be
treated as if received during the Due Period in which they are
due) on each Outstanding Mortgage Loan (less the related
Servicing Fees and the Trustee Fee);
(ii) Monthly Advances and Compensating Interest paid
by the Master Servicer with respect to such Due Period;
(iii) the interest portion of all other unscheduled
collections (including, without limitation, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received
during the related Due Period to the extent applied by the
Master Servicer as recoveries of interest on any Mortgage Loan
at the related Net Mortgage Rate; and
(iv) the interest portion of any Substitution
Adjustment Amount or Repurchase Price received with respect to
the related Due Period.
With respect to the first Distribution Date, the Interest
Remittance Amount will also include the amount to pay interest withdrawn by the
Trustee from the Capitalized Interest Account
pursuant to Section 4.12 hereof.
LATE COLLECTIONS: With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
LATEST POSSIBLE MATURITY DATE: October 15, 2029.
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LIBOR: With respect to any Distribution Date, will equal the
interbank offered rate for one-month United States dollar deposits in the London
market as quoted on Telerate Page 3750 as of 11:00 A.M., London time, on the
second LIBOR Business Day prior to the first day of the related Interest Accrual
Period or, in the case of the first Distribution Date, the second LIBOR Business
Day prior to the Closing Date. "TELERATE PAGE 3750" means the display designated
as page 3750 on the Telerate Service (or such other page as may replace page
3750 on that service for the purpose of displaying London interbank offered
rates of major banks). If such rate does not appear on such page (or such other
page as may replace that page on that service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "REFERENCE BANK RATE" will be determined on
the basis of the rates at which deposits in U.S. dollars are offered by the
reference banks (which shall be three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 A.M., London time, on the day
that is two LIBOR Business Days prior to the immediately preceding Interest
Accrual Period to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates. The Trustee will request the principal
London office of each of the reference banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate will be the arithmetic
mean of the quotations. If on such date fewer than two quotations are provided,
the rate will be the arithmetic mean of the rates quoted by one or more major
banks in New York City, selected by the Trustee after consultation with the
Master Servicer, as of 11:00 A.M., New York City time, on such date for loans in
U.S. dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the
Offered Certificates. If no such quotations can be obtained, the rate will be
equal to LIBOR for the prior Distribution Date; provided that if LIBOR for an
Interest Accrual Period would be based on LIBOR for the previous Interest
Accrual Period for three consecutive Interest Accrual Periods, then the Trustee
shall select a comparable alternative index (over which the Trustee has no
control) used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent third
party.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a
Sunday, or (ii) a day on which banking institutions in the State of New York or
in the City of London, England are required or authorized by law to be closed.
LIBOR CERTIFICATE RATE: With respect to any Class of Offered
Certificates, for any Distribution Date, LIBOR plus the related Certificate
Margin.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution
Date, any Mortgage Loan in respect of which the Master Servicer has determined,
in accordance with the servicing procedures specified in this Agreement, as of
the end of the related Due Period, that substantially all Liquidation Proceeds
which it reasonably expects to recover with respect to the disposition of the
related Mortgaged Property or REO Property have been recovered.
LIQUIDATION EXPENSES: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage
17
Loan and not recovered under any insurance policy, such expenses including,
without limitation, legal fees and expenses, any unreimbursed amount expended
respecting the related Mortgage Loan and any related and unreimbursed
expenditures for real estate property taxes or for property restoration,
preservation or insurance against casualty loss or damage.
LIQUIDATED LOAN LOSSES: For each Liquidated Mortgage Loan, the
amount, if any, by which the sum of the Stated Principal Balance thereof plus
accrued and unpaid interest thereon plus unreimbursed Servicing Advances is in
excess of the Net Liquidation Proceeds realized thereon.
LIQUIDATION PROCEEDS: Proceeds (including Insurance Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO
Property, whether through trustee's sale, foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO: As of any date, the fraction, expressed
as a percentage, the numerator of which is the original principal balance of the
related Mortgage Loan as of the date of the origination of such Mortgage Loan
and the denominator of which is the Appraised Value of the related Mortgaged
Property.
MASTER SERVICER PREPAYMENT CHARGE PAYMENT AMOUNT: The amounts
payable by the Master Servicer in respect of any waived Prepayment Charges
pursuant to Section 2.03 or Section 3.01(e).
MAXIMUM I-LT6 UNCERTIFICATED INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to Uncertificated REMIC I
Regular Interest I-LT6 for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of Uncertificated REMIC I Regular Interest
I-LT6 minus the REMIC I Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Interest on Uncertificated REMIC II
Regular Interest II-LT2, Uncertificated REMIC II Regular Interest II-LT3,
Uncertificated REMIC II Regular Interest II-LT4 and Uncertificated REMIC II
Regular Interest II-LT5 for such Distribution Date.
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the maximum Mortgage Rate permitted over the life of such
Mortgage Loan under the related Mortgage Note.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the minimum Mortgage Rate permitted over the life of such
Mortgage Loan under the related Mortgage Note.
MONTHLY ADVANCE: With respect to any Determination Date, an
advance of delinquent interest made by the Master Servicer pursuant to Section
4.09.
MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for Curtailments and
18
for Deficient Valuations occurring prior to such Due Date but before any
adjustment to such amortization schedule by reason of any bankruptcy, other than
a Deficient Valuation, or similar proceeding or any moratorium or similar waiver
or grace period).
▇▇▇▇▇'▇: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in
interest.
MORTGAGE: With respect to each Mortgage Note related to a
Mortgage Loan, the mortgage, deed of trust or other comparable instrument
creating a first lien on an estate in fee simple interest in real 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 PURCHASE AGREEMENT: The mortgage loan purchase
agreement, dated as of September 28, 1999, by and between the Company as
purchaser and the Seller as seller.
MORTGAGE LOANS: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 hereof and each Subsequent
Transfer Agreement, together with any Qualified Substitute Mortgage Loans, as
from time to time are held as a part of the Trust Fund, the Mortgage Loans
originally so held being identified in the Initial Mortgage Loan Schedule, and
including each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto.
MORTGAGE LOAN SCHEDULE: As of any date, the schedule(s) of
Mortgage Loans included in the Trust Fund as of such date, including the Initial
Mortgage Loan Schedule, any Subsequent Mortgage Loan Schedule and any amended
Mortgage Loan Schedule with respect to the addition of Qualified Substitute
Mortgage Loans, if any. The Mortgage Loan Schedule shall set forth at a minimum
the following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the street address of the Mortgaged Property including state and zip code;
(iii) the maturity date of the Mortgage Note;
(iv) the Mortgage Rate as of the related Cut-off Date;
(v) the original principal balance;
(vi) the date the first Monthly Payment thereon is due;
(vii) the scheduled monthly payment of principal and
interest as of the related Cut-off Date;
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(viii) the Cut-off Date Principal Balance;
(ix) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Rate;
(x) with respect to each Adjustable Rate Mortgage Loan,
the Minimum Mortgage
Rate;
(xi) with respect to each Adjustable Rate Mortgage Loan,
the Index and Gross Margin;
(xii) the Appraised Value of the related Mortgaged Property;
(xiii) the original term to maturity;
(xiv) the remaining number of months to maturity;
(xv) the property type and occupancy status;
(xvi) with respect to each Adjustable Rate Mortgage Loan,
the next Adjustment Date after the related Cut-off
Date;
(xvi) the type and term of the related Prepayment Charge.
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
MORTGAGE NOTE: The originally executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan, together with any modifications thereto.
MORTGAGE RATE: As to any Mortgage Loan, the interest rate
borne by the related Mortgage Note calculated on the basis of a 360-day year and
twelve 30-day months elapsed in the related period for which interest thereon
accrues.
MORTGAGED PROPERTY: The underlying real property securing a
Mortgage Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
NET MONTHLY EXCESS CASH FLOW: For any Distribution Date, the
sum of (i) the Overcollateralization Reduction Amount and (ii) the excess of (x)
the Available Distribution Amount for such Distribution Date over (y) the sum
for such Distribution Date of (A) the aggregate
20
Accrued Certificate Interest payable to the holders of the Class A Certificates
and the Class M Certificates and (B) the amounts described in the definition of
Principal Remittance Amount (except
clause (v) of such definition).
NET MORTGAGE RATE: As to each Mortgage Loan, a per annum rate
of interest equal to the Mortgage Rate less the per annum rate at which the
Servicing Fee is calculated.
NET WAC PASS-THROUGH RATE: With respect to Uncertificated
REMIC II Regular Interest II-LT2, Uncertificated REMIC II Regular Interest
II-LT3, Uncertificated REMIC II Regular Interest II-LT4, Uncertificated REMIC II
Regular Interest II-LT5, the Class A Certificates and the Class M Certificates
and any Distribution Date, a per annum rate equal to the fraction, expressed as
a percentage, the numerator of which is (i) an amount equal to 1/12 of the
aggregate Stated Principal Balance of the then outstanding Mortgage Loans and
REO Properties multiplied by the weighted average of the Expense Adjusted
Mortgage Rates on such Mortgage Loans and REO Properties, and the denominator of
which is (ii) an amount equal to (A) the sum of the aggregate Stated Principal
Balance of the then outstanding Mortgage Loans and REO Properties multiplied by
(B) the actual number of days elapsed in the related Interest Accrual Period
divided by 360.
NEW LEASE: Any lease of REO Property entered into on behalf of
the Trust Fund, including any lease renewed or extended on behalf of the Trust
Fund if the Trust Fund has the right to renegotiate the terms of such lease.
NONRECOVERABLE ADVANCES: With respect to any Mortgage Loan,
(i) any Servicing Advance or Monthly Advance previously made and not reimbursed
pursuant to Section 3.07(a)(iv), or (ii) a Servicing Advance or Monthly Advance
proposed to be made in respect of a Mortgage Loan or REO Property which, in the
good faith business judgment of the Master Servicer would not be ultimately
recoverable from Late Collections, Insurance Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property.
NON-UNITED STATES PERSON: Any Person other than a United
States Person.
NOTIONAL AMOUNT: With respect to the Class CE Certificates and
any Distribution Date, the Uncertificated Principal Balance of the
Uncertificated REMIC II Regular Interests (other than the Uncertificated
Principal Balance of Uncertificated REMIC II Regular Interest II-LTP) for such
Distribution Date.
OFFERED CERTIFICATES: Together, the Class A Certificates and
the Class M Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of
the Board, the President, a Vice President or Assistant Vice President, a
Managing Director or Director, the Treasurer, the Secretary, or one of the
Assistant Treasurers or Assistant Secretaries of the Company or the Master
Servicer, as the case may be, and delivered to the Trustee, as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel acceptable to
the Trustee and the Master Servicer, who may be in-house counsel for the Company
or the Master Servicer, provided
21
that any opinion of counsel (i) referred to in the definition of "Permitted
Transferee", (ii) relating to the qualification of the Trust Fund as a REMIC or
compliance with the REMIC Provisions or (iii) pursuant to Section 6.04 must,
unless otherwise specified, be an opinion of Independent counsel.
OPTIONAL TERMINATION DATE: As defined in Section 9.01 hereof.
ORIGINAL PRE-FUNDED AMOUNT: The amount remitted to the Trustee
by the Company for deposit in the Pre-Funding Account on the Closing Date, which
amount is $20,011,321.81.
OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.04
or 3.18.
OVERCOLLATERALIZATION AMOUNT: As of any Distribution Date, the
excess, if any, of (a) the sum of the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
and the amount on deposit in the Pre-Funding Account, if any, over (b) the
aggregate Certificate Principal Balances of the Class A Certificates, the Class
M Certificates and the Class P Certificates as of such date (after taking into
account the payment to the Offered Certificates of the Principal Remittance
Amount).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralization
Amount applicable to such Distribution Date over (b) the Overcollateralization
Amount applicable to such Distribution Date prior to taking into account the
payment of any Excess Principal Distribution Amount on such Distribution Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: As of any Distribution
Date, an amount equal to the lesser of (i) the excess, if any, of (a) the
Overcollateralization Amount for such Distribution Date, over (b) the Required
Overcollateralization Amount for such Distribution Date and (ii) the amount
available for distribution specified in the definition of Principal Remittance
Amount (except clause (v) of such definition).
OVERCOLLATERALIZATION REDUCTION LOCKOUT EVENT: An
Overcollateralization Reduction Lockout Event has occurred with respect to any
Distribution Date on or after November 2002 if both the Cumulative Loss Test and
the Delinquency Test are met.
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: With respect to the Class A Certificates
and the Class M Certificates and any Distribution Date other than the first
Distribution Date, a rate per annum equal to the lesser of (i) the related LIBOR
Certificate Rate and (2) the Net WAC Pass-Through Rate. With respect to the
Class A Certificates and the Class M Certificates and the first Distribution
Date, a rate per annum equal to the related LIBOR Certificate Rate. With respect
to the Class CE
22
Certificates and any Distribution Date, a rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (i) through (vii) below, and the denominator of
which is the sum of the aggregate of the Uncertificated Principal Balances of
the Uncertificated REMIC II Regular Interests (other than the Uncertificated
Principal Balance of Uncertificated REMIC II Regular Interest II-LTP). For
purposes of calculating the Pass- Through Rate for the Class CE Certificates,
the numerator is equal to the sum of the following components:
(i) the Uncertificated REMIC II Pass-Through Rate for
Uncertificated REMIC II Regular Interest II-LT1 minus two (2) times the
weighted average of the Uncertificated REMIC II Pass-Through Rates for
Uncertificated REMIC II Regular Interest II-LT2, Uncertificated REMIC
II Regular Interest II-LT3, Uncertificated REMIC II Regular Interest
II-LT4, Uncertificated REMIC II Regular Interest II-LT5 and
Uncertificated REMIC II Regular Interest II-LT6, with the rate on
Uncertificated REMIC II Regular Interest II-LT6 equal to zero for the
purpose of this calculation, applied to an amount equal to the
Uncertificated Principal Balance of Uncertificated REMIC II Regular
Interest II-LT1;
(ii) the weighted average of the Uncertificated REMIC II
Pass-Through Rates for Uncertificated REMIC II Regular Interest II-LT2,
Uncertificated REMIC II Regular Interest II-LT3, Uncertificated REMIC
II Regular Interest II-LT4 and Uncertificated REMIC II Regular Interest
II-LT5 minus two (2) times the weighted average of the Uncertificated
REMIC II Pass-Through Rates for Uncertificated REMIC II Regular
Interest II-LT2, Uncertificated REMIC II Regular Interest II-LT3,
Uncertificated REMIC II Regular Interest II-LT4, Uncertificated REMIC
II Regular Interest II-LT5 and Uncertificated REMIC II Regular Interest
II-LT6, with the rate on Uncertificated REMIC II Regular Interest
II-LT6 equal to zero for the purpose of this calculation, applied to an
amount equal to the sum of the Uncertificated Principal Balances of
Uncertificated REMIC II Regular Interest II-LT2, Uncertificated REMIC
II Regular Interest II-LT3, Uncertificated REMIC II Regular Interest
II-LT4 and Uncertificated REMIC II Regular Interest II-LT5;
(iii) the Uncertificated REMIC II Pass-Through Rate for
Uncertificated REMIC II Regular Interest II-LT6 minus two (2) times the
weighted average of the Uncertificated REMIC II Pass-Through Rates for
Uncertificated REMIC II Regular Interest II-LT2, Uncertificated REMIC
II Regular Interest II-LT3, Uncertificated REMIC II Regular Interest
II-LT4, Uncertificated REMIC II Regular Interest II-LT5 and
Uncertificated REMIC II Regular Interest II-LT6, with the rate on
Uncertificated REMIC II Regular Interest II-LT6 equal to zero for the
purpose of this calculation, applied to an amount equal to the
Uncertificated Principal Balance of Uncertificated REMIC II Regular
Interest II-LT6;
(iv) 100% of the interest on Uncertificated REMIC II Regular
Interest II-LT2S;
(v) 100% of the interest on Uncertificated REMIC II
Regular Interest II-LT3S;
(vi) 100% of the interest on Uncertificated REMIC II
Regular Interest II-LT4S; and
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(vii) 100% of the interest on Uncertificated REMIC II Regular
Interest II-LT5S.
PAYING AGENT: Bank One, National Association or any successor
Paying Agent appointed by the Trustee.
PERCENTAGE INTEREST: With respect to any Class of Certificates
(other than the Class R Certificates), the undivided percentage ownership
interest in the related Class evidenced by such Certificate, which percentage
ownership interest shall be equal to the Initial Certificate Principal Balance
thereof divided by the aggregate Initial Certificate Principal Balance of all of
the Certificates of the same Class. The Class A Certificates and the Class M
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $10,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances of
$20 and integral multiples thereof. The Class CE Certificates are issuable only
in minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. With respect to any
Class R Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 0.01% in excess thereof.
PERIODIC RATE CAP: With respect to any Adjustable Rate
Mortgage Loan, the maximum rate, if any, by which the Mortgage Rate on such
Mortgage Loan can adjust on any Adjustment Date, as stated in the related
Mortgage Note or Mortgage.
PERMITTED TRANSFEREE: Any Transferee of a Class R Certificate,
other than a Disqualified Organization, any "electing large partnership" within
the meaning of Section 775(a) of the Code, or Non-United States Person.
PERSON: Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: Any employee benefit plan within the meaning of section
3(3) of ERISA ---- or a plan within the meaning of section 4975(e)(1) of the
Code.
POOL PRINCIPAL BALANCE: As to any date of determination, the
aggregate of the Stated Principal Balances of each Mortgage Loan that was an
Outstanding Mortgage Loan on such date of determination.
PRE-FUNDING ACCOUNT: The Pre-Funding Account established
pursuant to Section 4.11 of this Agreement. The Pre-Funding Account shall be an
Eligible Account.
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PRE-FUNDING PERIOD: The period commencing on the Closing Date
and ending on the earliest to occur of (i) the date on which the amount on
deposit in the Pre-Funding Account (exclusive of any investment earnings) is
less than $50,000, (ii) the date on which an Event of Default occurs under this
Agreement and (iii) October 29, 1999.
PRE-FUNDED AMOUNT: With respect to any Distribution Date, the
amount remaining on deposit in the Pre-Funding Account (exclusive of any
investment earnings).
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note (other than any Master
Servicer Prepayment Charge Payment Amount).
PREPAYMENT CHARGE SCHEDULE: As of any date, the list of
Prepayment Charges on the Mortgage Loans included in REMIC I on such date,
attached hereto as Schedule C-2 (including the Prepayment Charge Summary
attached thereto) as supplemented by each schedule of Subsequent Mortgage Loans
which by their terms have related Prepayment Charges. The Prepayment Charge
Schedule shall set forth the following information with respect to each
Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Mortgage Loan; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date (or Subsequent Cut-off Date, with respect
to a Subsequent Mortgage Loan).
The Prepayment Charge Schedule shall be amended from time to
time by the Company in accordance with the provisions of this Agreement.
PREPAYMENT INTEREST SHORTFALL: With respect to any Mortgage
Loan for which a Principal Prepayment in has been received by the Master
Servicer during a Due Period, an amount equal to the difference between (x) 30
days' interest at the Net Mortgage Rate (or at such lower rate as may be in
effect for such Mortgage Loan because of application of the Relief Act, or as a
result of any Debt Service Reduction) on the Stated Principal Balance of such
Mortgage Loan as of the first day of the related Due Period and (y) to the
extent not previously advanced, the interest paid by the related Mortgagor with
respect to the Mortgage Loan during such Due Period.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of (i) the Principal Remittance Amount for such
Distribution Date and (ii) the Extra Principal Distribution
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Amount for such Distribution Date MINUS (iii) on any Distribution Date occurring
on or after the Stepdown Date, the Overcollateralization Reduction Amount for
such Distribution Date, if any.
PRINCIPAL PREPAYMENT: Any payment of principal or other
recovery on a Mortgage Loan, including Liquidation Proceeds, which is received
in advance of its scheduled Due Date and is not accompanied by an amount as to
interest representing scheduled interest on such payment due on any date or
dates in any month or months subsequent to the month of prepayment.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution
Date, the sum of the following:
(i) the principal portion of each Monthly Payment received by
the Master Servicer during the related Due Period (other than Monthly
Payments due after the related Due Period, which shall be treated as if
received during the Due Period in which they are
due) on each Outstanding Mortgage Loan;
(ii) the principal portion of the Repurchase Price of any
Mortgage Loan repurchased during the related Due Period pursuant to
Section 2.02, 2.04 or 3.18 and the principal portion of any
Substitution Adjustment Amounts deposited into the Certificate Account
on or prior to such Determination Date;
(iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal Prepayments in
Full, Curtailments, Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) received during the related Due Period (or deemed to have
been so received) to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan;
(iv) with respect to the Distribution Date following the
termination of the Pre- Funding Period, that amount, if any, remaining
on deposit in the Pre-Funding Account;
(v) the principal portion of any Realized Losses incurred on
the Mortgage Loans in the calendar month preceding such Distribution
Date;
MINUS
(vi) expenses incurred by and reimbursable to the Master
Servicer or the Company pursuant to Sections 3.07, 3.13, 6.03, 10.02 or
otherwise under this Agreement.
PTCE 95-60: The Prohibited Transaction Class Exemption issued
by the United States Department of Labor and set forth in 60 Federal Register
35925.
PURCHASE PRICE: As defined in Section 2.09.
26
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan
substituted by the Seller or the Company for a Deleted Mortgage Loan which must,
on the date of such substitution, as confirmed in an Officer's Certificate
delivered to the Trustee, (i) have an outstanding principal balance, after
deduction of the principal portion of the Monthly Payment received in the month
of substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any Substitution Adjustment Amount to be deposited
by the Seller in the Certificate Account in the month of substitution); (ii)
have a Mortgage Rate, Net Mortgage Rate, Gross Margin (with respect to each
Adjustable Rate Mortgage Loan) and Maximum Mortgage Rate (with respect to each
Adjustable Rate Mortgage Loan) no lower than the Mortgage Rate, Net Mortgage
Rate, Gross Margin (with respect to each Adjustable Rate Mortgage Loan) and
Maximum Mortgage Rate (with respect to each Adjustable Rate Mortgage Loan),
respectively, of the Deleted Mortgage Loan as of the date of substitution; (iii)
have a Loan-to-Value Ratio at the time of substitution no higher than that of
the Deleted Mortgage Loan at the time of substitution; (iv) have a remaining
term to stated maturity not greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (v) shall be of the same or higher credit
quality classification (determined in accordance with the Seller's underwriting
guidelines) as the Deleted Mortgage Loan; (vi) with respect to each Adjustable
Rate Mortgage Loan, be a first lien adjustable rate Mortgage Loan having the
same Index as the Deleted Mortgage Loan and with respect to each Fixed Rate
Mortgage Loan, be a first lien fixed rate Mortgage Loan and (vii) satisfy the
criteria set forth from time to time in the definition of "qualified mortgage"
as defined in Section 860G(a)(3) of the Code (or any successor statute thereto
and applicable to the Trust Fund).
RATING AGENCY: With respect to the Offered Certificates, DCR
and ▇▇▇▇▇'▇. If either agency or a successor is no longer in existence, "Rating
Agency" shall be such statistical credit rating agency, or other comparable
Person, designated by the Company, notice of which designation shall be given to
the Trustee and the Master Servicer.
REALIZED LOSS: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or value of the REO Property) as of the date of Cash Liquidation
or REO Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the
Net Mortgage Rate from the Due Date as to which interest was last paid to
Certificateholders up to the last day of the month in which the Cash Liquidation
(or REO Disposition) occurred on the Stated Principal Balance of such Mortgage
Loan (or REO Property) outstanding during each Due Period that such interest was
not paid, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer with
respect to related expenses as to which the Master Servicer is entitled to
reimbursement thereunder but which have not been previously reimbursed. With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the object of a Debt Service Reduction,
the amount of such Debt Service Reduction. Notwithstanding the above, neither a
Deficient Valuation
27
nor a Debt Service Reduction shall be deemed a Realized Loss hereunder so long
as the Master Servicer has delivered to the Trustee an Officer's Certificate
stating that the Master Servicer is diligently pursuing any remedies that may
exist in connection with the representations and warranties made regarding the
related Mortgage Loan and such Mortgage Loan is not in default with regard to
payments due thereunder.
RECORD DATE: With respect to each Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
the related Distribution Date occurs.
REGULAR CERTIFICATE: Any Class A Certificate, Class M
Certificate, Class P Certificate or Class CE Certificate.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC ADMINISTRATOR: The Master Servicer. If the Master
Servicer is found by a court of competent jurisdiction to no longer be able to
fulfill its obligations as REMIC Administrator under this Agreement, the Master
Servicer or Trustee acting as Master Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC I: The segregated pool of assets, with respect to which
a REMIC election is to be made, consisting of:
(i) the Mortgage Loans, Prepayment Charges and the
related Mortgage Files;
(ii) all payments and collections in respect of the
Mortgage Loans of interest and principal due after
the related Cut-off Date as shall be on deposit in
the Certificate Account (other than any amounts
representing any Master Servicer Prepayment Charge
Payment Amount) or in the Distribution Account and
identified as belonging to the Trust Fund;
(iii) property which secured a Mortgage Loan and which has
been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of
foreclosure;
(iv) any insurance policies relating to the Mortgage
Loans;
(v) the Company's rights under the Mortgage Loan Purchase
Agreement; and
(vi) all proceeds of clauses (i) through (v) above.
The Pre-Funding Account and Capitalized Interest Account shall not be assets of
REMIC I.
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REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the Uncertificated REMIC I Pass-Through Rate for
Uncertificated REMIC I Regular Interest I-LT1 minus two (2) times the weighted
average of the Uncertificated REMIC II Pass-Through Rates for Uncertificated
REMIC II Regular Interest II-LT2, Uncertificated REMIC II Regular Interest
II-LT3, Uncertificated REMIC II Regular Interest II-LT4, Uncertificated REMIC II
Regular Interest II-LT5 and Uncertificated REMIC II Regular Interest II- LT6,
with the rate on Uncertificated REMIC II Regular Interest II-LT6 equal to zero
for purposes of this calculation, divided by (b) 12.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the Uncertificated REMIC I Regular Interests minus (ii) the aggregate of the
Uncertificated Principal Balances of Uncertificated REMIC I Regular Interest
I-LT2, Uncertificated REMIC I Regular Interest I-LT3, Uncertificated REMIC I
Regular Interest I-LT4 and Uncertificated REMIC I Regular Interest I-LT5, in
each case as of such date of determination.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Principal Balances of Uncertificated REMIC I Regular Interest
I-LT2, Uncertificated REMIC I Regular Interest I-LT3, Uncertificated REMIC I
Regular Interest I- LT4 and Uncertificated REMIC I Regular Interest I-LT5 and
the denominator of which is the aggregate of the Uncertificated Principal
Balances of Uncertificated REMIC I Regular Interest I-LT2, Uncertificated REMIC
I Regular Interest I-LT3, Uncertificated REMIC I Regular Interest I-LT4,
Uncertificated REMIC I Regular Interest I-LT5 and Uncertificated REMIC I Regular
Interest I-LT6.
REMIC I REQUIRED OVERCOLLATERALIZATION AMOUNT: 1% of the
Required Overcollateralization Amount.
REMIC II: The segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests conveyed in trust to the Trustee for
the benefit of REMIC III, as holder of the Uncertificated REMIC II Regular
Interests, and the Holders of the Class R-II Certificates, with respect to which
a separate REMIC election is to be made. The Pre-Funding Account and Capitalized
Interest Account shall not be assets of REMIC II.
REMIC III: The segregated pool of assets consisting of the
Uncertificated REMIC II Regular Interests conveyed in trust to the Trustee for
the benefit of the holders of the REMIC III Certificates with respect to which a
separate REMIC election is to be made. The Pre-Funding Account and the
Capitalized Interest Account shall not be assets of REMIC III.
REMIC III CERTIFICATES: Any Regular Certificate or Class R-III
Certificate.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of
29
Chapter 1 of the Code, and related provisions, and temporary and final
regulations (or, to the extent not inconsistent with such temporary or final
regulations, proposed regulations) and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
RENTS FROM REAL PROPERTY: With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
REO ACCOUNT: The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.20.
REO ACQUISITION: The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.13.
REO DISPOSITION: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO IMPUTED INTEREST: As to any REO Property, for any period,
an amount equivalent to interest (at the Net Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
Principal Balance of the related Mortgage Loan as of the date of acquisition
thereof for such period.
REO PROCEEDS: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
such REO Property) which proceeds are required to be deposited into the
Certificate Account pursuant to Section 3.20(d).
REO PROPERTY: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed in lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPLACEMENT CUT-OFF DATE: With respect to any Qualified
Substitute Mortgage Loan, the later of (i) the first day of the calendar month
in which such Qualified Substitute Mortgage Loan is conveyed to the Trust Fund
and (ii) the date of origination thereof, if any such Qualified Substitute
Mortgage Loan is originated in the month in which such Qualified Substitute
Mortgage Loan is conveyed to the Trust Fund.
REPURCHASE PRICE: With respect to any Mortgage Loan (or REO
Property) required to be or otherwise purchased on any date pursuant to Section
2.02, 2.04 or 3.18, an amount equal to the sum, without duplication, of (i) 100%
of the principal balance thereof (without reduction for any amounts charged off)
and (ii) unpaid accrued interest at the Mortgage Rate (or at the Net Mortgage
Rate in case of a purchase by the Master Servicer) on the principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase plus (iii) the amount
of any unreimbursed Servicing Advances made with respect
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to such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer
pursuant to Section 3.07 and not included in clause (iii) of this definition.
REQUEST FOR RELEASE: A request for release, the form of which
is attached as Exhibit D hereto.
REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date (i) prior to the Stepdown Date, $13,749,900, (ii) on or after
the Stepdown Date and provided that neither a Trigger Event nor an
Overcollateralization Reduction Lockout Event is in effect, the greater of (x)
11.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) $1,875,000, and (iii) on or after the
Stepdown Date and if either a Trigger Event or an Overcollateralization
Reduction Lockout Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any officer of the Corporate Trust Department of the Trustee, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other
officer of the Trustee to whom, with respect to a particular matter, such matter
is referred.
SELLER: WMC Mortgage Corp., a California corporation.
SERVICER TERMINATION EVENT: With respect to any Distribution
Date, the Servicer Termination Event has occurred (i) with respect to a
Distribution Date occurring between the Initial Cut-off Date and the fifth
anniversary of the Cut-off Date if on such Distribution Date (X) the sum of (a)
the product of (1) the percentage obtained by dividing the balance of 30 day
Delinquent Mortgage Loans by the sum of the Cut-off Date Pool Principal Balance
and the aggregate Stated Principal Balances of the Subsequent Mortgage Loans as
of the related Cut-off Date, and (2) 12.41%; plus (b) the product of (1) the
percentage obtained by dividing the balance of 60 day Delinquent Mortgage Loans
by the sum of the Cut-off Date Pool Principal Balance and the aggregate Stated
Principal Balances of the Subsequent Mortgage Loans as of the related Cut-off
Date and (2) 24.82%; plus (c) the product of (1) the percentage obtained by
dividing the balance of 90 days or more Delinquent Mortgage Loans by the sum of
the Cut-off Date Pool Principal Balance and the aggregate Stated Principal
Balances of the Subsequent Mortgage Loans, and (2) 49.64%; plus (d) the
percentage obtained by dividing Cumulative Net Losses by the sum of the Cut-off
Date Pool Principal Balance and the aggregate Stated Principal Balances of the
Subsequent Mortgage Loans as of the related Cut-off Date, in each case as of the
last day of the calendar month preceding such Distribution Date, exceeds (Y)
14.75% and (ii) with respect to a Distribution Date occurring after the fifth
anniversary of the Cut-off Date if on such Distribution Date the sum set forth
in (X) above, in each case as of the last day of the calendar month preceding
such Distribution Date, exceeds 22.25%.
SERVICING ACCOUNTS: The account or accounts created and
maintained pursuant to Section 3.08.
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SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event by the Master 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,
(iii) the management and liquidation of any REO Property and (iv) compliance
with the obligations under Sections 3.01, 3.08, 3.11(c), 3.20 and 3.13,
including, if the Master Servicer or any Affiliate of the Master Servicer
provides services such as appraisals and brokerage services that are customarily
provided by Persons other than servicers of mortgage loans, reasonable
compensation for such services.
SERVICING FEE: With respect to any Mortgage Loan and
Distribution Date, the fee payable monthly to the Master Servicer in respect of
servicing compensation that accrues at an annual rate of 0.50% on the principal
balance on which interest accrues on such Mortgage Loan as
of the first day of the related Due Period.
SERVICING OFFICER: Any employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and specimen signature appear on a list of servicing
officers furnished to the Trustee by the Master Servicer, as such list may
from time to time be amended.
SPECIAL SERVICER: Ocwen Federal Bank FSB, a federal savings
bank.
SPECIAL SERVICER DELINQUENCY TEST: The Special Servicer
Delinquency Test will be met with respect to any Distribution Date commencing
with the 6th Distribution Date and ending on the 60th Distribution Date if the
Delinquency Percentage exceeds: 10% for the 6th through 11th Distribution Dates;
12% for the 12th through 17th Distribution Dates; 14% for the 18th through 35th
Distribution Dates and 17% for the 36th through 60th Distribution Dates;
provided that a Mortgage Loan that would otherwise be included in the Special
Servicer Delinquency Test will not be so included if the Master Servicer
provides to the Trustee reasonably conclusive evidence that the related
Mortgaged Property has been adversely affected by a natural disaster, war, Act
of God or similar circumstance not within the control of the Master Servicer,
and provided further that the immediately preceding proviso shall not apply
three months after the submission of such evidence
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property, at any given time, the scheduled principal balance thereof
at the close of business on the related Cut-off Date after application of all
principal and interest due on the Cut-off Date, whether or not received, reduced
by all amounts allocable to principal that have been distributed to
Certificateholders with respect to such Mortgage Loan, and as further reduced to
the extent of any Realized Loss incurred with respect to such Mortgage Loan on
or before the last day of the most recently ended Due Period.
STEPDOWN DATE: The later to occur of (x) the Distribution Date
in November 2002 and (y) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans but prior to
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any Distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date) is greater
than or equal to 46%.
SUBSEQUENT CUT-OFF DATE: With respect to any Subsequent
Mortgage Loan, the later of (x) the close of business of the first day of the
month in which such Subsequent Mortgage Loan is transferred by the Seller to the
Company and from the Company to the Trust Fund and (y) the date of origination
thereof, if any such Subsequent Mortgage Loan is originated in the month of the
related Subsequent Transfer Date.
SUBSEQUENT MORTGAGE LOAN: Each Mortgage Loan sold and assigned
by the Seller to the Company and from the Company to the Trust Fund pursuant to
a Subsequent Transfer Agreement.
SUBSEQUENT MORTGAGE LOAN SCHEDULE: The schedule(s) listing the
Subsequent Mortgage Loans sold and conveyed to the Trust Fund on any Subsequent
Transfer Date pursuant to the related Subsequent Transfer Agreement.
SUBSEQUENT TRANSFER AGREEMENT: Each subsequent transfer
agreement dated as of a Subsequent Transfer Date by which Subsequent Mortgage
Loans are sold and assigned to the Trust Fund, in the form of Exhibit J hereto.
SUBSEQUENT TRANSFER DATE: The date specified in each
Subsequent Transfer Agreement as the date on which Subsequent Mortgage Loans
described therein are to be sold, transferred and assigned to the Trust Fund.
SUBSERVICER: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement.
SUBSERVICING AGREEMENT: The written contract between the
Master Servicer and any Subservicer relating to servicing and administration of
certain Mortgage Loans specified therein as permitted in Section 3.02 hereof.
SUBSTITUTION ADJUSTMENT AMOUNT: As defined in Section 2.04
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 REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of REMIC I and REMIC II due to their classification as
REMICs 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.
TRANSFER: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
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TRANSFEREE: Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
TRANSFEROR: Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
TRIGGER EVENT: A Trigger Event has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds the lesser of (i) 40% of
the Credit Enhancement Percentage or (ii) 18.4%.
TRUST FUND: REMIC I, REMIC II, REMIC III, the Pre-Funding
Account and the Capitalized Interest Account.
TRUSTEE FEE: The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05, which amount shall equal one twelfth
of the product of (i) the Trustee Fee Rate, multiplied by (ii) the aggregate
Stated Principal Balance of the Mortgage Loans and any REO Properties and any
amount in the Pre-Funding Account as of the first day of the related Due Period
(or, in the case of the initial Distribution Date, as of the Cut-off Date).
TRUSTEE FEE RATE: 0.0060% per annum.
UNCERTIFICATED CORRESPONDING COMPONENT: With respect to:
Uncertificated REMIC II Regular Interest II-LT1, Uncertificated REMIC I Regular
Interest I-LT1; Uncertificated REMIC II Regular Interest II-LT2 and
Uncertificated REMIC II Regular Interest II-LT2S, Uncertificated REMIC I Regular
Interest I-LT2; Uncertificated REMIC II Regular Interest II-LT3 and
Uncertificated REMIC II Regular Interest II-LT3S, Uncertificated REMIC I Regular
Interest I-LT3; Uncertificated REMIC II Regular Interest II-LT4 and
Uncertificated REMIC II Regular Interest II- LT4S, Uncertificated REMIC I
Regular Interest I-LT4; Uncertificated REMIC II Regular Interest II- LT5 and
Uncertificated REMIC II Regular Interest II-LT5S, Uncertificated REMIC I Regular
Interest I-LT5; Uncertificated REMIC II Regular Interest II-LT6, Uncertificated
REMIC I Regular Interest I-LT6; and Uncertificated REMIC II Regular Interest
II-LTP, Uncertificated REMIC I Regular Interest I-LTP.
UNCERTIFICATED INTEREST: With respect to any Uncertificated
REMIC I Regular Interest for any Distribution Date, one month's interest at the
Uncertificated REMIC I Pass-Through Rate applicable to such Uncertificated REMIC
I Regular Interest for such Distribution Date, accrued on the Uncertificated
Principal Balance thereof immediately prior to such Distribution Date. With
respect to any Uncertificated REMIC II Regular Interest for any Distribution
Date, one month's interest at the Uncertificated REMIC II Pass-Through Rate
applicable to such Uncertificated REMIC II Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance thereof
immediately prior to such Distribution Date. Uncertificated Interest in respect
of any Uncertificated REMIC I Regular Interest (other than Uncertificated REMIC
I Regular Interest I- LTP), Uncertificated REMIC II Regular Interest II-LT1,
Uncertificated REMIC II Regular Interest II-LT6, Uncertificated REMIC II Regular
Interest II-LT2S, Uncertificated REMIC II Regular Interest II-LT3S,
Uncertificated REMIC II Regular Interest II-LT4S and Uncertificated REMIC II
Regular
34
Interest II-LT5S, shall accrue on the basis of a 360-day year consisting of
twelve 30-day months; Uncertificated Interest in respect of Uncertificated REMIC
II Regular Interest II-LT2, Uncertificated REMIC II Regular Interest II-LT3,
Uncertificated REMIC II Regular Interest II-LT4 and Uncertificated REMIC II
Regular Interest II-LT5, shall accrue on the basis of a 360-day year and the
actual number of days in the applicable Interest Accrual Period. Uncertificated
Interest with respect to each Distribution Date, as to any Uncertificated REMIC
I Regular Interest or Uncertificated REMIC II Regular Interest, shall be reduced
by an amount equal to the sum of (a) the aggregate Prepayment Interest
Shortfall, if any, for such Distribution Date to the extent not covered by
payments pursuant to Section 4.10 and (b) the aggregate amount of any shortfalls
resulting from application of the Relief Act, if any, allocated, in each case,
to such Uncertificated REMIC I Regular Interest or Uncertificated REMIC II
Regular Interest pursuant to Section 1.02. In addition, Uncertificated Interest
with respect to each Distribution Date, as to any Uncertificated REMIC I Regular
Interest or Uncertificated REMIC II Regular Interest, shall be reduced by
Realized Losses, if any, allocated to such Uncertificated REMIC I Regular
Interest or Uncertificated REMIC II Regular Interest pursuant to Section 1.02
and Section 4.05.
UNCERTIFICATED NOTIONAL AMOUNT : With respect to
Uncertificated REMIC II Regular Interest II-LT2S, Uncertificated REMIC II
Regular Interest II-LT3S, Uncertificated REMIC II Regular Interest II-LT4S and
Uncertificated REMIC II Regular Interest II-LT5S, the Uncertificated Principal
Balance of Uncertificated REMIC I Regular Interest I-LT2, Uncertificated REMIC I
Regular Interest I-LT3, Uncertificated REMIC I Regular Interest I-LT4 and
Uncertificated REMIC I Regular Interest I-LT5, respectively.
UNCERTIFICATED PRINCIPAL BALANCE: The amount of any
Uncertificated REMIC I Regular Interest or Uncertificated REMIC II Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Principal Balance of each Uncertificated REMIC I Regular
Interest and each Uncertificated REMIC II Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated principal balance. On each Distribution Date, the Uncertificated
Principal Balance of each Uncertificated REMIC I Regular Interest and each
Uncertificated REMIC II Regular Interest shall be reduced by all distributions
of principal made on such Uncertificated REMIC I Regular Interest or such
Uncertificated REMIC II Regular Interest, as applicable, on such Distribution
Date pursuant to Section 4.02, and, if and to the extent necessary and
appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.05 and the Uncertificated Principal Balances of
Uncertificated REMIC I Regular Interest I-LT6 and Uncertificated REMIC II
Regular Interest II-LT6 shall be increased by interest deferrals as provided in
Section 4.02(b)(1)(A)(i) and Section 4.01(b)(1)(B)(i), respectively. The
Uncertificated Principal Balance of each Uncertificated REMIC I Regular Interest
and each Uncertificated REMIC II Regular Interest shall never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to each
of the Uncertificated REMIC I Regular Interests and any Distribution Date other
than the first Distribution Date, the weighted average of the Expense Adjusted
Mortgage Rates on the then outstanding Mortgage Loans and REO Properties. With
respect to the first Distribution Date, the Uncertificated REMIC I Pass-Through
Rate shall be: (i) 6.04435% per annum with respect to Uncertificated REMIC I
Regular Interest I-LT1 and Uncertificated REMIC I Regular Interest I-LT6, (ii)
5.84000%
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per annum with respect to Uncertificated REMIC I Regular Interest I-LT2, (iii)
6.29000% per annum with respect to Uncertificated REMIC I Regular Interest
I-LT3, (iv) 6.89000% per annum with respect to Uncertificated REMIC I Regular
Interest I-LT4 and (v) 8.89000% per annum with respect
to Uncertificated REMIC I Regular Interest I-LT5.
UNCERTIFICATED REMIC I REGULAR INTEREST: Any of the seven
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I. Each Uncertificated
REMIC I Regular Interest (other than Uncertificated REMIC I Regular Interest
I-LTP, with respect to interest) shall accrue interest at the related
Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto. The designations for
the respective Uncertificated REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT1: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT2: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT3: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT4: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT5: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest"
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in REMIC I which shall accrue interest at the related Uncertificated REMIC I
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST I-LT6: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC I REGULAR INTEREST LTP: One of the
separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a "regular interest" in REMIC I which shall be
entitled to any Prepayments collected by the Master Servicer and any Master
Servicer Prepayment Charge Payment Amount and shall be entitled to a
distribution of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to
Uncertificated REMIC II Regular Interest II-LT1 and Uncertificated REMIC II
Regular Interest II-LT6 and any Distribution Date other than the first
Distribution Date, the weighted average of the Expense Adjusted Mortgage Rates
on the then outstanding Mortgage Loans and REO Properties. With respect to the
first Distribution Date, the Uncertificated REMIC II Pass-Through Rate shall be
6.04435% per annum with respect to Uncertificated REMIC II Regular Interest
II-LT1 and Uncertificated REMIC II Regular Interest II-LT6. With respect to
Uncertificated REMIC II Regular Interest II-LT2, Uncertificated REMIC II Regular
Interest II-LT3, Uncertificated REMIC II Regular Interest II-LT4 and
Uncertificated REMIC II Regular Interest II-LT5 and any Distribution Date other
than the first Distribution Date, the lesser of (i) the related LIBOR
Certificate Rate (based on the actual number of days elapsed in the applicable
Interest Accrual Period and a 360-day year) and (ii) the Net WAC Pass-Through
Rate, multiplied by the actual number of days elapsed in the related Interest
Accrual Period divided by 360. With respect to Uncertificated REMIC II Regular
Interest II-LT2, Uncertificated REMIC II Regular Interest II-LT3, Uncertificated
REMIC II Regular Interest II-LT4 and Uncertificated REMIC II Regular Interest
II-LT5 and the first Distribution Date, the related LIBOR Certificate Rate
(based on the actual number of days elapsed in the applicable Interest Accrual
Period and a 360-day year). With respect to Uncertificated REMIC II Regular
Interest II- LT2S, Uncertificated REMIC II Regular Interest II-LT3S,
Uncertificated REMIC II Regular Interest II-LT4S and Uncertificated REMIC II
Regular Interest II-LT5S and any Distribution Date, a rate per annum equal to
excess of the Uncertificated REMIC I Pass-Through Rate for the related
Uncertificated Corresponding Component over the Uncertificated REMIC II
Pass-Through Rate for Uncertificated REMIC II Regular Interest II-LT2,
Uncertificated REMIC II Regular Interest II-LT3, Uncertificated REMIC II Regular
Interest II-LT4 and Uncertificated REMIC II Regular Interest II- LT5,
respectively.
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UNCERTIFICATED REMIC II REGULAR INTEREST: Any of the eleven
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder designated as a "regular interest" in REMIC II. Each Uncertificated
REMIC II Regular Interest (other than Uncertificated REMIC II Regular Interest
II-LTP, with respect to interest) shall accrue interest at the related
Uncertificated REMIC II Pass-Through Rate in effect from time to time, and each
Uncertificated REMIC II Regular Interest shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its related initial Uncertificated Principal Balance as set forth in
the Preliminary Statement hereto. The designations for the respective
Uncertificated REMIC II Regular Interests are set forth in the Preliminary
Statement hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT1: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT2: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT3: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT4: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT5: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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UNCERTIFICATED REMIC II REGULAR INTEREST II-LT6: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LTP: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall be
entitled to any Prepayment Charges collected by the Master Servicer and any
Master Servicer Prepayment Charge Payment Amount, and shall be entitled to a
distribution of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT2S: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate on its related
Uncertificated Notional Amount.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT3S: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate on its related
Uncertificated Notional Amount.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT4S: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate on its related
Uncertificated Notional Amount.
UNCERTIFICATED REMIC II REGULAR INTEREST II-LT5S: One of the
separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a "regular interest" in REMIC II which shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate on its related
Uncertificated Notional Amount.
UNIFORM SINGLE ATTESTATION PROGRAM FOR MORTGAGE BANKERS: The
Uniform Single Attestation Program for Mortgage Bankers, as published by the
Mortgage Bankers Association of America and effective with respect to fiscal
periods ending on or after December 15, 1995.
UNITED STATES PERSON: A citizen or resident of the United
States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations) or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
39
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
UNPAID INTEREST SHORTFALL: With respect to each Class of
Offered Certificates and each Distribution Date, any Accrued Certificate
Interest remaining unpaid as to such Class of Offered Certificates as a result
of the insufficiency of the Interest Remittance Amount to pay Accrued
Certificate Interest to such Certificates pursuant to the priority of payment
provisions of Section 4.02(b)(2) for such Distribution Date, plus any such
shortfall for all prior Distribution Dates, and plus interest thereon at the
related Pass-Through Rate immediately prior to such Distribution Date.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A Certificates, the Class M Certificates and the Class CE Certificates
in proportion to the then outstanding Certificate Principal Balances of their
respective Certificates, 1% of all Voting Rights will be allocated to the
holders of the Class P Certificates and 1/3 of 1% of all Voting Rights will be
allocated among the holders of each Class of Residual Certificates. The Voting
Rights allocated to each Class of Certificate shall be allocated among Holders
of each such Class in accordance with their respective Percentage Interests as
of the most recent Record Date.
Section 1.02. ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of Accrued Certificate
Interest for the Class A Certificates, the Class M Certificates and the Class CE
Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 4.10) and shortfalls resulting from
application of the Relief Act incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, among the Class CE Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
and, thereafter, among the Class A Certificates and the Class M Certificates on
a PRO RATA basis based on, and to the extent of, one month's interest at the
then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance of each such Certificate and (2) the aggregate amount of any
Realized Losses incurred for any Distribution Date shall be allocated among the
Class CE Certificates on a PRO RATA basis based on, and to the extent of, one
month's interest at the then applicable Pass-Through Rate on the Notional Amount
of each such Certificate.
For purposes of calculating the amount of Uncertificated
Interest for the Uncertificated REMIC I Regular Interests for any Distribution
Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Master Servicer pursuant to Section 4.10) and any
shortfalls resulting from application of the Relief Act incurred in respect of
the Mortgage Loans for any Distribution Date shall be allocated first, to
Uncertificated Interest payable to Uncertificated REMIC I Regular Interest I-LT1
and Uncertificated REMIC I
40
Regular Interest I-LT6 up to an aggregate amount equal to the REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively, and thereafter among
Uncertificated REMIC I Regular Interest I-LT1, Uncertificated REMIC I Regular
Interest I-LT2, Uncertificated REMIC I Regular Interest I- LT3, Uncertificated
REMIC I Regular Interest I-LT4, Uncertificated REMIC I Regular Interest I-LT5
and Uncertificated REMIC I Regular Interest I-LT6 PRO RATA based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Uncertificated Principal Balance of each such
Uncertificated REMIC I Regular Interest.
All Prepayment Interest Shortfalls and shortfalls resulting
from application of the Relief Act on the Uncertificated REMIC II Regular
Interests shall be allocated by the Trustee on each Distribution Date among the
Uncertificated REMIC II Regular Interests in the proportion that Prepayment
Interest Shortfalls and shortfalls resulting from application of the Relief Act
are allocated to the related Uncertificated Corresponding Component.
41
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
(a) The Company, concurrently with the execution and delivery
of this Agreement, does hereby assign to the Trustee, for the benefit of the
Certificateholders, without recourse all the right, title and interest of the
Company in, to and under the Initial Mortgage Loans, including all interest due
and principal received, with respect to the Initial Mortgage Loans, after the
Initial Cut-off Date and all other assets constituting the Trust Fund.
The Company, concurrently with the execution and
delivery of this Agreement, does hereby assign to the Trustee all of its rights
and interest under the Mortgage Loan Purchase Agreement, including without
limitation, the rights of the Company to enforce the obligations of the Seller
with respect to the representations and warranties set forth therein.
(b) In connection with such assignment, the Company shall
cause to be delivered to, and deposited with, the Trustee the following
documents or instruments (or copies thereof as
permitted by this Section):
(i) The original Mortgage Note, endorsed "Pay to the
order of Bank One, National Association, as Trustee under the
Pooling and Servicing Agreement, dated September 30, 1999, WMC
Series 1999-A without recourse" and showing an unbroken chain
of endorsements from the originator thereof to the Person
endorsing it to the Trustee, or with respect to any Mortgage
Loan as to which the original Mortgage Note has been lost,
misplaced or destroyed, a lost note affidavit in the form
attached hereto as Exhibit L;
(ii) the original Mortgage with evidence of recording
thereon, or, if the original Mortgage has not yet been
returned from the public recording office, a copy of the
original Mortgage certified by the Seller, Seller's agent or
the public recording office in which such original Mortgage
has been submitted for recording;
(iii) an Assignment of the Mortgage from the Seller
to "Bank One, National Association, as Trustee under the
Pooling and Servicing Agreement, dated September 30, 1999, WMC
Series 1999-A, without recourse" which shall be in form and
substance acceptable for recording other than recording
information not yet returned from the recorder's office, which
shall be provided promptly upon receipt thereof by the Seller;
(iv) originals of any intervening assignments of the
Mortgage, with evidence of recording thereon, or, if the
original of any such intervening assignment has not yet been
returned from the public recording office, a copy of such
original intervening assignment certified by the Seller,
Seller's agent or the public recording
42
office in which such original intervening assignment has been
submitted for recording;
(v) the original policy of title insurance (or a
commitment for title insurance, if the policy is being held by
the title insurance company pending recordation of the
Mortgage or has otherwise not yet been received by the title
company); and
(vi) a true and correct copy of each assumption,
modification, consolidation or substitution agreement, if any,
relating to the Mortgage Loan.
Promptly after the Closing Date (or after the date of transfer
of any Qualified Substitute Mortgage Loan or Subsequent Mortgage Loan), the
Seller at its own expense shall complete in the name of the Trustee and submit
for recording in the appropriate public recording office for real property
records each of the Assignments referred to in clause (iii) above except in
states where, in the opinion of counsel acceptable to the Trustee, the Rating
Agencies and the Master Servicer, such recording is not required to protect the
Trustee's interest in the Mortgage Loan against the claim of any subsequent
transferee or any successor to or creditor of the Seller or the originator of
such Mortgage Loan, and the Trustee shall retain a photocopy of each such
Assignment. If any Assignment is lost or returned unrecorded to the Trustee
because of any defect therein, the Seller shall prepare a substitute Assignment
or cure such defect, as the case may be, and the Seller shall cause such
substitute Assignment to be recorded in accordance with this paragraph.
In instances where an original Mortgage or any original
intervening assignment of the Mortgage was not, in accordance with clause (iii)
or (iv) above, delivered by the Seller to the Trustee on or prior to the Closing
Date (or the date of transfer of any Qualified Substitute Mortgage Loan or
Subsequent Mortgage Loan), the Seller shall deliver or cause to be delivered the
originals of such documents to the Trustee promptly upon receipt thereof.
The Trustee hereby acknowledges its acceptance of all right,
title and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to the Trust Fund pursuant to this Section 2.01.
(c) It is intended that the conveyances by the Company to the
Trustee of the Mortgage Loans as provided for in this Section 2.01 and the
Uncertified REMIC I Regular Interests provided for in Section 2.06 and the
Uncertificated REMIC II Regular Interests provided for in Section 2.07 be
construed as a sale by the Company to the Trustee of the Mortgage Loans, the
Uncertificated REMIC I Regular Interests and the Uncertificated REMIC II Regular
Interests for the benefit of the Certificateholders. Further, it is not intended
that any such conveyance be deemed to be a pledge of the Mortgage Loans, the
Uncertificated REMIC I Regular Interests and the Uncertificated REMIC II Regular
Interests by the Company to the Trustee to secure a debt or other obligation of
the Company. However, in the event that the Mortgage Loans, the Uncertificated
REMIC I Regular Interests and the Uncertificated REMIC II Regular Interests are
held to be property of the Company, or if for any reason this Agreement is held
or deemed to create a security interest in the Mortgage Loans, the
Uncertificated REMIC I Regular Interests and the Uncertificated REMIC
43
II Regular Interests, then it is intended that (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyances provided for in this Section 2.01
shall be deemed to be (1) a grant by the Company to the Trustee of a security
interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to
(A) the Mortgage Loans, including the related Mortgage Note, the Mortgage, any
insurance policies and all other documents in the related Mortgage File, (B) all
amounts payable pursuant to the Mortgage Loans in accordance with the terms
thereof, (C) the Uncertificated REMIC I Regular Interests, (D) the
Uncertificated REMIC II Regular Interests and (E) any and all general
intangibles consisting of, arising from or relating to any of the foregoing, and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Certificate Account, the
Distribution Account, the Pre-Funding Account and the Capitalized Interest
Account whether in the form of cash, instruments, securities or other property
and (2) an assignment by the Company to the Trustee of any security interest in
any and all of the Seller's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to the
property described in the foregoing clauses (1)(A), (B), (C), (D) and (E)
granted by the Seller to the Company pursuant to the Mortgage Loan Purchase
Agreement; (c) the possession by the Trustee, or any agent of the Trustee of
Mortgage Notes or such other items of property constituting instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party," or possession by a purchaser or a person designated by such
secured party, for purposes of perfecting the security interest pursuant to the
California Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction (including, without limitation, Section 9-305, 8-313 or
8-321 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
The Company and, at the Company's direction, the Seller and
the Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, the Uncertificated
REMIC I Regular Interests, the Uncertificated REMIC II Regular Interests and the
other property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Company shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date, and the Trustee shall
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Company, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Mortgage Loans, the Uncertificated REMIC I Regular Interests and the
Uncertificated REMIC II Regular Interests, including without limitation (x)
continuation statements, and (y) such other statements as may be occasioned by
(1) any change of name of the Seller, the Company or the Trustee (such
preparation and filing shall be at the expense of the Trustee, if occasioned by
a change in the
44
Trustee's name), or (2) any change of location of the place of business or the
chief executive office of the Seller or the Company.
Section 2.02. ACCEPTANCE BY TRUSTEE.
The Trustee acknowledges receipt of the documents referred to
in Section 2.01(b)(i) through (vi) above, declares that it, or its agent, holds
and will hold such documents and the other documents constituting a part of the
Mortgage Files delivered to it and all such other assets included in the
definition of Trust Fund in trust for the use and benefit of all present and
future Certificateholders and agrees to execute and deliver on the Closing Date
an acknowledgment of receipt in the form of Exhibit E-1 hereto (the "Initial
Certification"). The Trustee agrees, for the benefit of Certificateholders, to
review each Mortgage File delivered to it pursuant to Section 2.01(b) within 45
days after the Closing Date (or, with respect to any Subsequent Mortgage Loan or
Qualified Substitute Mortgage Loan, within 45 days after the conveyance and
assignment thereof) to ascertain that all required documents (specifically as
set forth in Section 2.01(b)), have been executed and received, and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule,
as supplemented, that have been conveyed to it and shall deliver to the Company,
the Seller and the Master Servicer a certification in the form of Exhibit E-2
hereto (the "Interim Certification").
If within such 45 day period the Trustee finds any document or
documents constituting a part of a Mortgage File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule, or if in the course of its review the Trustee determines that
such Mortgage File is otherwise defective in any material respect, the Trustee
shall promptly so notify the Master Servicer, the Seller and the Company. The
Seller shall correct or cure such omission or defect within 90 days from the
date the Seller was notified of such omission or defect and, if it does not
correct or cure such omission or defect within such period, the Seller shall
purchase such Mortgage Loan from REMIC I at its Repurchase Price, in either case
within 90 days from the date it was notified of such omission or defect;
provided that if the omission or defect would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or repurchase must occur within 90 days from the date such breach
was discovered. The Repurchase Price for any such Mortgage Loan purchased by the
Seller shall be deposited or caused to be deposited by the Master Servicer in
the Certificate Account maintained by it pursuant to Section 3.06 and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or any Custodian, as the case may be, shall
release to the Master Servicer the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
the Seller or its designee, as the case may be, ownership of any Mortgage Loan
released pursuant hereto and thereafter such Mortgage Loan shall not be part of
the Trust Fund. It is understood and agreed that the obligation of the Seller to
so cure or purchase any Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to the Certificateholders or the
Trustee on behalf of Certificateholders.
45
In addition to the foregoing, the Trustee also agrees to
conduct a review during the 18 months after the Closing Date indicating the
current status of the exceptions previously indicated on the Initial
Certification and deliver a certification with respect thereto in the form
attached hereto as Exhibit E-3 (the "Final Certification"). After delivery of
the Final Certification, the Trustee and the Master Servicer shall monitor no
less frequently than monthly the status of the exceptions, if any, and deliver
updated certifications indicating the then current status of exceptions, until
all such exceptions have been eliminated.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE MASTER SERVICER AND THE COMPANY.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of Certificateholders, as of the Closing Date and each
Subsequent Cut-off Date, that:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Master
Servicer is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer or the validity
or enforceability of the Mortgage Loans;
(ii) The Master Servicer has the power and authority to
execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Master
Servicer enforceable in accor dance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies;
(iii) The Master Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization,
or registration or declaration, as shall have been obtained or filed,
as the case may be;
(iv) The execution and delivery of this Agreement and
the performance of the transactions contemplated hereby by the Master
Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Master
Servicer or any provision of the certificate of incorporation or bylaws
of the Master Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Master
Servicer is a party or by which the Master Servicer may be bound;
46
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master Servicer threatened, against the
Master Servicer or any of its properties or with respect to this
Agreement which, to the knowledge of the Master Servicer, has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;.
(vi) The information set forth in the Prepayment Charge
Schedule (including the prepayment charge summary attached thereto) is
complete, true and correct in all material respects on the date or
dates when such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms (except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally or the collectibility thereof may be
limited due to acceleration in connection with a foreclosure) under
applicable law;
(vii) The Master Servicer will not waive any Prepayment
Charge unless it is waived in accordance with the standard set forth in
Section 3.01(e); and
(viii) The Master Servicer's computer and other systems
used in servicing mortgage loans will be modified and maintained to
operate in a manner such that at all times, including on and after
January 1, 2000, the Master Servicer can service the Mortgage Loans in
accordance with the terms of this Agreement provided that the Master
Servicer's ability to meet the requirements of this representation may
be limited in circumstances where it relies (after reasonable due
diligence in inquiring into and obtaining reasonable compliance
representations) on third party systems which are incompatible with
those of the Master Servicer on or after January 1, 2000.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder. Upon the discovery by the Seller,
the Master Servicer, the Trustee or the Company of a breach of any of the
representations and warranties relating to the Prepayment Charges set forth in
Section 2.03(vi) or Section 2.03(vii), which materially and adversely affects
the interests of the Holders of the Class P Certificates in any Prepayment
Charge, the party discovering such breach shall give prompt written notice to
the other parties. Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of the
representation or covenant of the Master Servicer set forth in Sections 2.03(vi)
or 2.03(vii) above which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge, the Master
Servicer shall remedy such breach as follows: (a) if the representation made by
the Master Servicer in Section 2.03(vi) above is breached, the Master Servicer
must pay the amount of the scheduled Prepayment Charge, for the benefit of the
holder of the Class P Certificate, by depositing such amount into the
Certificate Account, net of any amount previously collected by the Master
Servicer or paid by the Master Servicer, for the benefit of the Holders of the
Class P Certificates, in respect of such Prepayment Charge; and (b) if any of
the covenants made by the Master Servicer in Section 2.03(vii) above is
breached, the Master Servicer must pay the amount of such waived Prepayment
Charge, for the benefit of the holders of the Class P Certificates, by
depositing such amount into the Certificate Account.
47
(b) The Company hereby represents and warrants to the Trustee
for the benefit of Certificateholders, as of the Closing Date and each
Subsequent Cut-off Date, that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to own its assets and to transact
the business in which it is currently engaged. The Company is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Company or the validity or
enforceability of the Mortgage Loans;
(ii) The Company has the power and authority to execute,
deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) The Company is not required to obtain the consent
of any other Person or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be;
(iv) The execution and delivery of this Agreement and
the performance of the transactions contemplated hereby by the Company
will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Company or any provision
of the certificate of incorporation or bylaws of the Company, or
constitute a material breach of any mortgage, indenture, contract or
other agreement to which the Company is a party or by which the Company
may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Company threatened, against the Company or
any of its properties or with respect to this Agreement which, to the
knowledge of the Company, has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this
Agreement.
Section 2.04. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES.
The Master Servicer, on behalf of and subject to the direction of the Trustee,
shall enforce the representations and warranties and related obligations for
breaches thereof of the Seller pursuant to the Mortgage Loan Purchase Agreement.
Upon the discovery by the Seller, the Master Servicer, the Trustee or the
48
Company of a breach of any of the representations and warranties made in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan, which
materially and adversely affects the interests of the Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. The Master Servicer shall promptly notify the
Seller of such breach and request that, pursuant to the terms of the Mortgage
Loan Purchase Agreement, the Seller either cure such breach in all material
respects or purchase such Mortgage Loan within 90 days from the date the Seller
was notified of such breach, in each instance in accordance with the Mortgage
Loan Purchase Agreement; PROVIDED that the Seller shall, subject to the
conditions set forth in the Mortgage Loan Purchase Agreement, have the option to
substitute a Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and shall be retained by the Master Servicer and remitted
by the Master Servicer to the Seller on the next succeeding Distribution Date.
For the month of substitution, remittance to the Distribution Account pursuant
to this Agreement shall include the Monthly Payment received on a Deleted
Mortgage Loan for such month, and thereafter the Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The Master
Servicer shall amend or cause to be amended the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loans, and the Master Servicer shall promptly
deliver the amended Mortgage Loan Schedule to the Trustee.
In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer shall determine the amount (such amount, a "Substitution Adjustment
Amount"), if any, by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate principal balance of all such Deleted Mortgage Loans together with
accrued and unpaid interest thereon at the related Mortgage Rates (after
application of the principal portion of the Monthly Payments due in the month of
substitution that are to be remitted to the Distribution Account in the month of
substitution). The Seller shall pay the Substitution Adjustment Amount to the
Master Servicer and the Master Servicer shall deposit such Substitution
Adjustment Amount into the Certificate Account upon receipt.
Upon receipt by the Trustee of written notification, signed by
a Servicing Officer, of the deposit of such Repurchase Price or of such
substitution of a Qualified Substitute Mortgage Loan and deposit of any
applicable Substitution Adjustment Amount as provided above, the Trustee on
behalf of the Trust Fund shall release to the Seller the related Mortgage File
for the Mortgage Loan being repurchased or substituted for and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
the Seller or its designee ownership of such Mortgage Loan released pursuant
hereto, and thereafter such Mortgage Loan shall not be an asset of the Trust
Fund.
49
It is understood and agreed that the obligation of the Seller
to cure any breach with respect to or to repurchase or substitute for, any
Mortgage Loan as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the Company, the
Trust Fund or the Certificateholders (or the Trustee on behalf of the
Certificateholders) against the Seller.
Section 2.05. RESERVED.
Section 2.06. ISSUANCE OF CERTIFICATES AND UNCERTIFICATED
REMIC I REGULAR INTERESTS EVIDENCING
INTERESTS IN REMIC I; CONVEYANCE OF
UNCERTIFICATED REMIC I REGULAR INTERESTS.
(a) The Trustee acknowledges the assignment to it of the
Mortgage Loans and the delivery of the Mortgage Files to it, or any Custodian on
its behalf, subject to any exceptions noted in the Initial Certification,
together with the assignment to it of all other assets included in REMIC I,
receipt of which is hereby acknowledged. Concurrently with such assignment and
delivery and in exchange therefor, the Trustee, pursuant to the written request
of the Company executed by an officer of the Company has executed and caused to
be authenticated and delivered to or upon the order of the Company the Class R-I
Certificates in authorized denominations which, together with the Uncertificated
REMIC I Regular Interests, evidence ownership of REMIC I. The rights of the
Class R-I Certificateholders and REMIC II (as holder of the Uncertificated REMIC
I Regular Interests) to receive distributions from the proceeds of REMIC I in
respect of the Class R-I Certificates and the Uncertificated REMIC I Regular
Interests, and all ownership interests of the Class R-I Certificateholders and
REMIC II (as holder of the Uncertificated REMIC I Regular Interests) in such
distributions, are as set forth in this Agreement.
(b) The Company, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign, transfer, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Company in and to the Uncertificated REMIC I Regular Interests
for the benefit of the holders of the Uncertificated REMIC II Regular Interests
and the Class R-II Certificateholders.
Section 2.07. ISSUANCE OF CERTIFICATES AND UNCERTIFICATED
REMIC II REGULAR INTERESTS EVIDENCING
INTERESTS IN REMIC II; CONVEYANCE OF
UNCERTIFICATED REMIC II REGULAR INTERESTS.
(a) The Trustee acknowledges receipt of the Uncertificated
REMIC I Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of all present and future holders of the
Uncertificated REMIC II Regular Interests and the Class R-II Certificateholders.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Company executed by an officer
of the Company has executed and caused to be authenticated and delivered to or
upon the order of the Company the Class R-II Certificates in authorized
denominations which, together with the Uncertificated REMIC II Regular
Interests, evidence ownership of REMIC II. The rights of the Class R-II
Certificateholders and REMIC III (as holder of the Uncertificated REMIC II
Regular Interests) to receive distributions
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from the proceeds of REMIC II in respect of the Class R-II Certificates and the
Uncertificated REMIC II Regular Interests, and all ownership interests of the
Class R-II Certificateholders and REMIC III (as holder of the Uncertificated
REMIC II Regular Interests) in such distributions, are as set forth in this
Agreement.
(b) The Company, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign, transfer, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Company in and to the Uncertificated REMIC II Regular Interests
for the benefit of the REMIC III Certificateholders.
Section 2.08. ISSUANCE OF CERTIFICATES EVIDENCING
INTERESTS IN REMIC III.
The Trustee acknowledges receipt of the Uncertificated REMIC
II Regular Interests and declares that it holds and will hold the same in trust
for the exclusive use and benefit of all present and future holders of the REMIC
III Certificates. Concurrently with such assignment and delivery and in exchange
therefor, the Trustee, pursuant to the written request of the Company executed
by an officer of the Company has executed and caused to be authenticated and
delivered to or upon the order of the Company the REMIC III Certificates in
authorized denominations, which evidence ownership of the entire REMIC III. The
rights of the REMIC III Certificateholders to receive distributions from the
proceeds of REMIC III in respect of the REMIC III Certificates, and all
ownership interests of the REMIC III Certificateholders in such distributions,
are as set forth in this Agreement.
Section 2.09 CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS.
(a) Subject to the conditions set forth in Section 2.1(c) of
the Mortgage Loan Purchase Agreement, in consideration of the Trustee's delivery
on the related Subsequent Transfer Dates, during the Pre-Funding Period, in
accordance with the terms of the related Subsequent Transfer Agreement, of all
or a portion of the balance of funds in the Pre-Funding Account equal to the
Purchase Price of each Subsequent Mortgage Loan, the Company shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey without
recourse to the Trustee but subject to the terms and provisions of this
Agreement all of the right, title and interest of the Company in and to (i) the
Subsequent Mortgage Loans identified on the related Mortgage Loan Schedule
attached to the related Subsequent Transfer Agreement, delivered by the Company
on such Subsequent Transfer Date, (ii) principal received and interest due on
the Subsequent Mortgage Loans after the related Subsequent Cut-off Date and
(iii) all items with respect to such Subsequent Mortgage Loans to be delivered
pursuant to Section 2.01 above; PROVIDED, HOWEVER, that the Company reserves and
retains all right, title and interest in and to principal (including Principal
Prepayments) received and interest due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The transfer to the Trustee by the
Company of the Subsequent Mortgage Loans identified on the related Mortgage Loan
Schedule shall be absolute and is intended by the Company, the Master Servicer,
the Trustee and the Certificateholders to constitute and to be treated as a sale
of the Subsequent Mortgage Loans by the Company to the Trust Fund.
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The "Purchase Price" to be paid by the Trustee from amounts
released from the Pre- Funding Account shall be one-hundred percent (100%) of
the aggregate unpaid principal balances of the Subsequent Mortgage Loans so
transferred as of the close of business on the related Subsequent Transfer
Dates. This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.
(b) Following the transfer to the Trust Fund of the Subsequent
Mortgage Loans and other property and rights related thereto described in
Section 2.09(a) above, the Subsequent Mortgage Loans and all Mortgage Loans and
obligations in the Trust Fund, as a whole, will have the characteristics
described in the Company's Prospectus Supplement, dated September 28, 1999
relating to the Offered Certificates. No transfer of the Subsequent Mortgage
Loans and property and rights related thereto described in Section 2.09(a) above
shall be made to the Trust Fund during the Pre-Funding Period if it would result
in the downgrade of the rating of any Class of Offered Certificates. All
Subsequent Mortgage Loans shall meet the same terms and conditions for
eligibility as those Mortgage Loans transferred to the Trust Fund as of the
Closing Date, which terms and conditions shall have been approved by the Rating
Agencies and which terms and conditions may be changed if such changes receive
prior approval either by a vote of the Certificateholders of at least a majority
of the Offered Certificates or by the Rating Agencies. In order to ensure that
the characteristics of the Subsequent Mortgage Loans are substantially similar
to Mortgage Loans which were acquired as of the Closing Date, the
characteristics of the Subsequent Mortgage Loans will either be monitored by a
credit support provider or other insurance provider which is independent of the
Seller and the Company or an independent accountant retained by the sponsor will
provide the Seller and the Company with a letter (with copies provided to the
Rating Agencies, the underwriters of the Certificates and the Trustee) stating
whether or not the characteristics of the Subsequent Mortgage Loans conform to
the characteristics of such obligations described in the Company's Prospectus,
dated August 10, 1998, and the Prospectus Supplement, dated September 28, 1999,
relating to the Offered Certificates and this Agreement, and, in preparing such
letter, the independent accountant will use the same type of procedures as were
applicable to the Initial Mortgage Loans.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The
Master Servicer shall service and administer the Mortgage Loans, the Prepayment
Charges and any REO Property in accordance with this Agreement and its normal
servicing practices, which generally shall conform to the standards of an
institution prudently servicing mortgage loans similar to the Mortgage Loans for
its own account and shall have full authority to do anything it reasonably deems
appropriate or desirable in connection with such servicing and administration.
The Master Servicer may perform its responsibilities relating to servicing
through other agents or independent contractors, but shall not thereby be
released from any of its responsibilities as hereinafter set forth. The
authority of the Master Servicer, in its capacity as Master Servicer, and any
Subservicer acting on its behalf, shall include, without limitation, the power
to (i) consult with and advise any Subservicer regarding administration of a
related Mortgage Loan, (ii) approve any recommendation by a Subservicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf of the
insured Person thereunder as shall be reasonably necessary to prevent the denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings, the
collection of deficiency judgments, the acceptance of compromise proposals, the
filing of claims under any insurance policy and any other matter pertaining to a
Delinquent Mortgage Loan. The authority of the Master Servicer shall include, in
addition, the power on behalf of the Certificateholders, the Trustee or either
of them to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfer of any related Mortgaged
Property and assumptions of the related Mortgage Loans (in the manner provided
in this Agreement) and (iii) collect any Insurance Proceeds and Liquidation
Proceeds. Without limiting the generality of the foregoing, the Master Servicer
and any Subservicer acting on its behalf may, and is hereby authorized and
empowered by the Trustee to, execute and deliver, on behalf of itself, the
Certificateholders, the Trustee or either of them, any instruments of
satisfaction, cancellation, partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans, any related
insurance policies and the accounts related thereto, and the Mortgaged
Properties. The Master Servicer may exercise this power in its own name or in
the name of a Subservicer.
(b) Notwithstanding the provisions of Subsection 3.01(a), the
Master Servicer shall not take any action adverse to the rights and interests of
the Trustee or the Certificateholders under this Agreement.
(c) The Trustee shall furnish the Master Servicer with any
powers of attorney and other documents in the form provided by it which are
necessary or appropriate to enable the Master Servicer to service and administer
the related Mortgage Loans and REO Property.
(d) Notwithstanding anything in this Agreement to the
contrary, subject to Section 3.06(a), the Master Servicer shall not permit any
modification with respect to any Mortgage Loan that would both constitute a sale
or exchange of such Mortgage Loan within the meaning of Section
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1001 of the Code (and any proposed, temporary or final regulations promulgated
thereunder) and cause either REMIC I, REMIC II or REMIC III to fail to qualify
as a REMIC under the Code.
(e) To the extent consistent with the requirements of Section
3.01, the Master Servicer shall waive in whole or in part (or permit a
subservicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and (ii) either (A) such waiver would, in the reasonable judgment
of the Master Servicer, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related Mortgage Loan and, if such
waiver is made in connection with a refinancing of the related Mortgage Loan,
such refinancing is related to a default or a reasonably foreseeable default or
(B) such waiver is made in connection with a refinancing of the related Mortgage
Loan unrelated to a default or a reasonably foreseeable default where (x) the
related Mortgagor has stated to the Master Servicer or an applicable subservicer
an intention to refinance the related Mortgage Loan and (y) the Master Servicer
has concluded in its reasonable judgment that the waiver of such Prepayment
Charge would induce such Mortgagor to refinance with the Master Servicer. If a
Prepayment Charge is waived as permitted by meeting the standards described in
clauses (i) and (ii)(B) above, then the Master Servicer is required to pay the
amount of such waived Prepayment Charge, for the benefit of the Holders of the
Class P Certificates, by depositing such amount into the Certificate Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Certificate Account. Notwithstanding
any other provisions of this Agreement, any payments made by the Master Servicer
in respect of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B)
shall be deemed to be paid outside of REMIC I.
Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER
SERVICER AND SUBSERVICER.
(a) The Master Servicer may enter into Subservicing Agreements with
Subservicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder. Each Subservicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be 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
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement. Any Subservicing Agreement entered into by the Master Servicer shall
include the provision that such Agreement may be immediately terminated (x) with
cause and without any termination fee by any Master Servicer hereunder or (y)
without cause in which case the Master Servicer but not the Trust Fund shall be
responsible for any termination fee or penalty resulting therefrom. In addition,
each Subservicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements and the pursuit of
other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the
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Master Servicer, in its good faith business judgment, would require were it the
owner of the related Mortgage Loan. 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
Loan or (ii) from a specific recovery of costs, expenses or attorneys' fees from
the party against whom such enforcement is directed.
Section 3.03. SUCCESSOR SUBSERVICERS. The Master Servicer
shall be entitled to terminate any Subservicing Agreement that may exist in
accordance with the terms and conditions of such Subservicing Agreement and
without any limitation by virtue of this Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either assume the duties of the
Subservicer in respect of the related Mortgage Loans or enter into a contract
with a successor Subservicer meeting the requirements of Section 3.02(a),
pursuant to which such successor Subservicer will be bound by all relevant terms
of the related Subservicing Agreement pertaining to the servicing of such
Mortgage Loans; provided, however, that the Master Servicer may not terminate
the Subservicing Agreement with the Special Servicer except for cause.
Section 3.04. LIABILITY OF THE MASTER SERVICER. (a)
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Subservicer or any other agent or independent contractor or reference to
actions taken through a Subservicer or otherwise, the Master Servicer shall
under all circumstances remain obligated and primarily liable to the Trustee and
the Certificateholders for the servicing and administering of the Mortgage Loans
and any REO Property in accordance with this Agreement. The obligations and
liability of the Master Servicer shall not be diminished by virtue of
Subservicing Agreements or by virtue of indemnification of the Master Servicer
by any Subservicer, or any other Person. The obligations and liability of the
Master Servicer shall remain of the same nature and under the same terms and
conditions as if the Master Servicer alone were servicing and administering the
related Mortgage Loans. The Master Servicer shall, however, be entitled to enter
into indemnification agreements with any Subservicer or other Person and nothing
in this Agreement shall be deemed to limit or modify such indemnification. For
the purposes of this Agreement, the Master Servicer shall be deemed to have
received any payment on a Mortgage Loan on the date the Subservicer received
such payment; PROVIDED, HOWEVER, that this sentence shall not apply to the
Trustee acting as the Master Servicer; PROVIDED, FURTHER, however, that the
foregoing provision shall not affect the obligation of the Master Servicer if it
is also the Trustee to advance amounts which are not Nonrecoverable Advances.
(b) Any Subservicing Agreement that may be entered into and
any transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be between the
Subservicer and the Master Servicer alone, and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer
except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING
AGREEMENTS BY TRUSTEE.
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(a) If the Trustee or its designee shall assume the servicing obligations of the
Master Servicer in accordance with Section 7.02 below, the Trustee, to the
extent necessary to permit the Trustee to carry out the provisions of Section
7.02 with respect to the Mortgage Loans, shall succeed to all of the rights and
obligations of the Master Servicer under each of the Subservicing Agreements. In
such event, the Trustee or its designee as the successor Master Servicer shall
be deemed to have assumed all of the Master Servicer's rights and obligations
therein and to have replaced the Master Servicer as a party to such Subservicing
Agreements to the same extent as if such Subservicing Agreements had been
assigned to the Trustee or its designee as a successor Master Servicer, except
that the Trustee or its designee as a successor Master Servicer shall not be
deemed to have assumed any obligations or liabilities of the Master Servicer
arising prior to such assumption (other than the obligation to make any Monthly
Advances) and the Master Servicer shall not thereby be relieved of any liability
or obligations under such Subservicing Agreements arising prior to such
assumption. The Trustee shall be entitled as successor Master Servicer to
receive the servicing compensation provided under Section 3.15, accruing after
its assumption of the servicing, as the Master Servicer would be entitled to
receive.
(b) In the event that the Trustee or its designee as successor
Master Servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 7.02, upon the reasonable request of the Trustee or such
designee as successor Master Servicer, the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents, files and records, electronic or otherwise,
relating to the Subservicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by
the Master Servicer, if any, and will otherwise cooperate and use its reasonable
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements and responsibilities hereunder to the Trustee, or at its written
request to such designee as successor Master Servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The
Master Servicer shall use reasonable efforts to collect or cause to be collected
all payments required under the terms and provisions of the Mortgage Loans and
shall follow collection procedures generally comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans similar to the
Mortgage Loans for their own account to the extent such procedures shall be
consistent with this Agreement. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive or permit to be waived any late payment
charge, Prepayment Charge (subject to the waiver standard set forth in Section
3.01(e)), assumption fee, or any penalty interest or similar charge or fee in
connection with the prepayment of a Mortgage Loan and (ii) suspend or reduce or
permit to be suspended or reduced regular monthly payments for a period of up to
twelve months, or arrange or permit an arrangement with a Mortgagor for a
scheduled liquidation of delinquencies; PROVIDED, HOWEVER, that the Master
Servicer may permit the foregoing only if it believes, in good faith, that such
action or actions will be in the best interest of the Certificateholders. In the
event the Master Servicer shall consent to the deferment of the Due Dates for
payments due on a Mortgage Note, the Master Servicer shall nonetheless make a
Monthly Advance to the same extent as if such installment were due, owing and
delinquent and had not been deferred; PROVIDED, HOWEVER, that the obligation of
the Master Servicer to make a Monthly Advance shall apply only to the extent
that the Master Servicer believes that such Monthly Advance is not a
Nonrecoverable Advance. Consistent with the terms of this Agreement, the Master
Servicer may also waive, modify or vary any term of any
56
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor if in the Master
Servicer's determination such waiver, modification, postponement or indulgence
is not materially adverse to the interests of the Certificateholders; PROVIDED,
HOWEVER, that the Master Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the payment of any
principal or interest (other than in connection with the liquidation of the
related Mortgage Loan or with prepayments to the extent any related
reamortization is not inconsistent with the terms of the Mortgage Loan), or
extend the final maturity date of such Mortgage Loan, unless such Mortgage Loan
is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable.
(b) The Master Servicer shall establish a segregated account
in the name of the Trustee (the "Certificate Account"), which shall be an
Eligible Account, in which the Master Servicer shall deposit or cause to be
deposited any amounts representing interest payments due and principal
collections received by it subsequent to the related Cut-off Date (other than in
respect of the payments referred to in the following paragraph), within one
Business Day of receipt of good funds in respect thereof, including the
following payments and collections received or made by it (without duplication):
(i) the aggregate Repurchase Price of the Mortgage
Loans purchased pursuant to Section 3.18;
(ii) Insurance Proceeds and Net Liquidation Proceeds;
(iii) the aggregate Repurchase Price of any Mortgage
Loans repurchased by the Seller pursuant to the Mortgage Loan Purchase
Agreement, and all Substitution Adjustment Amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement;
(iv) amounts required to be paid pursuant to Section
3.10 in respect of a blanket insurance policy deductible, Section 10.02 in
respect of indemnification of the Trust Fund or Section 9.01 in respect of the
Termination Price;
(v) any Monthly Advances and any Compensating
Interest payments;
(vi) any amounts required to be deposited pursuant to
Section 3.20 in connection with any REO Property; and
(vii) all Prepayment Charges collected by the Master
Servicer in connection with the Principal Prepayment of any of the Mortgage
Loans and any Master Servicer Prepayment Charge Payment Amount.
PROVIDED, HOWEVER, that with respect to each Due Period, the Master Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans the Servicing Fee for such Due Period. The foregoing requirements
respecting deposits into the Certificate Account are exclusive,
57
it being understood that, without limiting the generality of the foregoing, the
Master Servicer need not deposit in the Certificate Account assumption and
modification fees or late charges payable by Mortgagors, or Foreclosure Profits,
each as further described in Section 3.15, or amounts received by the Master
Servicer for the accounts of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items. In the event any
amount not required to be deposited in the Certificate Account is so deposited,
the Master Servicer may at any time (prior to being terminated under this
Agreement) withdraw such amount from the Certificate Account, any provision
herein to the contrary notwithstanding. The Master Servicer shall keep records
that accurately reflect the funds on deposit in the Certificate Account that
have been identified by it as being attributable to the Mortgage Loans and shall
hold all collections in the Certificate Account for the benefit of the Trustee
and the Certificateholders, as their interests may appear.
Any interest or investment earnings on funds held in the
Certificate Account shall be for the account of the Master Servicer and may only
be withdrawn from the Certificate Account by the Master Servicer immediately
following its monthly remittance of the amount required to be remitted pursuant
to Section 4.01 to the Trustee. Any reference herein to amounts on deposit in
the Certificate Account shall refer to amounts net of such interest or
investment earnings.
Section 3.07 WITHDRAWALS FROM THE CERTIFICATE ACCOUNT. (a) The
Master Servicer shall, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts on deposit therein pursuant to Section
3.06 for the following purposes (without duplication):
(i) to deposit in the Distribution Account, by the
Determination Date prior to each Distribution Date, the amount required
to be distributed pursuant to Section 4.01 for such Distribution Date;
(ii) to pay to itself out of each payment received on
account of interest on a Mortgage Loan as contemplated by Section 3.15,
an amount equal to the related Servicing Fee (to the extent not
retained pursuant to Section 3.06);
(iii) to pay to itself, the Seller or other entity
entitled thereto, with respect to any Mortgage Loan or REO Property
that has been purchased or otherwise transferred to the Seller, the
Master Servicer or such other entity, all amounts received thereon and
not required to be distributed to Certificateholders as of the date on
which the related Repurchase Price is determined;
(iv) to reimburse the Master Servicer for any Monthly
Advance or Servicing Advance of its own funds, the right of the Master
Servicer to reimbursement pursuant to this subclause (iv) being limited
to amounts received on a particular Mortgage Loan (including, for this
purpose, the Repurchase Price therefor and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest
on such Mortgage Loan respecting which such Monthly Advance or
Servicing Advance was made;
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(v) to reimburse the Master Servicer for any
Nonrecoverable Advance previously made, and not reimbursed pursuant to
Subsection 3.07(a)(iv);
(vi) to pay to itself interest or investment earnings
in respect of Eligible Investments or on funds deposited in the
Certificate Account;
(vii) to pay to the Person entitled thereto any
amounts reimbursable from the Trust Fund pursuant to Section 6.03 or
8.05;
(viii) to withdraw any other amount deposited in the
Certificate Account that was not required to be deposited therein
pursuant to Section 3.06; and
(ix) to clear and terminate the Certificate Account
pursuant to Section 9.01.
In connection with withdrawals pursuant to clauses (ii), (iii) and (iv), the
Master Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan, and 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 Certificate Account pursuant to
such clauses.
(b) So long as no Event of Default shall have occurred and be
continuing, and consistent with any requirements of the Code, the funds held in
the Certificate Account may be invested by the Master Servicer (to the extent
practicable) in Eligible Investments, as directed in writing to the Trustee by
the Master Servicer. Funds in the Certificate Account must be available for
withdrawal without penalty, and any Eligible Investments must mature not later
than the Business Day immediately preceding the Determination Date next
following the date of such investment (except that if any of such Eligible
Investments is an obligation of the institution that maintains the related
Certificate Account, then such Eligible Investments shall mature not later than
such Determination Date) and shall not be sold or disposed of prior to its
maturity. All Eligible Investments in which funds in the related Certificate
Account are invested must be held by or registered in the name of the Trustee in
trust for the Certificateholders. All interest or other earnings from funds on
deposit in the related Certificate Account (or any Eligible Investments thereof)
shall be the exclusive property of the Master Servicer, and may be withdrawn
from the related Certificate Account pursuant to clause (vi) above and the last
paragraph of Section 3.06(b) above. The amount of any net losses incurred in
connection with the investment of funds in the Certificate Account in Eligible
Investments shall be deposited in the related Certificate Account by the Master
Servicer from its own funds immediately as realized without reimbursement
therefor.
Section 3.08. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; SERVICING ACCOUNTS.
(a) The Master Servicer shall establish and maintain one or
more Servicing Accounts. The Master Servicer will deposit and retain therein all
collections from the Mortgagors for the payment of taxes, assessments, insurance
premiums or comparable items.
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(b) The deposits in the Servicing Accounts shall be held in
trust by the Master Servicer (and its successors and assigns) in the name of the
Trustee. Such Servicing Accounts shall be Eligible Accounts and if permitted by
applicable law, invested in Eligible Investments held in trust by the Master
Servicer as described above and maturing, or subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn, and in no event later than 45 days after the date of investment.
Withdrawals of amounts from the Servicing Accounts may be made only to effect
timely payment of taxes, assessments, insurance premiums or comparable items, to
reimburse the Master Servicer for any Servicing Advances made with respect to
such items, to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required, to Mortgagors on balances in the
Servicing Accounts or to clear and terminate the Servicing Accounts at or any
time after the termination of this Agreement. Any advances of such payments
shall constitute Servicing Advances.
Section 3.09 RESERVED.
Section 3.10 MORTGAGE IMPAIRMENT INSURANCE. In the event that
the Master Servicer shall obtain and maintain a blanket policy insuring against
fire and hazards of extended coverage on all of the Mortgage Loans, then, to the
extent such policy names the Master Servicer as loss payee and provides coverage
in an amount equal to the aggregate unpaid principal balance on the related
Mortgage Loans without co-insurance, and otherwise complies with the
requirements of Section 3.11 below, the Master Servicer shall be deemed
conclusively to have satisfied its obligations with respect to fire and hazard
insurance coverage under Section 3.11 below, it being understood and agreed that
such blanket 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 a policy complying with Section 3.11 below, and there
shall have been a loss which would have been covered by such policy, deposit in
the Certificate Account without reimbursement therefor, the difference, if any,
between the amount that would have been payable under a policy complying with
Section 3.11 below and the amount paid under such blanket policy.
Section 3.11 MAINTENANCE OF HAZARD INSURANCE AND FIDELITY
COVERAGE. (a) The Master Servicer shall maintain, or cause each Subservicer to
maintain, with respect to each Mortgage Loan and each REO Property, in full
force and effect hazard insurance (fire insurance with extended coverage) equal
to the least of the principal balance of the Mortgage Loan, the current
replacement cost of the Mortgaged Property and the full insurable value of the
Mortgaged Property, and containing a standard mortgagee clause, PROVIDED,
HOWEVER, that the amount of hazard insurance may not be less than the amount
necessary to prevent loss due to the application of any co-insurance provision
of the related policy.
(b) All policies required hereunder shall be endorsed with
standard mortgagee clauses with losses payable to the Master Servicer. Any
amounts collected by the Master Servicer or a Subservicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or repair
of the Mortgaged Property or amounts released to the Mortgagor in accordance
with the Master Servicer's or a Subservicer's normal servicing procedures, the
Mortgage Note, the Mortgage or applicable law) shall be deposited into the
Certificate Account, for transmittal to the Distribution Account, subject to
withdrawal pursuant to Section 3.07.
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(c) Any cost incurred by a Master Servicer in maintaining any
such hazard insurance policy shall not be added to the amount owing under the
Mortgage Loan for the purpose of calculating monthly distributions to
Certificateholders, notwithstanding that the terms of the Mortgage Loan so
permit. Such costs shall constitute Servicing Advances and shall be recoverable
by the Master Servicer in accordance with Section 3.07.
(d) No earthquake or other additional insurance shall be
required of any Mortgagor or maintained on REO Property other than pursuant to
such applicable laws and regulations as shall at any time be in force and
require such additional insurance. If, at the time of origination of the
Mortgage Loan or at any subsequent time, the Mortgaged Property or REO Property
is located in a federally designated special flood hazard area, the Master
Servicer shall use reasonable efforts to cause flood insurance (to the extent
available and in accordance with mortgage servicing industry practice) to be
maintained thereon. Such flood insurance shall be in an amount equal to the
lesser of (i) the principal balance of the related Mortgage Loan and (ii) the
minimum amount required under the terms of coverage to compensate for any damage
or loss on a replacement cost basis, but not more than the maximum amount of
such insurance available for the related Mortgaged Property or REO Property
under either the regular or emergency programs of the National Flood Insurance
Program (assuming that the area in which such Mortgaged Property or REO Property
is located is participating in such program).
(e) If insurance has not been maintained and should have been
maintained in accordance with the limitations set forth in Subsections 3.11 (a)
and (d), and there shall have been a loss which would have been covered by such
insurance had it been maintained, the Master Servicer shall pay for any
resulting loss without reimbursement therefor.
(f) The Master Servicer shall present, or cause the related
Subservicer to present, claims under any related hazard insurance or flood
insurance policy.
(g) The Master Servicer shall obtain and maintain at its own
expense and for the duration of this Agreement a blanket fidelity bond and
errors and omissions insurance policy acceptable to FNMA or FHLMC covering such
Master Servicer's officers, employees and other persons acting on its behalf in
connection with its activities under this Agreement. The Master Servicer shall
promptly notify the Trustee of any material change in the terms of such bond or
policy. Upon the request of the Trustee, the Master Servicer shall provide to
the Trustee a certified true copy of such fidelity bond and insurance policy. If
any such bond or policy ceases to be in effect, the Master Servicer shall, to
the extent possible, give the Trustee ten days' notice prior to any such
cessation and shall use reasonable efforts to obtain a comparable replacement
bond or policy, as the case may be.
Section 3.12 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a)
If the Master Servicer receives notice that a Mortgaged Property relating to a
Mortgage Loan has been or is about to be conveyed by the Mortgagor, the Master
Servicer shall enforce any due-on-sale clause contained in the related Mortgage
to the extent permitted under the terms of the related Mortgage Note and by
applicable law. If the Master Servicer reasonably believes that such due-on-sale
clause cannot be enforced under applicable law or if the Mortgage Loan does not
contain a due-on-sale clause, the
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Master Servicer is authorized to consent to a conveyance subject to the lien of
the Mortgage, and to take or enter into an assumption agreement from or with the
Person to whom such property has been or is about to be conveyed, pursuant to
which such Person becomes liable under the related Mortgage Note and unless
prohibited by applicable law, such Mortgagor remains liable thereon. In
connection with any such assumption, no material term of the related Mortgage
Note may be changed. The Master Servicer shall notify the Trustee, whenever
practicable, before the completion of such assumption agreement, and shall
forward to the Trustee the original of such assumption agreement, which shall be
added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee or
additional interest collected by the Master Servicer for consenting to any such
conveyance or entering into any such assumption agreement may be retained by the
Master Servicer as additional servicing compensation.
(b) 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 any conveyance by the
Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan
which the Master Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever or if the exercise of such right would
impair or threaten to impair any recovery under any applicable insurance policy.
Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a)
The Master Servicer shall foreclose upon or otherwise comparably convert the
ownership of properties securing any Mortgage Loans that come into and continue
in default and as to which the Master Servicer has decided in its good faith
judgment that such action is in the best interest of the Trust Fund, except that
the Master Servicer shall not foreclose upon or otherwise comparably convert a
Mortgaged Property if there is evidence of toxic waste or other environmental
hazards thereon, unless the Master Servicer follows the procedures in Subsection
3.13(c) below. In connection with such foreclosure or other conversion, the
Master Servicer shall use reasonable efforts to preserve REO Property and to
realize upon defaulted Mortgage Loans in such a manner as to maximize the
receipt of principal and interest by the Certificateholders, taking into
account, among other things, the timing of foreclosure and the considerations
set forth in Subsection 3.13(b). The foregoing is subject to the proviso that
the Master Servicer shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration of any property unless it
determines in good faith (i) that such restoration or foreclosure will increase
Net Liquidation Proceeds, and (ii) that such expenses will constitute Servicing
Advances and will be recoverable to it pursuant to Section 3.07. The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; PROVIDED, HOWEVER, that it shall be entitled to receive
Foreclosure Profits as additional servicing compensation.
(b) The Trust Fund shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or imminent default of a Mortgage Loan. In the event that the Trust Fund
acquires any real property (or personal property incident to such real property)
in connection with a default or imminent default of a Mortgage Loan, such
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property shall be disposed of by the Trustee on behalf of the Trust Fund in
accordance with Section 3.20.
(c) With respect to any Mortgage Loan as to which the Master
Servicer has received notice of, or has actual knowledge of, the presence of any
toxic or hazardous substance on the Mortgaged Property, the Master Servicer
shall promptly notify the Trustee and shall act in accordance with any
directions provided by the Trustee. Notwithstanding the preceding sentence of
this Section 3.13(c), with respect to any Mortgage Loan described by such
sentence, the Master Servicer shall, if requested by the Trustee, obtain and
deliver to the Trustee an environmental audit report prepared by a Person who
regularly conducts environmental audits using customary industry standards. The
Master Servicer shall be entitled to reimbursement for such report pursuant to
Section 3.07. If the Trustee has not provided directions to the Master Servicer
in connection with any such Mortgage Loan within 30 days of a request by the
Master Servicer for such directions and instructions, then the Master Servicer
shall take such action as it deems to be in the best economic interest of the
Trust Fund, including the release of such Mortgaged Property from the lien of
the related Mortgage. The parties hereto acknowledge that the Master Servicer
shall not acquire possession of or title to, or commence any proceedings to
acquire possession of or title to, or take any other action with respect to, any
Mortgaged Property, if the Trustee could reasonably be considered to be a
responsible party for any liability arising from the presence of any toxic or
hazardous substance on the Mortgaged Property, unless the Trustee has been
indemnified to its reasonable satisfaction against such liability.
Section 3.14 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon payment in full of any Mortgage Loan or the receipt by the Master
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer will immediately notify the
Trustee by a certification signed by 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 Certificate Account have been or will be so deposited) and shall request
delivery to the Master Servicer of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer and execute and deliver to the Master
Servicer, without recourse, the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of
the Mortgage (furnished by the Master Servicer), together with the Mortgage Note
with written evidence of cancellation thereon.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under an insurance policy, the
Master Servicer may deliver to the Trustee a Request for Release signed by a
Servicing Officer on behalf of the Master Servicer in substantially the form
attached as Exhibit D hereto. Upon receipt of the Request for Release, the
Trustee shall deliver the Mortgage File or any document therein to the Master
Servicer as bailee for the Trustee.
(c) The Master Servicer shall cause each Mortgage File or any
document therein released pursuant to Subsection 3.14(b) to be returned to the
Trustee when the need therefor no longer exists, unless the Mortgage Loan has
become a Liquidated Mortgage Loan and the Net
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Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Certificate Account. Prior to return of a Mortgage File or any document to the
Trustee, the Master Servicer shall retain such file or document in its
constructive control as bailee for the Trustee. If a Mortgage Loan becomes a
Liquidated Mortgage Loan, the Trustee shall deliver the Request for Release with
respect thereto to the Master Servicer upon deposit of the related Net
Liquidation Proceeds in the Certificate Account.
(d) The Trustee shall execute and deliver to the Master
Servicer any court pleadings, requests for trustee's sale or other documents
presented to it by the Master Servicer necessary to (i) the foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or Mortgage
or otherwise available at law or equity. Together with such documents or
pleadings, the Master Servicer shall deliver to the Trustee a certificate of a
Servicing Officer in which it requests the Trustee to execute the pleadings or
documents.
Section 3.15 SERVICING COMPENSATION. (a) As compensation for
its activities hereunder, each of the Master Servicer and any Special Servicer
shall be entitled to receive the related Servicing Fee with respect to each
Mortgage Loan it services.
(b) The Master Servicer may retain additional servicing
compensation in the form of tax service fees, fees for statement of account or
payoff, late payment charges, bad check charges, assumption fees, modification
fees or any other servicing-related fees (other than Prepayment Charges), to the
extent such fees are collected from the related Mortgagors, and Foreclosure
Profits. The Master Servicer shall be required to pay all expenses it incurs in
connection with its servicing activities under this Agreement and shall not be
entitled in connection with its servicing activities under this Agreement to
reimbursement except as provided in this Agreement.
Section 3.16 ANNUAL STATEMENTS OF COMPLIANCE. Within 120 days
after December 31 of each year, commencing in December 1999, the Master Servicer
at its own expense shall deliver to the Trustee, with a copy to the Rating
Agencies, an Officer's Certificate stating, as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the most recently
completed calendar year and of its performance under this Agreement has been
made under such officer's supervision, (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof including the steps being taken
by the Master Servicer to remedy such default.
Section 3.17 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT. (a) Within 120 days after December 31 of each year, commencing in
December 1999, 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 mortgage loan servicing
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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 calendar 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 a Subservicer,
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 year of such report) with respect to such
Subservicer. Immediately upon receipt of such report, the Master Servicer shall
furnish a copy of such report to the Trustee and the Rating Agencies.
Section 3.18. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
The Master Servicer may repurchase any Mortgage Loan that is 90 days or more
Delinquent for a price equal to the Repurchase Price. The Repurchase Price for
any Mortgage Loan purchased hereunder shall be deposited by the Master Servicer
in the Certificate Account and the Trustee, upon receipt of a Request for
Release and confirmation of such deposit from the Master Servicer in the form of
Exhibit D, shall release or cause to be released to the Master Servicer or its
designee, the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer or its
designee, in each case without recourse, representation or warranty, as shall be
necessary to vest in the Master Servicer or its designee ownership of such
Mortgage Loan released pursuant hereto.
Section 3.19. INFORMATION REQUIRED BY THE INTERNAL REVENUE
SERVICE GENERALLY AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED
PROPERTY. The Master Servicer shall prepare and deliver all federal and state
information reports when and as required by Section 6050J (reports of
foreclosures and abandonments), Section 6050H (reports relating to mortgage
interest received) and Section 6050P of the Code (reports relating to
cancellation of indebtedness).
Section 3.20. 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, on behalf of the
Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property before the close of the third taxable year
following the year 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, more than 60 days before the day on which the three-year grace period
would otherwise expire an extension of the grace period, unless the Master
Servicer shall have delivered to the Trustee an Opinion of Counsel, addressed to
the Trustee and the Company, which Opinion of Counsel shall not be at the
expense of the Trust Fund or the Trustee, to the effect that the holding by
REMIC I of such REO Property subsequent to such period after its acquisition
will not result in the imposition on REMIC I, REMIC II or REMIC III of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC under federal
tax 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
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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 REMIC I, REMIC II or REMIC III 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
Certificate Account to serve as the REO Account, subject to separate ledgers or
subaccounts for each REO Property. The Master Servicer shall be entitled to
retain or withdraw any interest income paid on funds deposited or Eligible
Investments 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, on a daily basis in the REO 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, 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 reasonable good faith judgment, the
payment of such amounts will be recoverable from the rental or sale of the REO
Property.
Notwithstanding the foregoing, the Master Servicer shall not:
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(i) permit 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) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement thereon,
and then only if more than 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) allow 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, which Opinion of Counsel shall not be at the expense of the Trust Fund
or Trustee, 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 REMIC
I, 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
3.20(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.
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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.
(d) In addition to the withdrawals permitted under Section
3.20(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself for unreimbursed
Servicing Advances and Monthly Advances made in respect of such REO Property or
the related Mortgage Loan. On the Determination Date, the Master Servicer shall
withdraw from each REO Account maintained by it and deposit into the Certificate
Account in accordance with Section 3.06(b)(vi), 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 3.20(c) or this Section 3.20(d).
(e) Subject to the time constraints set forth in Section
3.20(a), 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. Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Closing Date allow a sale for other
consideration).
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. DISTRIBUTION ACCOUNT; INVESTMENT OF
ACCOUNTS.
(a) The Trustee shall establish and maintain a segregated
account in its name (the "Distribution Account"), which shall be an Eligible
Account, into which the Master Servicer shall deposit on or before each
Determination Date by wire transfer of immediately available funds an amount
equal to the sum of the Interest Remittance Amount and Principal Remittance
Amount for the immediately succeeding Distribution Date and any Prepayment
Charges or Master Servicer Prepayment Charge Payment Amount.
(b) The Trustee shall, upon written request from the Master
Servicer, invest or cause the institution maintaining the Accounts to invest
amounts in the Accounts in Eligible Investments designated in the name of the
Trustee, which shall mature not later than the Business Day next preceding the
Distribution Date next following the date of such investment (except that (i)
any investment in the institution with which the Distribution Account is
maintained may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Accounts in the amount payable on such investment on
such Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer. The amount of any net losses incurred in respect
of any such investments shall be deposited in the related Account by the Master
Servicer.
Section 4.02. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee shall make, subject
to available funds, the distributions described below, to each Certificateholder
of record on the next preceding Record Date (other than as provided in Section
9.01 respecting the final distribution) either in immediately available funds
(by wire transfer or otherwise) to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder has so notified the Master Servicer or the Trustee, as the
case may be, or, if such Certificateholder has not so notified the Master
Servicer or the Trustee by the Record Date, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register. Each Certificateholder's share of the distributions described below
shall be based on the aggregate of the Percentage Interests represented by
Certificates of the applicable Class held by such Holder.
(b)(1)(A) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the Uncertificated REMIC I Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class R-I
Certificates, as the case may be:
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(i) to the Holders of Uncertificated REMIC I Regular
Interests (other than Uncertificated REMIC I Regular Interest
I-LTP), in an amount equal to (A) the Uncertificated Interest
for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates.
Amounts payable as Uncertificated Interest in respect of
Uncertificated REMIC I Regular Interest I-LT6 shall be reduced
when the REMIC I Overcollateralization Amount is less than the
REMIC I Required Overcollateralization Amount, by the lesser
of (x) the amount of such difference and (y) the Maximum I-LT6
Uncertificated Interest Deferral Amount; and
(ii) on each Distribution Date, to the Holders of
Uncertificated REMIC I Regular Interests, in an amount equal
to the remainder of the Available Distribution Amount for such
Distribution Date after the distributions made pursuant to
clause (i) above, allocated as follows (except as provided
below):
(a) to the Holders of the Uncertificated
REMIC I Regular Interest I- LTP, on the Distribution
Date immediately following the expiration of the
latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date
thereafter until $100 has been distributed pursuant
to this clause;
(b) to the Holders of Uncertificated REMIC I
Regular Interest I-LT1, 98.00% of the amount
remaining after application of clause (a), until the
Uncertificated Principal Balance of such
Uncertificated REMIC I Regular Interest is reduced to
zero and any remaining amount to the Holders of the
Class R-I Certificates;
(c) to the Holders of Uncertificated REMIC I
Regular Interest I-LT2, Uncertificated REMIC I
Regular Interest I-LT3, Uncertificated REMIC I
Regular Interest I-LT4 and Uncertificated REMIC I
Regular Interest I-LT5, 1.00% of the amount remaining
after application of clause (a), in the same
proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated
Principal Balances of such Uncertificated REMIC I
Regular Interests are reduced to zero and any
remaining amount to the Holders of the Class R-I
Certificates; and
(d) to the Holders of Uncertificated REMIC I
Regular Interest I-LT6, 1.00% of the amount remaining
after application of clause (a), until the
Uncertificated Principal Balance of such
Uncertificated REMIC I Regular Interest is reduced to
zero and any remaining amount to the Holders of the
Class R-I Certificates;
provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to a Overcollateralization Reduction Amount shall be allocated to
Holders of Uncertificated REMIC I Regular Interest I-LT1 and Uncertificated
REMIC I Regular Interest I-LT6, respectively.
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(B) On each Distribution Date, the following amounts shall be
distributed by REMIC II to REMIC III on account of the Uncertificated REMIC II
Regular Interests:
(i) any amounts paid as either Uncertificated Interest
paid or accrued to the Uncertificated REMIC I Regular
Interests (other than Uncertificated REMIC I Regular Interest
I-LTP) shall be deemed to have been paid to the related
Uncertificated Corresponding Component in REMIC II in
accordance with the Uncertificated REMIC II Pass-Through Rates
and any amounts deferred on Uncertificated REMIC I Regular
Interest I-LT6 pursuant to Section 4.02(b)(1)(A) shall be
deemed to have been deferred with respect to Uncertificated
REMIC II Regular Interest II-LT6; and
(ii) any amounts paid as principal on the Uncertificated
REMIC I Regular Interests shall be deemed to have been paid to
the related Uncertificated Corresponding Component in REMIC II
in accordance with the same priorities and conditions.
(2) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account and, if necessary, in the case of the first
Distribution Date, the Capitalized Interest Account, an amount equal to the
Interest Remittance Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:
(i) first, to the Holders of the Class A Certificates,
an amount equal to the Accrued Certificate Interest thereon
for such Distribution Date, plus any Unpaid Interest Shortfall
thereon;
(ii) second, from the balance, if any, remaining of the
Interest Remittance Amount after the distributions described
in clause (i) above, to the Holders of the Class M-1
Certificates, an amount equal to the Accrued Certificate
Interest thereon for such Distribution Date;
(iii) third, from the balance, if any, remaining of the
Interest Remittance Amount after the distributions described
in clauses (i) and (ii) above, to the Holders of the Class M-2
Certificates, an amount equal to the Accrued Certificate
Interest thereon for such Distribution Date;
(iv) fourth, from the balance, if any, remaining of the
Interest Remittance Amount after the distributions described
in clauses (i) through (iii) above, to the Holders of the
Class M-3 Certificates, an amount equal to the Accrued
Certificate Interest thereon for such Distribution Date; and
(v) fifth, the balance as provided in clause (4) below.
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(3) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the Principal Distribution Amount
and distribute to the Certificateholders the following amounts, in the following
order of priority:
(i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the
Principal Distribution Amount shall be distributed in the
following order of priority;
FIRST, to the Holders of the Class A Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero;
SECOND, to the Holders of the Class M-1 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero;
THIRD, to the Holders of the Class M-2 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero; and
FOURTH, to the Holders of the Class M-3 Certificates,
until the Certificate Principal Balance of such Class
has been reduced to zero.
(ii) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a Trigger Event is not in
effect, the Principal Distribution Amount shall be distributed
in the following order of priority;
FIRST, to the holders of the Class A Certificates,
until the Certificate Principal Balance of the Class
A Certificates has been reduced to zero, an amount
equal to the excess, if any, of (x) the Certificate
Principal Balance of the Class A Certificates
immediately prior to such Distribution Date over (y)
the lesser of (a) the product of (1) 54.00% and (2)
the Pool Principal Balance as of the last day of the
related Due Period and (b) the Pool Principal Balance
as of the last day of the related Due Period MINUS
$1,875,000;
SECOND, from the balance, if any, remaining of the
Principal Distribution Amount after the distribution
described in clause FIRST above, to the holders of
the Class M-1 Certificates, until the Certificate
Principal Balance of the Class M-1 Certificates has
been reduced to zero, an amount equal to the excess,
if any, of (x) the sum of (a) the Certificate
Principal Balance of the Class A Certificates (after
taking into account the distribution pursuant to
clause FIRST above on such Distribution Date) and (b)
the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution
Date over (y) the lesser of (a) the product of (1)
69.50% and (2) the Pool Principal Balance as of the
last day of the related Due Period and (b) the Pool
Principal Balance as of the last day of the related
Due Period MINUS $1,875,000;
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THIRD, from the balance, if any, remaining of the
Principal Distribution Amount after the distributions
described in clauses FIRST and SECOND above, to the
holders of the Class M-2 Certificates, until the
Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero, an amount
equal to the excess, if any, of (x) the sum of (a)
the aggregate Certificate Principal Balances of the
Class A Certificates and the Class M-1 Certificates
(after taking into account distributions pursuant to
clauses FIRST and SECOND above on such Distribution
Date) and (b) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (a) the
product of (1) 80.50% and (2) the Pool Principal
Balance as of the last day of the related Due Period
and (b) the Pool Principal Balance as of the last day
of the related Due Period MINUS $1,875,000;
FOURTH, from the balance, if any, remaining of the
Principal Distribution Amount after the distributions
described in clauses FIRST through THIRD above, to
the holders of the Class M-3 Certificates, until the
Certificate Principal Balance of the Class M-3
Certificates has been reduced to zero, an amount
equal to the excess, if any, of (x) the sum of (a)
the aggregate Certificate Principal Balances of the
Class A Certificates, the Class M-1 Certificates and
the Class M-2 Certificates (after taking into account
distributions pursuant to clauses FIRST through THIRD
above on such Distribution Date) and (b) the
Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution
Date over (y) the lesser of (a) the product of (1)
89.00% and (2) the Pool Principal Balance as of the
last day of the related Due Period and (b) the Pool
Principal Balance as of the last day of the related
Due Period MINUS $1,875,000;
FIFTH, if an Overcollateralization Reduction Lockout
Event is in effect, from the balance, if any,
remaining of the Principal Distribution Amount after
the distributions described in clauses FIRST through
FOURTH above, concurrently on a PRO RATA basis to the
holders of the Class A Certificates and the Class M
Certificates, until the Certificate Principal
Balances thereof have been reduced to zero.
(4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:
(i) first, to pay to the Holders of the Class or
Classes of Certificates then entitled to receive
distributions in respect of principal, an amount
equal to the principal portion of any Realized Losses
incurred or deemed to have incurred on the Mortgage
Loans in the related Due Period, applied to reduce
the Certificate Principal Balance of such
Certificates until the aggregate Certificate
Principal Balance of such Certificates is reduced to
zero (which amount will be paid as part of the
Principal Remittance Amount);
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(ii) second, to fund the Extra Principal Distribution
Amount for such Distribution Date to be paid to the
Holders of the Offered Certificates in the manner and
priority set forth in Section 4.02(b)(3)(i) or
Section 4.02(b)(3)(ii) above;
(iii) third, to pay any Unpaid Interest Shortfalls on
the Class M-1 Certificates until such Unpaid Interest
Shortfall is reduced to zero;
(iv) fourth, to pay any Unpaid Interest Shortfalls on
the Class M-2 Certificates until such Unpaid Interest
Shortfall is reduced to zero;
(v) fifth, to pay any Unpaid Interest Shortfalls on
the Class M-3 Certificates until such Unpaid Interest
Shortfall is reduced to zero;
(vi) sixth, to pay to the Holders of the Class A
Certificates, in an amount equal to such
Certificates, allocated share of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 4.10) and any shortfalls
resulting from application of the Relief Act
allocated to such Certificates;
(vii) seventh, to pay to the Holders of the Class M-1
Certificates, in an amount equal to such
Certificates, allocated share of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 4.10) and any shortfalls
resulting from application of the Relief Act
allocated to such Certificates;
(viii) eighth, to pay to the Holders of the Class M-2
Certificates, in an amount equal to such
Certificates, allocated share of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 4.10) and any shortfalls
resulting from application of the Relief Act
allocated to such Certificates;
(ix) ninth, to pay to the Holders of the Class M-3
Certificates, in an amount equal to such
Certificates, allocated share of any Prepayment
Interest Shortfalls (to the extent not covered by
payments pursuant to Section 4.10) and any shortfalls
resulting from application of the Relief Act
allocated to such Certificates;
(x) tenth, to the Holders of the Class CE
Certificates, the related Accrued Certificate
Interest and any Overcollateralization Reduction
Amount for such Distribution Date; and
(xi) eleventh, to the Holders of the Class R-III
Certificates, any remaining amounts; provided that if
such Distribution Date is the Distribution Date
immediately following the expiration of the latest
Prepayment Charge term
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as identified on the Mortgage Loan Schedule or any
Distribution Date thereafter, then any such remaining
amounts will be distributed FIRST, to the Holders of
the Class P Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
and SECOND, to the Holders of the Class R- III
Certificates.
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans or any Master Servicer Prepayment Charge
Payment Amount and shall distribute such amounts to the Holders of the Class P
Certificates. Such distributions shall not be applied to reduce the Certificate
Principal Balance of the Class P Certificates.
(d) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting 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. None of the Trustee, the
Certificate Registrar, the Company or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(e) Except as otherwise provided in Section 9.01, if the
Master Servicer anticipates that a final distribution with respect to any Class
of Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month. In the event that
Certificateholders required to surrender their Certificates pursuant to Section
9.01(c) do not surrender their Certificates for final cancellation, the Trustee
shall cause funds distributable with respect to such Certificates to be
withdrawn from the Distribution Account and credited to a separate escrow
account for the benefit of such Certificateholders as provided in Section
9.01(d).
(f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Class M Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.05 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 4.02 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Principal Balance of an Uncertificated REMIC I Regular Interest
be reduced more than once in respect of any particular amount both (a) allocated
to such Uncertificated REMIC I Regular Interest in respect of Realized Losses
pursuant to Section
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4.05 and (b) distributed on such Uncertificated REMIC I Regular Interest in
reduction of the Uncertificated Principal Balance thereof pursuant to this
Section 4.02.
Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.
(a) No later than 12:00 noon (Illinois time) on each
Determination Date, the Master Servicer shall deliver to the Trustee a computer
tape (or such other report in a form and format mutually agreeable to the Master
Servicer and the Trustee) containing the information set forth in Exhibit C-1
hereto as to each Mortgage Loan as of the end of the preceding Due Period and
such other information as the Trustee shall reasonably require. On each
Distribution Date, the Trustee shall forward by telecopy to the Master Servicer,
the Company and the Underwriter and mail to each Holder, a statement setting
forth the following information (based on the information contained on the
computer tape) as to each Class of Certificates to the extent applicable:
(i) (a) the amount of such distribution to the
Certificateholders of such Class applied to reduce the Certificate
Principal Balance thereof, (b) the aggregate amount included therein
representing Principal Prepayments and (c) the amount of the
distribution made on such Distribution Date to the Holders of the Class
P Certificates allocable to Prepayment Charges ;
(ii) the amount of such distribution to Holders of
such Class of Certificates allocable to interest;
(iii) if the distribution to the Holders of such Class
of Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds available
therefor, the amount of the shortfall;
(iv) the number and Pool Principal Balance of the
Mortgage Loans and any REO Properties after giving effect to the
distribution of principal on such Distribution Date;
(v) the aggregate Certificate Principal Balance of
each Class of Certificates, after giving effect to the amounts
distributed on such Distribution Date, separately identifying any
reduction thereof due to Realized Losses other than pursuant to an
actual distribution of principal;
(vi) the number and aggregate principal balances of
Mortgage Loans that are, as of the last day of the preceding calendar
month, Delinquent (A) one month, (B) two months and (C) three or more
months and the number and aggregate principal balance of Mortgage Loans
that are in foreclosure;
(vii) the number and aggregate principal balance of
any REO Properties;
(viii) the aggregate Unpaid Interest Shortfall
remaining unpaid, if any, for each Class of Certificates, after giving
effect to the distribution made on such Distribution Date;
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(ix) the Required Overcollateralization Amount and
Overcollateralization Amount, after giving effect to distributions made
on such Distribution Date;
(x) the Extra Principal Distribution Amount, if any,
for such Distribution Date;
(xi) the Overcollateralization Reduction Amount, if
any, for such Distribution Date;
(xii) the Credit Enhancement Percentage for such
Distribution Date;
(xiii) the aggregate amount of Realized Losses for
such Distribution Date and the aggregate amount of Realized Losses on
the Mortgage Loans incurred since the Cut-off Date;
(xiv) the weighted average remaining term to maturity
of the Mortgage Loans after giving effect to the amounts distributed on
such Distribution Date;
(xv) the weighted average Net Mortgage Rates of the
Mortgage Loans after giving effect to the amounts distributed on such
Distribution Date;
(xvi) the respective Pass-Through Rates applicable to
the Class A Certificates, the Class M Certificates and the Class CE
Certificates for such Distribution Date and the Pass-Through Rate
applicable to the Class A Certificates and the Class M Certificates for
the immediately succeeding Distribution Date;
(xvii) whether a Trigger Event, Overcollateralization
Reduction Lockout Event or a Servicer Termination Event has occurred;
(xviii) the Servicing Fee for the related Due Period;
and
(xix) the aggregate amount of Monthly Advances for
such Distribution Date.
In the case of information furnished pursuant to clauses (i) and (ii) above, the
amounts shall be expressed as a dollar amount per Certificate with a $1,000
denomination.
The determination by the Master Servicer of the amounts set
forth in the Master Servicer's computer tape shall, in the absence of obvious
error, be presumptively deemed to be correct for all purposes hereunder and the
Trustee shall be protected in relying upon the same without any independent
verification.
(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 the Holder of a Certificate, other than a Class R
Certificate, a statement containing the information set forth in clauses (i) and
(ii) of subsection (a) above aggregated for such calendar year or applicable
portion
77
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 pursuant
to any requirements of the Code as are in force from time to time.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was the Holder of a Class R Certificate, a statement
containing the applicable distribution information provided pursuant to this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class R Certificate. 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 pursuant to any requirements of the Code as are in force from time to
time.
(d) The Trustee shall furnish to each Certificateholder during
the term of this Agreement, such periodic, special or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable or appropriate with respect to the Certificateholder, or otherwise
with respect to the purposes of this Agreement, all such reports or information
to be provided by and in accordance with such applicable instructions and
directions (if requested in writing) as the Certificateholder, may reasonably
require; PROVIDED that the Master Servicer (to the extent that the Trustee in
connection with the foregoing has requested from the Master Servicer information
not generally produced) and the Trustee shall be entitled to be reimbursed by
such Certificateholder, for their respective fees and actual expenses associated
with providing such reports, if such reports are not generally produced in the
ordinary course of their respective businesses or readily obtainable.
(e) Reports and computer tapes furnished by the Master
Servicer pursuant to this Agreement shall be deemed confidential and of a
proprietary nature, and shall not be copied or distributed except to (i) the
extent provided in this Agreement or required by law, (ii) the Rating Agencies
or the Company, (iii) the extent the Seller instructs the Trustee in writing to
furnish information regarding the Trust Fund or the Mortgage Loans to
third-party information providers. No Person entitled to receive copies of such
reports or tapes or lists of Certificateholders shall use the information
therein for the purpose of soliciting the customers of the Seller or for any
other purpose except as set forth in this Agreement.
Section 4.04. RESERVED.
Section 4.05. ALLOCATION OF REALIZED LOSSES.
(a) Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Due Period. The amount of each Realized Loss
shall be included in the report to the Trustee provided pursuant to Section
4.03(a).
(b) All Realized Losses on the Mortgage Loans allocated to any
Uncertificated REMIC II Regular Interest pursuant to Section 4.05(c) on the
Mortgage Loans shall be allocated by
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the Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and fifth, to the Class M-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero. All
Realized Losses to be allocated to the Certificate Principal Balances of all
Classes on any Distribution Date shall be so allocated after the actual
distributions to be made on such date as provided above. All references above to
the Certificate Principal Balance of any Class of Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, after reductions in respect of actual distributions on such
date but before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Class M Certificate on
any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(b)(4)(x). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.
As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among two or more specified Classes of Certificates means an
allocation on a PRO RATA basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
(c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following
Uncertificated REMIC I Regular Interests in the specified percentages, as
follows: first, to Uncertificated Interest payable to Uncertificated REMIC I
Regular Interest I-LT1 and Uncertificated REMIC I Regular Interest I-LT6 up to
an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98%
and 2%, respectively; second, to the Uncertificated Principal Balances of
Uncertificated REMIC I Regular Interest I-LT1 and Uncertificated REMIC I Regular
Interest I-LT6 up to an aggregate amount equal to the REMIC I Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of Uncertificated REMIC I Regular Interest I-LT1,
Uncertificated REMIC I Regular Interest I-LT5 and Uncertificated REMIC I Regular
Interest I-LT6, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of Uncertificated REMIC I Regular Interest I-LT5 has been reduced to
zero; fourth to the Uncertificated Principal Balances of Uncertificated REMIC I
Regular Interest I-LT1, Uncertificated REMIC I Regular Interest I-LT4 and
Uncertificated REMIC I Regular Interest I-LT6, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of Uncertificated REMIC I Regular
Interest I-LT4 has been reduced to zero; fifth to the Uncertificated Principal
Balances of Uncertificated REMIC I Regular Interest I-LT1, Uncertificated REMIC
I Regular Interest I-LT3 and Uncertificated REMIC I Regular Interest I-LT6, 98%,
1% and 1%,
79
respectively, until the Uncertificated Principal Balance of Uncertificated REMIC
I Regular Interest I-LT3 has been reduced to zero.
(d) All Realized Losses on the Uncertificated REMIC II Regular
Interests shall be allocated by the Trustee on each Distribution Date among the
Uncertificated REMIC II Regular Interests in the proportion that Realized Losses
are allocated to the related Uncertificated Corresponding Component.
As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among the Uncertificated REMIC I Regular Interests (other than
Uncertificated REMIC I Regular Interest I- LTP) means an allocation on a PRO
RATA basis among the Uncertificated REMIC I Regular Interests (other than
Uncertificated REMIC I Regular Interest I-LTP) on the basis of their then
outstanding Uncertificated Principal Balances, in each case prior to giving
effect to distributions to be made on such Distribution Date.
Section 4.06. 1934 ACT REPORTS.
The Trustee shall prepare or cause to be prepared for filing
and file with the Securities and Exchange Commission (the "Commission"), with a
copy to the Company, any and all reports, statements and information respecting
the Trust Fund and/or the Certificates required to be filed (other than the
current information on Form 8-K to be filed in connection with computational
materials and the initial Current Report on Form 8-K to be filed by the Company
in connection with the issuance of the Certificates). Such reports shall
include, but are not necessarily limited to, the following (which are subject to
any changes in procedures required by the Commission): (i) within 15 days after
each Distribution Date, the Trustee shall file with the Commission a Form 8-K
with a copy of the statement to Certificateholders for such Distribution Date as
an exhibit thereto, (ii) within 15 days of each Subsequent Transfer Date, the
Trustee shall file with the Commission a Form 8-K with a copy of the Subsequent
Transfer Agreement, (iii) not later than March 30 of the first year commencing
after the date of the initial issuance of the Certificates, and each March 30
thereafter if such reporting obligation has not been suspended, the Trustee
shall file a Form 10-K in substance conforming to industry standard reporting
protocols permitted by the Commission for similar securities (or otherwise in
accordance with instructions provided by the Company), and (iv) not later than
January 30 of the first year for which the Company's reporting obligations have
been automatically suspended (which shall not be earlier than the first year
commencing after the date of the initial issuance of the Certificates) the
Trustee shall file a Form 15D, notifying the Commission of such suspension with
respect to the Trust Fund. The Company hereby grants to the Trustee a limited
power of attorney to execute and file each such report on behalf of the Company.
Such power of attorney shall continue until the earlier of (i) receipt by the
Trustee from the Company of written termination of such power of attorney and
(ii) the termination of the Trust Fund. Fees and expenses incurred by the
Trustee in connection with the foregoing shall be paid by the Trustee in
connection with the foregoing from the Trustee's fees and shall not be paid by
the Trust Fund. The Company, the Master Servicer and the Seller hereby agree to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within their possession related to
this Agreement and the Mortgage Loans as the Trustee reasonably requires to
prepare and file all necessary reports with the Commission.
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Section 4.07. RESERVED.
Section 4.08. RESERVED.
Section 4.09 MONTHLY ADVANCES.
If any Monthly Payment on a Mortgage Loan that was due on the
immediately preceding Due Date and delinquent on the Determination Date is
delinquent other than as a result of application of the Relief Act or Debt
Service Reduction, the Master Servicer on such Determination Date will deposit
in the Certificate Account an amount equal to the interest portion (net of the
Servicing Fee) of the scheduled Monthly Payment for such Mortgage Loan, except
to the extent the Master Servicer determines any such advance to be a
Nonrecoverable Advance. Subject to the foregoing and in the absence of such a
determination, the Master Servicer shall continue to make such advances through
the date that the related Mortgage Loan has, in the judgment of the Master
Servicer, become a Liquidated Mortgage Loan. If applicable, prior to each
Determination Date, the Master Servicer shall deliver an Officer's Certificate
to the Trustee stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount because it would be a Nonrecoverable Advance or that
a Monthly Advance previously made has become a Nonrecoverable Advance. In lieu
of making all or a portion of such Monthly Advance from its own funds, the
Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Certificate Account that any amount held in the Certificate
Account and not required for distribution on the immediately succeeding
Distribution Date has been used by the Master Servicer in discharge of its
obligation to make any such Monthly Advance and (ii) transfer such funds from
the Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Determination
Date immediately preceding the Distribution Date on which such funds are
required to be distributed pursuant to Section 4.01.
Section 4.10 COMPENSATING INTEREST PAYMENTS.
The Master Servicer shall deposit in the Certificate Account
not later than the Determination Date an amount equal to the Compensating
Interest related to such Determination Date. The Master Servicer shall not be
entitled to any reimbursement of any Compensating Interest payment.
Section 4.11 PRE-FUNDING ACCOUNT.
(a) No later than the Closing Date, the Trustee shall
establish a segregated trust account that is an Eligible Account, which shall be
titled, "Pre-Funding Account, Bank One, National Association, as trustee for the
registered holders of Mortgage Pass-Through Certificates, Series 1999-A". The
Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account and
retain therein the Original Pre-Funded Amount remitted on the Closing Date to
the Trustee by the Company. Prior to end of the Pre-Funding Period, the
Pre-Funding Account will be part of the Trust Fund.
81
(b) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee,
pursuant to the related Subsequent Transfer Agreement, shall
withdraw from the Pre-Funding Account an amount equal to the
Purchase Price for each Subsequent Mortgage Loan transferred
and assigned to the Trustee on such Subsequent Transfer Date
and pay such amount to the Seller upon satisfaction of the
conditions with respect to such transfer and assignment set
forth in Section 2.09 above;
(ii) Prior to each Distribution Date, the Trustee shall
withdraw the amount of any reinvestment income on funds in the
Pre-Funding Account and deposit such amount in the Capitalized
Interest Account;
(iii) The Trustee shall withdraw any amount not required
to be deposited in the Pre-Funding Account or deposited
therein in error; and
(iv) The Trustee shall clear and terminate the
Pre-Funding Account upon the earliest to occur of (A) the
Distribution Date following the end of the Pre- Funding
Period, (B) the termination of this Agreement and (C) the
termination of the Trust Fund, with any amounts remaining on
deposit therein being deposited into the Distribution Account
for payment to the Class A-1 Certificateholders on the
Distribution Date following the end of the Pre-Funding Period
pursuant to Section 4.02(b)(3)(i) or 4.02(b)(3)(ii).
Amounts on deposit in the Pre-Funding Account shall be
invested by the Trustee in Eligible Investments. All interest and any other
investment earnings on amounts on deposit in the Pre-Funding Account shall be
deposited in the Capitalized Interest Account prior to each Distribution Date.
The Pre-Funding Account will not be an asset of any REMIC and, solely for
Federal income tax purposes, will be treated as owned by the Seller.
Section 4.12 CAPITALIZED INTEREST ACCOUNT.
No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account, which shall be an
Eligible Account, titled "Capitalized Interest Account, Bank One, National
Association, as trustee for the registered holders of Mortgage Pass- Through
Certificates, Series 1999-A". The Trustee shall, promptly upon receipt, deposit
in the Capitalized Interest Account and retain therein the Capitalized Interest
Amount remitted on the Closing Date to the Trustee by the Company. Funds
deposited in the Capitalized Interest Account shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth herein.
On the Distribution Date occurring in November 1999, the Trustee shall withdraw
from the Capitalized Interest Account an amount equal to (i) 30 days' interest
on the Original Pre-Funded Amount calculated at an annual rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans in the Trust
Fund as of the commencement of the related Due Period, minus (ii) the sum of (1)
any interest payments received by the Master Servicer on Subsequent Mortgage
Loans
82
during the related Due Period and (2) any Monthly Advance in respect of the
interest portion of delinquent Monthly Payments on the Subsequent Mortgage Loans
conveyed to the Trustee during the related Due Period and distribute such amount
pursuant to Section 4.02(b)(2) as a component of the Interest Remittance Amount
for such Distribution Date. Any amounts remaining in the Capitalized Interest
Account on the Distribution Date following the end of the Pre-Funding Period
will be paid to the Seller and will not thereafter be available for distribution
pursuant to Section 4.02. Amounts on deposit in the Capitalized Interest Account
will be invested in Eligible Investments. The Capitalized Interest Account will
not be an asset of any REMIC and, solely for Federal income tax purposes, will
be treated as owned by the Seller.
Section 4.13 RESERVED.
Section 4.14. COMPLIANCE WITH WITHHOLDING.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
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ARTICLE V
THE CERTIFICATES
Section 5.01. THE CERTIFICATES.
(a) The Class A Certificates, the Class M Certificates, the
Class CE Certificates, the Class P Certificates and the Class R Certificates
shall be substantially in the forms set forth in Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇ and
B and shall, on original issue, be executed and delivered by the Trustee to the
Certificate Registrar for authentication and delivery to or upon the order of
the Company upon receipt by the Trustee of the documents specified in Section
2.01. The Class A Certificates and the Class M Certificates shall be initially
evidenced by one or more certificates representing a fraction of the initial
Certificate Principal Balance for each Class and shall be issuable in minimum
dollar denominations of $10,000 and integral multiples of $1 in excess thereof.
The Class P Certificates shall be initially evidenced by one more certificates
representing a fraction of the initial Certificate Principal Balance of such
Class and shall be issuable in minimum dollar denominations of $20 and integral
multiples thereof. The Class CE Certificates shall be initially evidenced by one
or more certificates representing a fraction of the initial Certificate
Principal Balance of such Class and shall be issuable in minimum dollar
denominations of $10,000 and integral multiples of $1 in excess thereof;
provided, however, that one Class CE Certificate may be issued having the
remainder of the initial Certificate Principal Balance of such Class or to an
otherwise authorized denomination for such Class plus such remainder. The Class
R Certificates shall be issuable in minimum percentage interests of 20% and
integral multiples of 0.01% in excess thereof; PROVIDED, HOWEVER, that one Class
R-I Certificate, one Class R-II Certificate and one Class R-III Certificate may
be issued to the Trustee as "tax matters person" pursuant to Section 10.01(c) in
a minimum denomination representing a Percentage Interest of not less than
0.01%.
The Certificates shall be executed by manual or facsimile
signature on behalf of an authorized officer of the Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Certificate Registrar by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Class A Certificates and Class M Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each of such Certificates, through the book-entry
facilities of the Depository and, except
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as provided below, shall not be entitled to Definitive Certificates in respect
of such Ownership Interests. All transfers by Certificate Owners of their
respective Ownership Interests in the Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owner. Each Depository Participant
shall transfer the Ownership Interests only in the Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
The Trustee, the Master Servicer and the Company may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Trustee determines that the Depository is no
longer willing or able to properly discharge its responsibilities as Depository
and (B) the Trustee is unable to locate a qualified successor or (ii) the
Trustee elects to terminate the book-entry system through the Depository, or
(iii) after the occurrence of an Event of Default the Holders of the Book-Entry
Certificates having Percentage Interests aggregating at least a majority of the
Certificate Principal Balance of such Book-Entry Certificates advise the
Depository in writing that the continuation of a book-entry system through the
Depository (or a successor thereto) is no longer in the best interests of the
Holders of the Book-Entry Certificates, the Trustee shall notify all Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Neither the Company, the Master Servicer nor the Trustee shall be liable for any
actions taken by the Depository or its nominee, including, without limitation,
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Company in connection with the issuance of the Definitive
Certificates pursuant to this Section 5.01 shall be deemed to be imposed upon
and performed by the Trustee, and the Trustee and the Master Servicer shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
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Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided. The Trustee is initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. The Certificate Registrar, or the Trustee, shall provide the
Master Servicer with a certified list of Certificateholders as of each Record
Date prior to the related Determination Date.
(b) Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12 and, in the case of any Class R Certificate, upon
satisfaction of the conditions set forth below, the Trustee shall execute and
the Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of a like
Class and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of a like Class
and aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class
CE, Class P or Class R Certificate shall be made unless such transfer, sale,
pledge or other 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 said Act. Except as otherwise
provided in this Section 5.02(d), in the event that a transfer of a Class CE,
Class P or Class R Certificate is to be made either (i)(A) the Trustee shall
require a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act or is being made pursuant to said Act, which Opinion of
Counsel shall not be an expense of the Trustee, the Company or the Master
Servicer; provided that such Opinion of Counsel will not be required in
connection with the initial transfer of any such Certificate by the Company or
any Affiliate thereof to an Affiliate of the Company and (B) the Trustee shall
require the transferee to execute a representation letter, substantially in the
form of Exhibit G-1 hereto, and the Trustee shall require the transferor to
execute a representation letter, substantially in the form of Exhibit H hereto,
each acceptable to and in form and substance satisfactory to the Company and the
Trustee certifying to the Company and the Trustee the facts surrounding such
transfer, which representation letters shall not be an expense of the Trustee,
the Company or the Master Servicer; provided, however, that such representation
letters will not be required in connection with any
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transfer of any such Certificate by the Company or any Affiliate thereof to an
Affiliate of the Company, and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be written
representation) from the Company of the status, of such transferee as an
Affiliate of the Company or (ii) the prospective transferee of such a
Certificate shall be required to provide the Trustee, the Company and the Master
Servicer with an investment letter substantially in the form of Exhibit G-1
attached hereto, which investment letter shall not be an expense of the Trustee,
the Company, or the Master Servicer, and which investment letter states that,
among other things, such transferee (A) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (B) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the 1933 Act provided by Rule 144A. The Holder of any such
Class CE, Class P or Class R Certificate desiring to effect any such transfer,
sale, pledge or other disposition shall, and does hereby agree to, indemnify the
Trustee, the Company, the Master Servicer and the Certificate Registrar against
any liability that may result if the transfer, sale, pledge or other disposition
is not so exempt or is not made in accordance with such federal and state laws
and this Agreement.
(e) Notwithstanding the provisions of Section 5.06, transfers
of Class M Certificates in the form of Definitive Certificates, as well as
transfers of Class CE, Class P or Class R Certificates to a Plan, to a trustee
or other person acting on behalf of any Plan, or to any other person using the
assets of any Plan will not be registered by the Trustee unless the transferee
provides the Company, the Trustee and the Master Servicer with an opinion of
counsel satisfactory to the Company, the Trustee and the Master Servicer, which
opinion will not be at the expense of the Company, the Trustee or the Master
Servicer, that the purchase of such Certificates by or on behalf of such Plan is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Company, the Trustee or the Master Servicer to any obligation in
addition to those undertaken in this Agreement. In lieu of such opinion of
counsel, the transferee may provide a certification substantially to the effect
that the purchase of Class M Certificates, Class CE Certificates, Class P
Certificates or Class R Certificates by or on behalf of such Plan is permissible
under applicable law will not subject the Company, the Trustee or the Master
Servicer to any obligation in addition to those undertaken in this Agreement,
and the following statements are correct: (i) the transferee is an insurance
company and the source of funds used to purchase such Class M Certificates,
Class CE Certificates, Class P Certificates or Class R Certificates is an
"insurance company general account" (as such term is defined in ▇▇▇▇ ▇▇-▇▇),
(▇▇) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied and (iii) there is no Plan with respect to which the amount of such
general accounts 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 exceed 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 Class M Certificates, Class CE Certificates, Class P
Certificates or Class R Certificates.
(f) (i) 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 authorized the Trustee or its
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designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Class R Certificate are expressly subject
to the following provisions:
(A) 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.
(B) In connection with any proposed Transfer
of any Ownership Interest in a Class R Certificate, the
Trustee shall require delivery to it, and shall not register
the Transfer of any Class R Certificate until its receipt of,
(I) an affidavit and agreement (a "Transfer Affidavit and
Agreement," in the form attached hereto as Exhibit F-1) from
the proposed Transferee, in form and substance satisfactory to
the Master Servicer, representing and warranting, among other
things, that it is a Permitted Transferee, 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, that for so long as it retains its Ownership
Interest in a Class R Certificate, it will endeavor to remain
a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(f) and agrees to be bound by
them, and (II) a certificate, in the form attached hereto as
Exhibit F-2, from the Holder wishing to transfer the Class R
Certificate, in form and substance satisfactory to the Master
Servicer, representing and warranting, among other things,
that no purpose of the proposed Transfer is to impede the
assessment or collection of tax.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee
under clause (B) above, if a Responsible Officer of the
Trustee who is assigned to this Agreement has actual knowledge
that the proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in a Class R Certificate to
such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any
Ownership Interest in a Class R Certificate shall agree (x) to
require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership
Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the
Trustee in the form attached hereto as Exhibit F-2.
(E) Each Person holding or acquiring an
Ownership Interest in a Class R Certificate, by purchasing an
Ownership Interest in such Certificate, agrees to give the
Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulation
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or is
holding
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an Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee will register the Transfer of any
Class R Certificate only if it shall have received the Transfer
Affidavit and Agreement, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit F-2 and all of such
other documents as shall have been reasonably required by the Trustee
as a condition to such registration. Transfers of the Class R
Certificates to Non-United States Persons and Disqualified
Organizations (as defined in Section 860E(e)(5) of the Code) are
prohibited.
(iii) (A) If any Disqualified Organization shall
become a holder of a Class R Certificate, then the last preceding
Permitted Transferee shall be restored, to the extent permitted by law,
to all rights and obligations as Holder thereof retroactive to the date
of registration of such Transfer of such Class R Certificate. If a
Non-United States Person shall become a holder of a Class R
Certificate, then the last preceding United States Person shall be
restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such
Transfer of such Class R Certificate. If a transfer of a Class R
Certificate is disregarded pursuant to the provisions of Treasury
Regulation Section 1.860E-1 or Section 1.860G-3, then the last
preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such 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 5.02(f) or for making any payments
due on such Certificate to the holder thereof or for taking any other
action with respect to such holder under the provisions of this
Agreement.
(B) If any purported Transferee shall become
a Holder of a Class R Certificate in violation of the
restrictions in this Section 5.02(f) and to the extent that
the retroactive restoration of the rights of the Holder of
such Class R Certificate as described in clause (iii)(A) above
shall be invalid, illegal or unenforceable, then the Master
Servicer shall have the right, without notice to the holder or
any prior holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Master
Servicer on such terms as the Master Servicer may choose. Such
purported Transferee shall promptly endorse and deliver each
Class R Certificate in accordance with the instructions of the
Master Servicer. Such purchaser may be the Master Servicer
itself or any Affiliate of the Master Servicer. The proceeds
of such sale, net of the commissions (which may include
commissions payable to the Master Servicer or its Affiliates),
expenses and taxes due, if any, will be remitted by the Master
Servicer to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Master Servicer, and
the Master Servicer 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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(iv) The Master Servicer, on behalf of the Trustee,
shall make available, upon written request from the Trustee, all
information necessary to compute any tax imposed (A) as a result of the
Transfer of an Ownership Interest in a Class R Certificate to any
Person who is a Disqualified Organization, including the information
regarding "excess inclusions" of such Class R Certificates required to
be provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Class R Certificate having as
among its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information
may be required by the Master Servicer from such Person.
(v) The provisions of this Section 5.02(f) set forth
prior to this clause (v) may be modified, added to or eliminated,
provided that there shall have been delivered to the Trustee the
following:
(A) written notification from each Rating
Agency to the effect that the modification, addition to or
elimination of such provisions will not cause such Rating
Agency to downgrade its then-current ratings, if any, of any
Class of the Class A Certificates or Class M Certificates
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
(B) subject to Section 10.01(f), a
certificate of the Master Servicer stating that the Master
Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect
that such modification, addition to or absence of such
provisions will not cause REMIC I, REMIC II or REMIC III to
cease to qualify as a REMIC and will not cause (x) the Trust
Fund to be subject to an entity-level tax caused by the
Transfer of any Class R Certificate to a Person that is a
Disqualified Organization or (y) a Certificateholder or
another Person to be subject to a REMIC-related tax caused by
the Transfer of a Class R Certificate to a Person that is not
a Permitted Transferee.
(g) No service charge shall be made for any transfer or
exchange of Certificates of any Class, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of
Certificates.
(h) All Certificates surrendered for transfer and exchange
shall be destroyed by the Certificate Registrar.
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Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee 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 and the Certificate Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor, Class and Percentage
Interest but bearing a number not contemporaneously outstanding. Upon the
issuance of any new Certificate under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04. PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of
transfer, the Company, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
and neither the Company, the Master Servicer, the Trustee, the Certificate
Registrar nor any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary except as
provided in Section 5.02(f).
Section 5.05. APPOINTMENT OF PAYING AGENT.
The Trustee may appoint a Paying Agent for the purpose of
making distributions to the Certificateholders pursuant to Section 4.02. In the
event of any such appointment, on or prior to each Distribution Date the Master
Servicer on behalf of the Trustee shall deposit or cause to be deposited with
the Paying Agent a sum sufficient to make the payments to the Certificateholders
in the amounts and in the manner provided for in Section 4.02, such sum to be
held in trust for the benefit of the Certificateholders.
The Trustee shall cause each Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that such Paying Agent will hold all sums held by it for the payment
to the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. Any
sums so held by such Paying Agent shall be held only in Eligible Accounts to the
extent such sums are not distributed to the Certificateholders on the date of
receipt by such Paying Agent.
Section 5.06. ERISA DEEMED REPRESENTATION.
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Any purchaser of a Class M Certificate (or interest therein)
not issued or transferred as a Definitive Certificate will be deemed to have
represented by such purchase that either (a) such purchaser is not a Plan and is
not purchasing such Certificate (or interest therein) on behalf of, or with
assets of, any Plan or (b) the purchase of any such Certificate (or interest
therein) by or on behalf of, or with Plan assets of, any Plan is permissible
under applicable law, will not result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Company, the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in this Agreement.
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ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. RESPECTIVE LIABILITIES OF THE COMPANY AND
THE MASTER SERVICER.
The Company and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by the Company and the Master Servicer
herein. By way of illustration and not limitation, the Company is not liable for
the servicing and administration of the Mortgage Loans, nor is it obligated by
Sections 7.01 or 10.01 to assume any obligations of the Master Servicer or to
appoint a designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 6.02. MERGER OR CONSOLIDATION OF THE COMPANY OR
THE MASTER SERVICER.
(a) The Company and the Master Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation, and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Company or the Master Servicer
may be merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, such successor must satisfy the requirements of
Section 7.02 herein.
Section 6.03. LIMITATION ON LIABILITY OF THE COMPANY, THE
MASTER SERVICER AND OTHERS.
Neither the Company, the Master Servicer nor any of the
directors, officers, employees or agents of the Company or the Master Servicer
shall be under any liability to the Trust Fund, the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement; PROVIDED, HOWEVER, that this
provision shall not protect the Company, the Master Servicer or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Company, the Master Servicer and any director, officer, employee
or agent of the Company or 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 Company, the Master Servicer and
any director, officer, employee or agent of the Company or the
93
Master Servicer shall be indemnified by the Trust Fund and held harmless against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, including any amount paid to the
Trustee pursuant to Section 8.05, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder.
Neither the Company nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; PROVIDED, HOWEVER, that the
Company or the Master Servicer may in its discretion undertake any such action,
proceeding, hearing or examination that it may deem necessary or desirable in
respect of this Agreement or the Mortgage Loans, 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 Fund, and the Company and the Master Servicer shall be entitled to be
reimbursed therefor. The Master Servicer's and the Company's right to indemnity
or reimbursement pursuant to this Section 6.03 shall survive any resignation or
termination of the Master Servicer or the Company 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 to
such resignation or termination) out of amounts attributable to the Mortgage
Loans on deposit in the Certificate Account as provided by Section 3.07.
Section 6.04. COMPANY AND MASTER SERVICER NOT TO RESIGN.
Subject to the provisions of Section 6.02, neither the Master
Servicer nor the Company shall resign from its respective 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
which cannot be cured without unreasonable cost, as evidenced by an Opinion of
Counsel to such effect delivered to the Trustee or (ii) with respect to the
Master Servicer, upon satisfaction of the following conditions: (a) the Master
Servicer has proposed a successor servicer to the Trustee in writing and such
proposed successor servicer is, in the reasonable judgment of the Trustee,
acceptable; and (b) each Rating Agency shall have confirmed in writing that the
proposed appointment of such successor servicer as Master Servicer hereunder
will not result in the qualification, reduction or withdrawal of the then
current rating of the Certificates; PROVIDED, HOWEVER, that no such resignation
by the Master Servicer shall become effective until such successor 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 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.
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Section 6.05. APPOINTMENT OF SPECIAL SERVICER.
The Master Servicer has entered into a Subservicing Agreement
with the Special Servicer that includes the following terms: (i) on or after any
Distribution Date on which the Special Servicer Delinquency Test is met, the
servicing of all Mortgage Loans that are then, or which become, 60 days
Delinquent shall be transferred to the Special Servicer within 30 days (but no
sooner than 30 days following notice to the Special Servicer that the Special
Servicer Delinquency Test has been met); (ii) the fees of the Special Servicer
shall be paid pursuant to the terms of the Subservicing Agreement between the
Master Servicer and the Special Servicer; (iii) the Special Servicer shall
service the Mortgage Loans transferred for servicing to it in accordance with
the terms of this Agreement; provided, the Special Servicer will not be
responsible for making any Monthly Advances or Servicing Advances, except to the
extent set forth in such Subservicing Agreement; (iv) upon the occurrence and
continuance of an Event of Default under this Agreement and termination of the
Master Servicer as master servicer, the Trustee may terminate the Special
Servicer without the payment of any termination fee or other amounts to the
Special Servicer, or assume the rights and obligations of the Master Servicer
under the Subservicing Agreement; and (v) upon the occurrence and continuance of
an Event of Default by the Master Servicer under the Subservicing Agreement of
which a Responsible Officer of the Trustee has received written notice, the
rights and obligations of the Special Servicer and the Master Servicer to
service the Mortgage Loans shall terminate, and the Trustee shall assume the
Master Servicer's duties under this Agreement or appoint a successor Master
Servicer for all the Mortgage Loans in accordance with Section 7.01. The
appointment of any Special Servicer is subject to approval from the Rating
Agencies.
The Trustee, the Master Servicer, the Company and each
Certificateholder hereby agree to the foregoing terms.
The Trustee shall compute the Special Servicer Delinquency
Test monthly based upon the information contained within the computer tape it
receives from the Master Servicer pursuant to Section 4.03(a). The Trustee may
conclusively rely upon the contents of such computer tape without independent
verification. If such computation confirms that the Special Servicer Delinquency
Test has been met, the Trustee shall notify the Master Servicer and the Special
Servicer on or promptly following the Distribution Date for which the computer
tape was delivered.
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ARTICLE VII
DEFAULT
Section 7.01. EVENTS OF DEFAULT.
Event of Default, wherever used herein, means the occurrence
and continuance of any one of the following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or Distribution Account any deposit required to be
made under the terms of this Agreement, including any Monthly Advances
and Compensating Interest, which failure continues unremedied for a
period of five Business Days after the date upon which written notice
of such failure shall have been given to the Master Servicer by the
Trustee, or to the Master Servicer and the Trustee by
Certificateholders holding Certificates evidencing at least 25% of the
aggregate Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of its covenants
or agreements of the Master Servicer set forth in this Agreement, which
failure, in each case, materially and adversely affects the interests
of Certificateholders and which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring
the same to be remedied and stating that such notice is a notice of
default, shall have been given to the Master Servicer by the Trustee,
or to the Master Servicer and the Trustee by Certificateholders holding
Certificates evidencing at least 25% of the aggregate Voting Rights; or
(iii) the entry against the Master Servicer of a decree or
order of 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 for a period of 90
consecutive days; or
(iv) the Master Servicer shall commence a voluntary case in
bankruptcy, consent to the appointment of a conservator, receiver,
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 the Master Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(v) so long as the Seller is the Master Servicer and subject
to the limitations set forth in the Mortgage Loan Purchase Agreement,
any failure of the Seller to repurchase or
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substitute Qualified Substitute Mortgage Loans for Deleted Mortgage
Loans as required pursuant to the Mortgage Loan Purchase Agreement and
this Agreement; or
(vi) a Servicer Termination Event has occurred and is
continuing.
So long as an Event of Default shall not have been remedied by the Master
Servicer, either the Trustee or the holders of at least 51% of the aggregate
Voting Rights, by notice then given in writing to the Master Servicer (and to
the Trustee, as applicable) may, by notice to the Master Servicer, terminate all
of the rights and obligations of the Master Servicer as servicer under this
Agreement other than the Master Servicer's right to receive servicing
compensation and reimbursement for expenses for servicing the Mortgage Loans
hereunder during any period prior to the date of such termination and the
Trustee may exercise any and all other remedies available at law or equity. Any
such notice to the Master Servicer shall also be given to each Rating Agency. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement shall pass to
and be vested in the Trustee, and, without limitation, the Trustee 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 in effecting the termination of the responsibilities and rights of the
Master Servicer hereunder, including, without limitation, the transfer to the
Trustee for the administration by it of all cash amounts relating to the
Mortgage Loans that shall at the time be held by the Master Servicer and
required to be deposited by it in the Certificate Account, or that have been
deposited by the Master Servicer in the Certificate Account or thereafter
received by the Master Servicer with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive all
amounts payable to the Master Servicer hereunder the entitlement to which arose
prior to the termination of its activities hereunder. No termination of the
Master Servicer shall affect any obligation of the Seller.
Notwithstanding the foregoing, a delay in or failure of
performance under Section 7.01(i) or Section 7.01(ii) after the applicable grace
periods specified in such Sections shall not constitute an Event of Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve the Master
Servicer from using reasonable efforts to perform its respective obligations in
a timely manner in accordance with the terms of this Agreement and the Master
Servicer shall provide the Trustee and the Certificateholders with notice of
such failure or delay by it, together with a description of its efforts to so
perform its obligations. The Master Servicer shall immediately notify the
Trustee in writing of any Event of Default.
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) On
and after the time the Master Servicer receives a notice of termination pursuant
to Section 7.01 or sends a notice
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pursuant to Section 6.04, the Trustee shall be the successor in all respects to
the Master Servicer in its capacity as servicer under this Agreement and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof, including but
not limited to the provisions of Article III. Nothing in this Agreement shall be
con strued to permit or require the Trustee to (i) succeed to the
responsibilities, duties and liabilities of the Master Servicer in its capacity
as the Seller under the Mortgage Loan Purchase Agreement or under this
Agreement, (ii) be responsible or accountable for any act or omission of the
Master Servicer prior to the issuance of a notice of termination hereunder,
(iii) require or obligate the Trustee, in its capacity as successor Master
Servicer, to purchase, repurchase or substitute any Mortgage Loan, (iv) fund any
losses on any Eligible Investment directed by any other Master Servicer, or (v)
be responsible for the representations and warranties of the Master Servicer;
PROVIDED, HOWEVER, that the Trustee, as successor Master Servicer, shall be
required to make any Monthly Advances to the extent that the Master Servicer
failed to make such Monthly Advances. As compensation therefor, the Trustee
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 (other
than compensation accruing prior to the notice of termination). 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, the Trustee on behalf of the
Certificateholders may (in the situation described in clause (i)) or shall (in
the situation described in clause (ii)) appoint or petition a court of competent
jurisdiction to appoint any established housing and home finance institution,
bank or other mortgage loan servicer having a net worth of not less than
$15,000,000 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 each Rating Agency shall have confirmed in
writing 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 by 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 in an amount equal to the compensation which the Master
Servicer would otherwise have received pur suant to Section 3.15 (or such lesser
compensation as the Trustee and such successor shall agree). 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, 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. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(b) Any successor Master Servicer, including the Trustee on
behalf of the Certificateholders, shall not be deemed to be in default or to
have breached its duties hereunder if the predecessor Master Servicer shall fail
to deliver any required deposit to the Certificate Account or otherwise
cooperate with any required servicing transfer or succession hereunder.
Section 7.03 WAIVER OF EVENTS OF DEFAULT. The Trustee shall
transmit by mail to all Certificateholders, promptly after the occurrence of any
Event of Default known to the Trustee, unless such Event of Default shall have
been cured, notice of each such Event of Default hereunder
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known to the Trustee. The Holders of at least 66% of the aggregate Voting Rights
may waive any default by the Master Servicer in the performance of its
obligations hereunder and the consequences thereof, except a default under
Section 7.01(i), which shall require the waiver of all Certificateholders
affected by such Event of Default; provided, that no waiver shall reduce in any
manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed to, or otherwise materially adversely
affect, any non-consenting Certificateholder. Upon any such waiver of a past
default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Master Servicer shall give notice of any such waiver to
the Rating Agencies.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and use the same degree
of care and skill in their exercise as a prudent investor would exercise or use
under the circumstances in the conduct of such investor's own affairs, unless
the Trustee is acting as Master Servicer pursuant to Section 7.02, in which case
it shall use the same degree of care and skill as is required of the Master
Servicer under this Agreement.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement.
The Trustee shall forward or cause to be forwarded in a timely
fashion the notices, reports and statements required to be forwarded by the
Trustee pursuant to Sections 4.03, 4.06, 7.03 and 10.01. The Trustee shall
furnish in a timely fashion to the Master Servicer such information as the
Master Servicer may reasonably request from time to time for the Master Servicer
to fulfill its duties as set forth in this Agreement. The Trustee covenants and
agrees that it shall perform its obligations hereunder in a manner so as to
maintain the status of each of REMIC I, REMIC II and REMIC III as REMICs under
the REMIC Provisions and (subject to Section 10.01(f)) to prevent the imposition
of any federal, state or local income, prohibited transaction, contribution or
other tax on any of REMIC I, REMIC II or REMIC III to the extent that
maintaining such status and avoiding such taxes are reasonably within the
control of the Trustee and are reasonably within the scope of its duties under
this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct;
PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of
Default, and after the curing or waiver of all such Events of Default
which may have occurred, the duties and obligations of the Trustee
shall be determined solely by the express provisions of this Agreement,
the 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
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the Trustee by the Company or the Master Servicer and which on their
face, do not contradict 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 or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(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
Certificateholders holding Certificates of any Class affected thereby
which evidence, as to such Class, Percentage Interests aggregating not
less than 51% as to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with
knowledge of any default (other than a default in payment to the
Trustee) specified in clauses (i) and (ii) of Section 7.01 or an Event
of Default under clauses (iii), (iv), (v) and (vi) of Section 7.01
unless a Responsible Officer of the Trustee assigned to and working in
the Corporate Trust Office obtains actual knowledge of such failure or
event or the Trustee receives written notice of such failure or event
at its Corporate Trust Office from the Master Servicer, the Company or
any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no
provision in this Agreement shall require the Trustee to expend or risk
its own funds or otherwise incur any personal financial liability in
the performance of any of its duties as Trustee hereunder, or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
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 (other than
expenses, disbursements and advances incurred or made by the Trustee, including
the compensation and the expenses of its employees, agents and counsel, in the
ordinary course of the Trustee's performance in accordance with the provisions
of this Agreement), if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of per formance 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.
Subject to the other provisions of this Agreement and without
limiting the generality of this Section, the Trustee shall have no duty (A) 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 from funds available in the
Certificate
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Account or (B) 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 rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby has given its consent; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default
hereunder and after the curing or waiver of all Events of Default which
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests, aggregating
not less than 51%; 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
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expense or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Master Servicer,
if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through Affiliates, agents or attorneys provided that the Trustee
shall remain liable for any acts of such Affiliates, agents or
attorneys; and
(vii) The right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of such act.
(b) It is intended that the Trust Fund formed hereunder shall
constitute, and that the affairs of the Trust Fund shall be conducted so as to
qualify the Trust Fund as three REMICs as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention the Trustee shall:
(i) to the extent that the affairs of the Trust are within its
control, conduct such affairs of the Trust at all times that any
Certificates are outstanding so as to maintain the status of the Trust
as three REMICs under the REMIC Provisions and any other applicable
federal, state and local laws;
(ii) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of
REMIC I, REMIC II or REMIC III;
(iii) pay the amount of any and all federal, state and local
taxes, prohibited transaction taxes as defined in Section 860F of the
Code, other than any amount due as a result of a transfer or attempted
or purported transfer in violation of Section 5.02(f), imposed on REMIC
I, REMIC II or REMIC III when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Trustee from withholding payment
of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee shall be entitled to reimbursement in
accordance with Section 8.05; and
(iv) Following the Closing Date, and except as otherwise
provided in this Agreement, the Trustee shall not knowingly accept any
contribution of assets to the Trust unless it shall have been provided
with an Opinion of Counsel at the expense of the party delivering such
assets acceptable to it to the effect that the inclusion of such assets
in the Trust will not cause the Trust to fail to qualify as three
REMICs at any time that any Certificates are outstanding or subject the
Trust to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
Section 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR
MORTGAGE LOANS.
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The recitals contained herein and in the Certificates (other
than the execution of the Certificates and relating to the acceptance and
receipt of the Mortgage Loans) shall be taken as the statements of the Company
or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of the Certificates (except
that the Certificates shall be duly and validly executed and authenticated by it
as Certificate Registrar) or of any Mortgage Loan or related document. Except as
otherwise provided herein, the Trustee shall not be accountable for the use or
application by the Company or the Master Servicer of any of the Certificates or
of the proceeds of such Certificates, or for the use or application of any funds
paid to the Company or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any of the Accounts by the Company or the 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 and may otherwise transact business with
the Company, Master Servicer with the
same rights it would have if it were not Trustee.
Section 8.05. TRUSTEE'S FEES AND EXPENSES;
INDEMNIFICATION.
(a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date (prior to the payments to Certificateholders pursuant
to Section 4.02 hereof) and pay to itself the Trustee Fee and , to the extent
funds therein are at anytime insufficient for such purpose, the Master Servicer
shall pay such fees. The Master Servicer shall pay the Trustee any additional
amounts as separately agreed. When the Trustee incurs expenses or renders
services in connection with an Event of Default described in Sections 7.01(iii)
or 7.01(iv) such expenses (including the fees and expenses of its counsel) and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors' rights
generally. In addition, the Master Servicer covenants and agrees to indemnify
the Trustee and its officers, directors, employees and agents from, and hold it
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 and counsel, in
the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee (including without
limitation any loss, liability or expense relating to environmental law) in
connection with any claim or legal action or any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its obligations and duties under this Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Trustee pursuant to this Agreement or (ii) incurred by reason of the Trustee's
negligent action, negligent failure to act or willful misconduct in the
performance of duties or by reason of the Trustee's reckless disregard of
obligations and duties hereunder. Notwithstanding the foregoing, except in the
event that any such loss, liability or expense of the Trustee is incurred by
reason of the Master Servicer's willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of the Master Servicer's
reckless disregard of its obligations and duties hereunder, the Master Servicer
shall be liable for any such loss, liability or expense of the Trustee only upon
and to the extent of the reimbursement to the Master Servicer therefor pursuant
to Section
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3.07 hereof. 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 at all times be a corporation or a
national banking association having its principal office in a state and city
acceptable to the Company and organized and doing business under the laws of
such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Company. Upon
receiving such notice of resignation, the Company 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 have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time 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 Company, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged 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
Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee. In addition, in the
event that the Company determines that the Trustee has failed (i) to distribute
or cause to be distributed to the Certificateholders any amount required to be
distributed hereunder, if such amount is held by the Trustee or its Paying Agent
(other than the Master Servicer or the Company) for distribution or (ii) to
otherwise observe or perform in any material respect any of its covenants,
agreements or obligations hereunder, and such failure shall continue unremedied
for a period of 5 days (in respect of clause (i) above) or 30 days (in respect
of clause (ii) above) after the date on which written notice of such failure,
requiring that the same be remedied, shall have been given to the Trustee by the
Company, then the Company may remove the Trustee and appoint a successor trustee
by written instrument delivered as provided in the preceding sentence. In
connection with the appointment of
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a successor trustee pursuant to the preceding sentence, the Company shall, on or
before the date on which any such appointment becomes effective, obtain from
each Rating Agency written confirmation that the appointment of any such
successor trustee will not result in the reduction of the ratings on any class
of the Certificates below the lesser of the then current or original ratings on
such Certificates.
(c) The Holders of Certificates entitled to at least 51% of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Company, one complete set to the Trustee
so removed and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
Section 8.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section
8.07 shall execute, acknowledge and deliver to the Company 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 shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to the successor trustee all Mortgage Files
and related documents and statements held by it hereunder (other than any
Mortgage Files at the time held by a Custodian, which shall become the agent of
any successor trustee hereunder), and the Company, the Master Servicer and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided
in this Section unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Company fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
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Section 8.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any corporation or national banking association into which the
Trustee may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 8.06, 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. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
Section 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE
TRUSTEE.
(a) Notwithstanding any other provisions hereof, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing the same may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee 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 Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, 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. All fees
and expenses of any co-trustee so appointed shall be paid by the Trustee out of
its own funds. 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 case an
Event of Default 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 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 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, 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 Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee 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
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the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee 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.
Section 8.11. APPOINTMENT OF CUSTODIANS.
The Trustee may, with the consent of the Master Servicer and
the Company, appoint one or more Custodians who are not Affiliates of the
Company, the Master Servicer or any Seller to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
Subject to Article VIII, the Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodian shall be a
depository institution subject to supervision by federal or state authority,
shall have a combined capital and surplus of at least $15,000,000 and shall be
qualified to do business in the jurisdiction in which it holds any Mortgage
File. Each Custodial Agreement may be amended only as provided in Section 11.01.
The Trustee shall notify the Certificateholders of the appointment of any
Custodian pursuant to this Section 8.11.
Section 8.12. APPOINTMENT OF OFFICE OR AGENCY.
The Trustee will maintain an office or agency in the City of
New York where Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates its offices located at ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for the purpose of keeping the
Certificate Register. The Trustee will maintain an office at the address stated
in Section 11.05(c) hereof where notices and demands to or upon the Trustee in
respect of this Agreement may be served.
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ARTICLE IX
TERMINATION
Section 9.01. TERMINATION UPON PURCHASE BY THE MASTER
SERVICER OR THE COMPANY OR LIQUIDATION OF
ALL MORTGAGE LOANS.
(a) Subject to Sections 9.02 and 9.03 hereof, the respective
obligations and responsibilities of the Company, the Master Servicer and the
Trustee created hereby in respect of the Certificates (other than the obligation
of the Trustee to make certain payments after the Final Distribution Date to
Certificateholders and the obligation of the Company to send certain notices as
hereinafter set forth) shall terminate upon the last action required to be taken
by the Trustee on the Final Distribution Date pursuant to this Article IX
following the earlier of:
(i) the Distribution Date on which the aggregate
Certificate Principal Balance of the Certificates has been reduced to
zero;
(ii) the later of the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all REO Property, or
(iii) the optional purchase by the Master Servicer of
all Mortgage Loans and all property acquired in respect of any Mortgage
Loan remaining in the Trust Fund as described below; PROVIDED, HOWEVER,
that 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. ▇▇▇▇▇, living on the date hereof; and
provided further that the purchase price set forth below shall be
increased as is necessary, as determined by the Master Servicer, to
avoid disqualification of any of REMIC I, REMIC II or REMIC III as a
REMIC; PROVIDED, FURTHER, that, if the amount due under any Regular
Certificate shall not have been reduced to zero prior to the Latest
Possible Maturity Date, the Holders of the Class R Certificates shall
be required to terminate this Agreement in the same manner as provided
for the Master Servicer in the succeeding sentence.
The Master Servicer (the party exercising such right, the
"Terminator"), may, at its option, terminate this Agreement by purchasing all of
the assets of the Trust Fund (including any REO Property) pursuant to clause
(iii) above on any Distribution Date when the Pool Principal Balance is less
than ten percent of the sum of the Pool Principal Balance of the Initial
Mortgage Loans as of the Cut-off Date and the Original Pre-Funded Amount (the
"Optional Termination Date") at a price equal to the greater of (A) the
aggregate Purchase Price of all the Mortgage Loans included in REMIC I, plus the
appraised value of each REO Property, if any, included in REMIC I, such
appraisal to be conducted by an appraiser mutually agreed upon by the Terminator
and the Trustee in their reasonable discretion and (B) the aggregate fair market
value of all of the assets of REMIC I (as determined by the Terminator and the
Trustee, as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is furnished to
Certificateholders pursuant to 9.01(b), plus accrued and unpaid interest thereon
at the weighted
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average of the Mortgage Rates through the end of the Due Period preceding the
Final Distribution Date, together with any amounts due to the Master Servicer
for unpaid Servicing Fees and any unreimbursed advances (the "Termination
Price"). By acceptance of the Class R Certificates, the Holder of each Class of
Class R Certificates agrees, in connection with any termination hereunder, to
assign and transfer any amounts in excess of par, and to the extent received in
respect of such termination, to pay any such amounts to the Holders of the Class
CE Certificates.
(b) The Master Servicer shall give the Trustee not less than 60 days'
prior notice of the Distribution Date on which the Master Servicer anticipates
that the final distribution will be made to Certificateholders (whether as a
result of the exercise by the Master Servicer of its right to purchase the
assets of the Trust Fund or otherwise). Notice of any termination, specifying
the anticipated Final Distribution Date (which shall be a date that would
otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee (if so required by the terms hereof)
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to the Certificateholders mailed not earlier than the
10th day and not later than the 15th day of the month next preceding the month
of such final distribution specifying:
(i) the anticipated Final Distribution Date upon which final
payment of the Certificates is anticipated to be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, and that payment will be made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified.
In the event such notice is given by the Terminator, the Terminator
shall deposit in the Distribution Account before the Final Distribution Date in
immediately available funds the Termination Price.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders the
amount otherwise distributable on such Distribution Date, or (ii) if the
Terminator elected to so repurchase, the Trustee shall distribute to the
Certificateholders the Termination Price in the order and priority set forth in
Section 4.02 hereof.
(d) In the event that any Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before the
Final Distribution Date (if so required by the terms hereof), the Trustee shall
on 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
escrow account for the benefit of such Certificateholders, and the Master
Servicer (if it exercised its right to purchase the assets of the Trust Fund),
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
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with respect thereto. If within six months after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall
take appropriate steps as directed by the Master Servicer to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting
Certificateholders shall be paid out of the assets which remain in the escrow
account. If within nine months after the second notice any Certificates shall
not have been surrendered for cancellation, the Trustee shall pay to the Master
Servicer all amounts distributable to the holders thereof and the Master
Servicer shall thereafter hold such amounts until distributed to such holders.
No interest shall accrue or be payable to any Certificateholder on any amount
held in the escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01 and the Certificateholders shall
look only to the Master Servicer for such payment.
Section 9.02. TERMINATION OF REMIC II AND REMIC III.
REMIC II and REMIC III shall be terminated on the earlier of
the Final Distribution Date and the date on which each is deemed to receive the
last deemed distributions on the Uncertificated REMIC I Regular Interests and
Uncertificated REMIC II Regular Interests, respectively, and the date on which
the last distribution on the Regular Certificates and Class R-III Certificates
is made.
Section 9.03. ADDITIONAL TERMINATION REQUIREMENTS.
(a) REMIC I, REMIC II or REMIC III, as the case may be, shall
be terminated in accordance with the following additional requirements, unless
(subject to Section 10.01(f)) the Trustee and the Master Servicer have received
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee) to the effect that the failure of REMIC I, REMIC II or REMIC III, as
the case may be, to comply with the requirements of this Section 9.03 will not
(i) result in the imposition on the Trust Fund of taxes on "prohibited
transactions," as described in Section 860F of the Code, or (ii) cause either
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any time that
any Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day
liquidation period for REMIC I, REMIC II, and REMIC III and specify the
first day of such period in a statement attached to the Trust Fund's
final Tax Return pursuant to Treasury regulations Section 1.860F-1. The
Master Servicer also shall satisfy all of the requirements of a
qualified liquidation for the Trust Fund under Section 860F of the Code
and the Treasury regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at
the commencement of such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell or otherwise dispose of all of the remaining assets
of the Trust Fund in accordance with the terms hereof; and
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(iii) If the Master Servicer or the Class C or Class R
Certificateholders is exercising its right to purchase the assets of
the Trust Fund, the Master Servicer, Class C or Class R
Certificateholders shall, during the 90-day liquidation period and at
or prior to the Final Distribution Date, purchase all of the assets of
the Trust Fund for cash; PROVIDED, HOWEVER, that in the event that a
calendar quarter ends after the commencement of the 90-day liquidation
period but prior to the Final Distribution Date, neither the Master
Servicer nor the Class C or Class R Certificateholders shall purchase
any of the assets of the Trust Fund prior to the close of that calendar
quarter.
(b) Each Holder of a Certificate and the Trustee hereby
irrevocably approves and appoints the Master Servicer as its attorney-in-fact to
adopt a plan of complete liquidation for REMIC I, REMIC II and REMIC III at the
expense of the Trust Fund in accordance with the terms
and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC ADMINISTRATION.
(a) The REMIC Administrator shall make elections to treat each
of REMIC I, REMIC II and REMIC III as a REMIC under the Code and, if necessary,
under applicable state law. Each such election will be made on Form 1066 or
other appropriate federal tax or information return (including Form 8811) or any
appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. For purposes of the REMIC I
election in respect of the Trust Fund, the Uncertificated REMIC I Regular
Interests shall be designated as the "regular interests" and the Class R-I
Certificates shall be designated as the sole class of "residual interest" in
REMIC I. For purposes of the REMIC II election in respect of the Trust Fund and
the Uncertificated REMIC II Regular Interests shall be designated as the
"regular interests" and the Class R-II Certificates shall be designated as the
sole class of "residual interest" in REMIC II. For purposes of the REMIC III
election in respect of the Trust Fund, the Regular Certificates shall be
designated as the "regular interests" and the Class R-III Certificates shall be
designated as the sole class of "residual interests" in REMIC III. The REMIC
Administrator and the Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in REMIC I, REMIC II or REMIC
III other than the Uncertificated REMIC I Regular Interests and the Class R-I
Certificates, the Uncertificated REMIC II Regular Interests and the Class R-II
Certificates and the Regular Certificates and the Class R-III Certificates,
respectively.
(b) The Closing Date is hereby designated as the "startup day"
of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R-I
Certificate, a Class R-II Certificate and a Class R-III Certificate representing
a 0.01% Percentage Interest of the Class R-I Certificates, a 0.01% Percentage
Interest of the Class R-II Certificates and a 0.01% Percentage Interest of the
Class R-III Certificates respectively, and shall be designated as "the tax
matters person" with respect to REMIC I, REMIC II and REMIC III in the manner
provided under Treasury regulations section 1.860F-4(d) and temporary Treasury
regulations section 301.6231(a)(7)-1. The REMIC Administrator, as tax matters
person, shall (i) act on behalf of REMIC I, REMIC II and REMIC III in relation
to any tax matter or controversy involving the Trust Fund and (ii) represent the
Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom
shall be expenses of the Trust Fund and the REMIC Administrator shall be
entitled to reimbursement therefor out of amounts attributable to the Mortgage
Loans on deposit in the Certificate Account as provided by Section 3.07 unless
such legal expenses and costs are incurred by reason of the REMIC
Administrator's willful misfeasance, bad faith or gross negligence. If the REMIC
Administrator is no longer the Master Servicer hereunder, at its option the
REMIC Administrator may continue its duties as REMIC Administrator and shall be
paid reasonable
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compensation not to exceed $3,000 per year by any successor Master Servicer
hereunder for so acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be
prepared all of the Tax Returns that it determines are required with respect to
any of REMIC I, REMIC II or REMIC III created hereunder and deliver such Tax
Returns in a timely manner to the Trustee and the Trustee shall sign and file
such Tax Returns in a timely manner. The expenses of preparing such returns
shall be borne by the REMIC Administrator without any right of reimbursement
therefor. The REMIC Administrator agrees to indemnify and hold harmless the
Trustee with respect to any tax or liability arising from the Trustee's signing
of Tax Returns that contain errors or omissions. The Trustee and Master Servicer
shall promptly provide the REMIC Administrator with such information, within
their respective control, as the REMIC Administrator may from time to time
request for the purpose of enabling the REMIC Administrator to prepare Tax
Returns.
(e) The REMIC Administrator shall provide (i) to any
Transferor of a Class R Certificate such information as is necessary for the
application of any tax relating to the transfer of a Class R Certificate to any
Person who is not a Permitted Transferee, (ii) to the Trustee and the Trustee
shall forward to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium based upon 28%
CPR and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each of
REMIC I, REMIC II and REMIC III.
(f) The Master Servicer and the REMIC Administrator shall take
such actions and shall cause each of REMIC I, REMIC II and REMIC III created
hereunder to take such actions as are reasonably within the Master Servicer's or
the REMIC Administrator's control and the scope of its duties more specifically
set forth herein as shall be necessary or desirable to maintain the status
thereof as REMICs under the REMIC Provisions (and the Trustee shall assist the
Master Servicer and the REMIC Administrator, to the extent reasonably requested
by the Master Servicer and the REMIC Administrator to do so). The Master
Servicer and the REMIC Administrator shall not knowingly or intentionally take
any action, cause each of REMIC I, REMIC II or REMIC III to take any action or
fail to take (or fail to cause to be taken) any action reasonably within their
respective control, that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of any of REMIC I , REMIC II or
REMIC III as a REMIC or (ii) result in the imposition of a tax upon each of
REMIC I, REMIC II or REMIC III (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, in the absence of an Opinion of Counsel or the indemnification
referred to in this sentence, an "Adverse REMIC Event") unless the Master
Servicer or the REMIC Administrator, as applicable, has received an Opinion of
Counsel (at the expense of the party seeking to take such action or, if such
party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to each of REMIC I, REMIC II or REMIC III created hereunder,
endanger such status or, unless the Master
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Servicer, the REMIC Administrator or both, as applicable, determine in its or
their sole discretion to indemnify the Trust Fund against the imposition of such
a tax, result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might
result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the
Trust Fund, such action may nonetheless be taken provided that the indemnity
given in the preceding sentence with respect to any taxes that might be imposed
on the Trust Fund has been given and that all other preconditions to the taking
of such action have been satisfied. The Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the Master Servicer
or the REMIC Administrator, as applicable, has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to REMIC I, REMIC II or REMIC III or their assets, or causing REMIC I,
REMIC II or REMIC III to take any action, which is not expressly permitted under
the terms of this Agreement, the Trustee will consult with the Master Servicer
or the REMIC Administrator, as applicable, or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to REMIC I, REMIC II or REMIC III, and the Trustee shall not take any
such action or cause REMIC I, REMIC II or REMIC III to take any such action as
to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The Master
Servicer or the REMIC Administrator, as applicable, may consult with counsel to
make such written advice, and the cost of same shall be borne by the party
seeking to take the action not expressly permitted by this Agreement, but in no
event at the expense of the Master Servicer or the REMIC Administrator. At all
times as may be required by the Code, the Master Servicer will to the extent
within its control and the scope of its duties more specifically set forth
herein, maintain substantially all of the assets of REMIC I, REMIC II or REMIC
III as "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of REMIC I, REMIC II or REMIC III created hereunder as defined in
Section 860F(a)(2) of the Code, on "net income from foreclosure property" of
REMIC I, REMIC II or REMIC III as defined in Section 860G(c) of the Code, on any
contributions to REMIC I, REMIC II or REMIC III after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code
or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the Master Servicer, if such tax arises out of or results from a
breach by the Master Servicer of any of its obligations under this Agreement or
the Master Servicer has in its sole discretion determined to indemnify the Trust
Fund against such tax, (ii) to the Trustee, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under Article VIII or
this Article X, or (iii) otherwise against amounts on deposit in the Certificate
Account as provided by Section 3.07.
(h) The Trustee and the Master Servicer shall, for federal
income tax purposes, maintain books and records with respect to REMIC I, REMIC
II and REMIC III on a calendar year and on an accrual basis or as otherwise may
be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Master Servicer nor
the Trustee shall accept any contributions of assets to REMIC I, REMIC II or
REMIC III unless (subject to 10.01(f))
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the Master Servicer and the Trustee shall have received an Opinion of Counsel
(at the expense of the party seeking to make such contribution) to the effect
that the inclusion of such assets in REMIC I, REMIC II or REMIC III will not
cause REMIC I, REMIC II or REMIC III to fail to qualify as REMICs at any time
that any Certificates are outstanding or subject REMIC I, REMIC II or REMIC III
to any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject
to Section 10.01(f)) enter into any arrangement by which REMIC I, REMIC II or
REMIC III will receive a fee or other compensation for services nor permit
either such REMIC to receive any income from assets other than "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury Regulations, the "latest possible maturity date" by which the
Certificate Principal Balance of each Class of Certificates or each Component
representing a regular interest in REMIC III, the Uncertificated Principal
Balance of each Uncertificated REMIC I Regular Interest and the Uncertificated
Principal Balance of each Uncertificated REMIC II Regular Interest would be
reduced to zero is October 15, 2029, which is the Distribution Date immediately
following the maturity date for the Mortgage Loan with the latest scheduled
maturity date.
(l) Within 30 days after the Closing Date, the REMIC
Administrator shall prepare and file with the Internal Revenue Service Form
8811, "Information Return for Real Estate Mortgage Investment Conduits (REMIC)
and Issuers of Collateralized Debt Obligations" for REMIC I, REMIC II and REMIC
III.
(m) Neither the Trustee nor the Master Servicer shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the default, imminent default or foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property
acquired by deed in lieu of foreclosure, (ii) the bankruptcy of Trust Fund,
(iii) the termination of REMIC I, REMIC II or REMIC III pursuant to Article IX
of this Agreement or (iv) a purchase of Mortgage Loans pursuant to Article II or
III of this Agreement) nor acquire any assets for REMIC I, REMIC II or REMIC
III, nor sell or dispose of any investments in the Certificate Account or the
Certificate Account for gain nor accept any contributions to REMIC I, REMIC II
or REMIC III after the Closing Date unless it has received an Opinion of Counsel
that such sale, disposition, substitution or acquisition will not (a) affect
adversely the status of REMIC I, REMIC II or REMIC III as a REMIC or (b) unless
the Master Servicer has determined in its sole discretion to indemnify the Trust
Fund against such tax, cause REMIC I, REMIC II or REMIC III to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
Section 10.02. MASTER SERVICER, REMIC ADMINISTRATOR
AND TRUSTEE INDEMNIFICATION.
(a) The Trustee agrees to indemnify the Trust Fund, the
Company, the REMIC Administrator and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Company or the Master
116
Servicer, as a result of a breach of the Trustee's covenants set forth in
Article VIII or this Article X. In the event that WMC Mortgage Corp. is no
longer the Master Servicer, the Trustee shall indemnify WMC Mortgage Corp. for
any taxes and costs including, without limitation, any reasonable attorneys fees
imposed on or incurred by WMC Mortgage Corp. as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust
Fund, the Company, the Master Servicer and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company, the Master Servicer or the Trustee, as
a result of a breach of the REMIC Administrator's covenants set forth in this
Article X with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the REMIC Administrator that contain errors or omissions;
provided, however, that such liability will not be imposed to the extent such
breach is a result of an error or omission in information provided to the REMIC
Administrator by the Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund,
the Company, the REMIC Administrator and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company or the Trustee, as a result of a breach
of the Master Servicer's covenants set forth in this Article X or in Article III
with respect to compliance with the REMIC Provisions, including without
limitation, any penalties arising from the Trustee's execution of Tax Returns
prepared by the Master Servicer that contain errors or omissions.
117
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. AMENDMENT.
(a) This Agreement may be amended from time to time by the
Company, the Master Servicer and the Trustee, without the consent of any of the
Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein, which
may be inconsistent with any other provisions herein or to correct any
error,
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or desirable to maintain the
qualification of REMIC I, REMIC II or REMIC III as a REMIC at all times
that any Certificate is outstanding or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that
would be a claim against the Trust Fund, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is
necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax and (B) such action
will not adversely affect in any material respect the interests of any
Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Certificate Account or the Distribution Account or to change the name
in which the Distribution Account is maintained, provided that (A) the
Determination Date shall in no event be later than the related
Distribution Date, (B) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and (C) such change shall not result
in a reduction of the rating assigned to any Class of Certificates
below the lower of the then-current rating or the rating assigned to
such Certificates as of the Closing Date, as evidenced by a letter from
each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section
5.02(f) or any other provision hereof restricting transfer of the Class
R-I, Class R-II and Class III Certificates by virtue of their being the
"residual interests" in REMIC I, REMIC II and REMIC III, respectively;
provided that (A) such change shall not result in reduction of the
rating assigned to any such Class of Certificates below the lower of
the then-current rating or the rating assigned to such Certificates as
of the Closing Date, as evidenced by a letter from each Rating Agency
to such effect, and (B) such change shall not (subject to Section
10.01(f)), as evidenced by an Opinion of Counsel (at the expense of the
party seeking so to modify, eliminate or add such provisions), cause
REMIC I, REMIC II or REMIC III or any of the Certificateholders (other
than the transferor) to be subject to a federal tax caused by a
transfer to a Person that is not a Permitted Transferee, or
118
(vi) to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such
action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder
and is authorized or permitted under the terms of this Agreement.
(b) This Agreement may also be amended from time to time by
the Company, the Master Servicer and the Trustee with the consent of the Holders
of Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates of such Class; PROVIDED, HOWEVER, that no such amendment
shall:
(i) reduce in any manner the amount of, or delay
the timing of, payments which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, or
(ii) adversely affect in any material respect the
interest of the Holders of Certificates of any Class in a manner other
than as described in clause (i) hereof without the consent of Holders
of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 66%, or
(iii) reduce the aforesaid percentage of Certificates
of any Class the Holders of which are required to consent to any such
amendment, in any such case without the consent of the Holders of all
Certificates of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement,
the Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (subject to Section 10.01(f) and at
the expense of the party seeking such amendment) to the effect that such
amendment or the exercise of any power granted to the Master Servicer, the
Company or the Trustee in accordance with such amendment will not result in the
imposition of a federal tax on the Trust Fund or cause any of REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that any Certificate is
outstanding. The Trustee may but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise; provided however, such consent
shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment
requiring Certificateholder consent, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder. It
shall not be necessary for the consent of Certificateholders under this Section
11.01 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
119
(e) The Company shall have the option, in its sole discretion,
to obtain and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class R Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class R Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in the Trust
Fund. To the extent that any such instrument or fund constitutes a reserve fund
for federal income tax purposes, (i) any reserve fund so established shall be an
outside reserve fund and not an asset of the Trust Fund, (ii) any such reserve
fund shall be owned by the Company, and (iii) amounts transferred by the Trust
Fund to any such reserve fund shall be treated as amounts distributed by the
Trust Fund to the Company or any successor, all within the meaning of Treasury
regulations Section 1.860G-2(h) in effect as of the Cut-off Date. In connection
with the provision of any such instrument or fund, this Agreement and any
provision hereof may be modified, added to, deleted or otherwise amended in any
manner that is related or incidental to such instrument or fund or the
establishment or administration thereof, such amendment to be made by written
instrument executed or consented to by the Company and such related insurer but
without the consent of any Certificateholder and without the consent of the
Master Servicer or the Trustee being required unless any such amendment would
impose any additional obligation on, or otherwise adversely affect the interests
of the Certificateholders, the Master Servicer or the Trustee, as applicable;
provided that the Company obtains (subject to Section 10.01(f)) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
any such amendment 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 and (b) any of REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
Section 11.02. RECORDATION OF AGREEMENT;
COUNTERPARTS.
(a) 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 and at its expense on direction by the Trustee
(pursuant to the request of Holders of Certificates entitled to at least 25% of
the Voting Rights), but only upon direction accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
120
Section 11.03. LIMITATION ON RIGHTS OF
CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of any
of the parties hereto.
(b) No Certificateholder shall have any right to vote (except
as expressly provided herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon 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 of any Class evidencing in the aggregate not less than
25% of the related Percentage Interests of such Class, 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 shall have given its written consent, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates of any Class 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 of such
Class or any other Class, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
Certificateholders of such Class or all Classes, as the case may be. For the
protection and enforcement of the provisions of this Section 11.03, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 11.04. GOVERNING LAW.
This agreement and the Certificates shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to any applicable conflicts of law provisions, the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
121
Section 11.05. NOTICES.
All demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Trustee which shall
be deemed to have been duly given only when received), to (a) in the case of the
Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President, with a copy to the same address, Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq., Legal
Department or such other address as may hereafter be furnished to the other
parties hereto by the Company, (b) in the case of the Master Servicer, Servicing
Department, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President, Loan Servicing with a copy to the same
address, Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq., Legal Department or such other address as
may be hereafter furnished to the other parties hereto in writing, (c) in the
case of the Trustee, to the Corporate Trustee office or such other address as
may hereafter be furnished to the other parties hereto in writing by the
Trustee, (d) in the case of the Special Servicer, Ocwen Federal Bank FSB, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Secretary (with a copy to Ocwen Federal Bank FSB, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Law Department) or such
other address as may hereafter be furnished to the other parties hereto in
writing by the Special Servicer, (e) in the case of Duff & ▇▇▇▇▇▇ Credit Rating
Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other address as may
be hereafter furnished to the other parties hereto by DCR and (f) in the case of
▇▇▇▇▇'▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other address as may
be hereafter furnished to the other parties hereto by ▇▇▇▇▇'▇. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
Section 11.06. NOTICES TO RATING AGENCIES.
The Company, the Master Servicer or the Trustee, as
applicable, shall notify each Rating Agency and each Subservicer at such time as
it is otherwise required pursuant to this Agreement to give notice of the
occurrence of, any of the events described in clause (a), (b), (c), (d), (g),
(h), (i) or (j) below or provide a copy to each Rating Agency at such time as
otherwise required to be delivered pursuant to this Agreement of any of the
statements described in clauses (e) and (f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) the termination or appointment of a successor Master
Servicer or Trustee or a change in the majority ownership of the
Trustee,
122
(d) the filing of any claim under the Master Servicer's
blanket fidelity bond and the errors and omissions insurance policy
required by Section 3.11 or the cancellation or
modification of coverage under any such instrument,
(e) the statement required to be delivered to the Holders of
each Class of Certificates pursuant to Section 4.03,
(f) the statements required to be delivered pursuant to
Sections 3.18 and 3.19,
(g) a change in the location of the Certificate Account or the
Distribution Account,
(h) the occurrence of the Final Distribution Date, and
(i) the repurchase of or substitution for any Mortgage Loan,
PROVIDED, HOWEVER, that with respect to notice of the occurrence of the events
described in clause (d) above, the Master Servicer shall provide prompt written
notice to each Rating Agency and the
Subservicer of any such event known to the Master Servicer.
Section 11.07. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed 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 11.08. SUPPLEMENTAL PROVISIONS FOR
RESECURITIZATION.
(a) This Agreement may be supplemented by means of the
addition of a separate Article hereto (a "Supplemental Article") for the purpose
of resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Company or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Company may deposit such Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Company, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement.
123
Each Supplemental Article shall set forth all necessary
provisions relating to the holding of the Resecuritized Certificates by the
Trustee, the establishment of the Restructuring Vehicle, the issuing of various
classes of new certificates by the Restructuring Vehicle and the distributions
to be made thereon, and any other provisions necessary to the purposes thereof.
In connection with each Supplemental Article, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust, FASIT or other entity not subject to
taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of REMIC I, REMIC II or REMIC
III as a REMIC or (subject to Section 10.01(f)) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC as set forth in Section 860G(d) of the Code). In
addition, the Company must receive confirmation from the Rating Agencies that
such Supplemental Article will not cause a downgrade in the then current-rating
on any Class of Certificates.
Section 11.09. THIRD PARTY BENEFICIARIES.
This Agreement will inure to the benefit of and be binding
upon the parties hereto, the Certificateholders and their respective successors
and permitted assigns. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder. The Trustee shall have the
right to exercise all rights of the Trust Fund under this Agreement.
124
IN WITNESS WHEREOF, the Company, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the date and year first above written.
WMC SECURED ASSETS CORP.,
as Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer &
Treasurer
WMC MORTGAGE CORP.,
as Master Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of September, 1999 before me, a notary public
in and for said State, personally appeared _______________, known to me to be a
________________ of WMC Secured Assets Corp., one of the corporations 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.
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of September, 1999 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _____________________ of WMC Mortgage Corp., one of the corporations 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.
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of September, 1999 before me, a notary public
in and for said State, personally appeared ___________, known to me to be a
______________________, of Bank One, 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 national banking association 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.
--------------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
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.
Certificate No. ___ Variable Pass-Through Rate
Class A
Date of Pooling and Servicing
Agreement: Percentage Interest: ______%
September 30, 1999
Initial Certificate Principal Balance
First Distribution Date: of Class A Certificates
November 15, 1999 $192,500,000.00
Master Servicer: Initial Certificate Principal
WMC Mortgage Corp. Balance of this Certificate
$_____________________
CUSIP: 92928S AL 8
WMC MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1999-A
evidencing a percentage interest in any distributions allocable
to the Class A Certificates with respect to the Trust Fund
consisting primarily of a pool of closed end, adjustable rate and
fixed rate, one- to four-family, first lien, sub-prime mortgage
loans sold by WMC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in WMC Secured Assets Corp., the
Master Servicer, the Trustee referred to below or any of their Affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by WMC Secured Assets
Corp., the Master Servicer, the Trustee or any of their Affiliates. None of WMC
Secured Assets Corp., the Master Servicer or any of their Affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class A Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of closed end, adjustable rate and
fixed rate, one- to four-family, first lien, sub- prime mortgage loans (the
"Mortgage Loans") sold to the Trust Fund by WMC Secured Assets Corp.
(hereinafter called the "Company", which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Company, the Master Servicer and Bank One, National Association, as trustee
(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, a distribution will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of required to be distributed to Holders of Class A
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed 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 due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as WMC Mortgage Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
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 Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes
A-1-2
other than distributions to Certificateholders, such purposes including without
limitation reimbursement to the Company and the Master Servicer of certain
expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee and the Holders of Certificates evidencing in the
aggregate not less than 66% of the Percentage Interests of each Class of
Certificates affected thereby. 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 thereon. The Agreement also permits the amendment thereof in
certain circumstances without the consent of the Holders of any of the
Certificates and, in certain additional circumstances, without the consent of
the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, 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 in the City and
State of New York, 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 authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, 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 neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by
A-1-3
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
Aggregate Certificate Principal Balance has been reduced to zero, (ii) the
maturity or other liquidation of the last Mortgage Loan subject thereto or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (iii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from REMIC I
of all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan 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 may only be exercised on any
Distribution Date when the Pool Principal Balance is less than ten percent of
the sum of the Pool Principal Balance as of the Initial Cut-off Date and the
Original Pre-Funded Amount.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ________________ BANK ONE, NATIONAL
ASSOCIATION,
as Trustee
By:____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Certificate Registrar
By:___________________________________
Authorized Signatory
A-1-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within WMC Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration 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 denomination 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
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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS [M-1][M-2][M-3] 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.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES[,] [AND] [CLASS M-1 CERTIFICATES] [AND] [CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
IN THE CASE OF TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) OTHER THAN
IN THE FORM OF A DEFINITIVE CERTIFICATE, THE TRANSFEREE SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (A) SUCH PURCHASER IS NOT A PLAN AND IS NOT PURCHASING
SUCH CERTIFICATE (OR INTEREST THEREIN) ON BEHALF OF, OR WITH ASSETS OF, ANY PLAN
OR (B) THE PURCHASE OF ANY SUCH CERTIFICATE (OR INTEREST THEREIN) BY OR ON
BEHALF OF, OR WITH PLAN ASSETS OF, ANY PLAN IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION
4975 OF THE CODE AND WILL NOT SUBJECT THE COMPANY, THE TRUSTEE OR THE MASTER
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. ___ Variable Pass-Through Rate
Class [M-1][M-2][M-3]
Date of Pooling and Servicing Aggregate Initial Certificate Principal
Agreement: Balance of the Class [M-1][M-2][M-3]
September 30, 1999 Certificates:
$[19,375,000.00] [13,750,000.00]
[10,625,000.00]
First Distribution Date: Initial Certificate Principal
November 15, 1999 Balance of this Certificate:
$____________________
Master Servicer: Percentage Interest: ______%
WMC Mortgage Corp.
CUSIP: [92928S AM 6] [92928S AN 4]
[92928S AP 9]
WMC MORTGAGE PASS-THROUGH CERTIFICATE
Series 1999-A
evidencing a percentage interest in any distributions allocable
to the Class [M-1][M- 2][M-3] Certificates with respect to the
Trust Fund consisting primarily of a pool of closed end,
adjustable rate and fixed rate, fully-amortizing, one- to
four-family, first lien sub-prime mortgage loans sold by WMC
SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in WMC Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their Affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by WMC Secured Assets
Corp., the Master Servicer or the Trustee or any of their Affiliates. None of
the Company, the Master Servicer or any of their Affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class [M-1][M-2][M-3] Certificates,
both as specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of closed end, adjustable rate and
fixed rate, one- to four-family, first lien, sub-prime mortgage loans (the
"Mortgage Loans") sold to the Trust Fund by WMC Secured Assets Corp.
(hereinafter called the "Company", which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling
A-2-2
and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and Bank One, National Association, as trustee (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, a distribution will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of required to be distributed to Holders of Class
[M-1][M-2][M-3] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed 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 due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
Any purchaser of this Certificate (or interest therein) not issued or
transferred as a Definitive Certificate will be deemed to have represented by
such purchase that either (a) such purchaser is not a Plan and is not purchasing
such Certificate (or interest therein) on behalf of, or with assets of, any Plan
or (b) the purchase of any such Certificate (or interest therein) by or on
behalf of, or with Plan assets of, any Plan is permissible under applicable law,
will not result in any non-exempt prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Company, the Trustee or the Master
Servicer to any obligation in addition to those undertaken in this Agreement.
Transfers of this Certificate to a Plan, to a trustee or other person
acting on behalf of any Plan, or to any other person using the assets of any
Plan in the form of Definitive Certificates, will not be registered by the
Trustee unless the transferee provides the Company, the Trustee and the Master
Servicer with an opinion of counsel satisfactory to the Company, the Trustee and
the Master Servicer, which opinion will not be at the expense of the Company,
the Trustee or the Master Servicer, that the purchase of such Certificates by or
on behalf of such Plan is permissible under applicable law, will not constitute
or result in a non-exempt prohibited transaction under ERISA or
A-2-3
Section 4975 of the Code and will not subject the Company, the Trustee or the
Master Servicer to any obligation in addition to those undertaken in this
Agreement. In lieu of such opinion of counsel, the transferee may provide a
certification substantially to the effect that the purchase of this Certificate
by or on behalf of such Plan is permissible under applicable law, will not
subject the Company, the Trustee or the Master Servicer to any obligation in
addition to those undertaken in this Agreement, and the following statements are
correct: (i) the transferee is an insurance company and the source of funds used
to purchase this Certificate is an "insurance company general account" (as such
term is defined in ▇▇▇▇ ▇▇-▇▇), (▇▇) the conditions set forth in Sections I and
III of PTCE 95-60 have been satisfied and (iii) there is no Plan with respect to
which the amount of such general accounts 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 exceed 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 this Certificate.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as WMC Mortgage Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
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 Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes other than distributions to Certificateholders,
such purposes including without limitation reimbursement to the Company and the
Master Servicer of certain expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. 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 thereon. The Agreement also permits the amendment
thereof in certain circumstances without the consent of the Holders of any of
the Certificates and, in certain additional circumstances, without the consent
of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, 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 in the City and
State of New York, 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
A-2-4
new Certificates of authorized denominations evidencing the same Class and
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, 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 neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders 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 Aggregate Certificate Principal Balance
has been reduced to zero, (ii) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (iii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from REMIC I
all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
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 may only be exercised on any Distribution Date when the Pool Principal
Balance is less than ten percent of the sum of the Pool Principal Balance as of
the Initial Cut-off Date and the Original Pre-Funded Amount.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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.
A-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [M-1][M-2][M-3] Certificates referred to in
the within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Certificate Registrar
By:______________________________________
Authorized Signatory
A-2-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________(Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within WMC Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration 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 denomination 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
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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS CE 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.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
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. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT, USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES, EQUAL TO A CONSTANT PREPAYMENT RATE OF 28% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$9,442.17 OF OID PER $100,000 OF INITIAL NOTIONAL AMOUNT, THE YIELD TO MATURITY
IS 20.78% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO
MORE THAN $76.68 PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED USING 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 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 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. ___ Variable Pass-Through Rate
Class CE
Date of Pooling and Servicing Aggregate Initial Certificate Principal
Agreement: Balance of the Class CE
September 30, 1999 Certificates:
$13,749,900.00
First Distribution Date: Initial Certificate Principal
November 15, 1999 Balance of this Certificate:
$_________________
Master Servicer: Percentage Interest: ______%
WMC Mortgage Corp.
Aggregate Initial Notional Amount Initial Notional Amount
of the Class CE Certificates: of this Certificate:
$249,999,900.00 $_____________________
WMC MORTGAGE PASS-THROUGH CERTIFICATE
Series 1999-A
evidencing a percentage interest in any distributions allocable
to the Class CE Certificates with respect to the Trust Fund
consisting primarily of a pool of closed end, adjustable rate and
fixed rate, fully-amortizing, one- to four-family, first lien,
sub-prime mortgage loans sold by WMC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in WMC Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their Affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by WMC Secured Assets
Corp., the Master Servicer or the Trustee or any of their Affiliates. None of
the Company, the Master Servicer or any of their Affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that ____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
closed end, adjustable rate and fixed rate, one- to four-family, first lien,
sub-prime mortgage loans (the "Mortgage Loans"), sold to the Trust Fund by WMC
Secured Assets Corp. (hereinafter called the "Company", which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master
A-3-2
Servicer and Bank One, National Association, as trustee (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, a distribution will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of required to be distributed to Holders of Class CE
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed 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 due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.
No transfer, sale, pledge or other disposition of this Class CE
Certificate shall be made unless such transfer, sale, pledge or other
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 said Act and laws. Except as otherwise provided in
Section 5.02(d) of the Agreement, in the event that a transfer of this Class CE
Certificate is to be made either (i)(A) the Trustee shall require a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Company that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from said Act and
laws or is being made pursuant to said Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee, the Company or the Master Servicer;
provided that such Opinion of Counsel will not be required in connection with
the initial transfer of any such Certificate by the Company or any Affiliate
thereof to an Affiliate of the Company and (B) the Trustee shall require the
transferee to execute a representation letter, substantially in the form of
Exhibit G-1 to the Agreement, and the Trustee shall require the transferor to
execute a representation letter, substantially in the form of Exhibit H to the
Agreement, each acceptable to and in form and substance satisfactory to the
Company and the Trustee certifying to the Company and the Trustee the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trustee, the Company or the Master Servicer; provided, however, that such
representation letters will not be required in connection with any transfer of
any such Certificate by the Company or any Affiliate thereof to an Affiliate of
the Company, and the Trustee shall be entitled to conclusively rely upon a
representation
A-3-3
(which, upon the request of the Trustee, shall be written representation) from
the Company of the status, of such transferee as an Affiliate of the Company or
(ii) the prospective transferee of such a Certificate shall be required to
provide the Trustee, the Company and the Master Servicer with an investment
letter substantially in the form of Exhibit G-1 attached to the Agreement, which
investment letter shall not be an expense of the Trustee, the Company, or the
Master Servicer, and which investment letter states that, among other things,
such transferee (A) is a "qualified institutional buyer" as defined under Rule
144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (B) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the 1933 Act provided by Rule 144A. The Holder of this Class
CE Certificate desiring to effect any such transfer, sale, pledge or other
disposition shall, and does hereby agree to, indemnify the Trustee, the Company,
the Master Servicer and the Certificate Registrar against any liability that may
result if the transfer, sale, pledge or other disposition is not so exempt or is
not made in accordance with such federal and state laws and this Agreement.
No transfer of this Class CE Certificate will be made unless the
Trustee has received either (i) an opinion of counsel satisfactory to the
Company, the Trustee and the Master Servicer, which opinion will not be at the
expense of the Company, the Trustee or the Master Servicer, that the purchase of
such Certificates by or on behalf of such Plan is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Company, the Trustee
or the Master Servicer to any obligation in addition to those undertaken in this
Agreement or (ii) a representation letter, in the form as described by the
Agreement, substantially to the effect that the purchase of this Certificate by
or on behalf of such Plan is permissible under applicable law will not subject
the Company, the Trustee or the Master Servicer to any obligation in addition to
those undertaken in this Agreement, and the following statements are correct:
(i) the transferee is an insurance company and the source of funds used to
purchase this Certificate is an "insurance company general account" (as such
term is defined in ▇▇▇▇ ▇▇-▇▇), (▇▇) the conditions set forth in Sections I and
III of PTCE 95-60 have been satisfied and (iii) there is no Plan with respect to
which the amount of such general accounts 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 exceed 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 Certificate.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as WMC Mortgage Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
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 Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes other than distributions to Certificateholders,
such purposes including without limitation reimbursement to the Company and the
Master Servicer of certain expenses incurred by either of them.
A-3-4
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. 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 thereon. The Agreement also permits the amendment
thereof in certain circumstances without the consent of the Holders of any of
the Certificates and, in certain additional circumstances, without the consent
of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, 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 in the City and
State of New York, 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 authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, 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 neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders 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 Aggregate Certificate Principal Balance
has been reduced to zero, (ii) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage
A-3-5
Loan and (iii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan 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 may only be exercised on any Distribution Date when the Pool
Principal Balance is less than ten percent of the sum of the Pool Principal
Balance as of the Initial Cut-off Date and the Original Pre-Funded Amount.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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.
A-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Certificate Registrar
By:______________________________________
Authorized Signatory
A-3-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within WMC Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration 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 denomination 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
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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS P 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 FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT, USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES, EQUAL TO A CONSTANT PREPAYMENT RATE OF 28% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$547.60 OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO
MATURITY IS 20.20% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $15.25 PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED USING 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 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 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. ___
Class P
Date of Pooling and Servicing Aggregate Initial Certificate Principal
Agreement: Balance of the Class P
September 30, 1999 Certificates:
$100.00
First Distribution Date: Initial Certificate Principal
November 15, 1999 Balance of this Certificate:
$100.00
Master Servicer: Percentage Interest: 100.00%
WMC Mortgage Corp.
WMC MORTGAGE PASS-THROUGH CERTIFICATE
Series 1999-A
evidencing a percentage interest in any distributions allocable
to the Class P Certificates with respect to the Trust Fund
consisting primarily of a pool of closed end, adjustable rate and
fixed rate, fully-amortizing, one- to four-family, first lien,
sub-prime mortgage loans sold by WMC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in WMC Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their Affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by WMC Secured Assets
Corp., the Master Servicer or the Trustee or any of their Affiliates. None of
the Company, the Master Servicer or any of their Affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that ____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
closed end, adjustable rate and fixed rate, one- to four-family, first lien,
sub-prime mortgage loans (the "Mortgage Loans"), sold to the Trust Fund by WMC
Secured Assets Corp. (hereinafter called the "Company", which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and Bank One, National
Association, as trustee (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
A-4-2
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, a distribution will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of required to be distributed to Holders of Class P
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed 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 due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.
No transfer, sale, pledge or other disposition of this Class P
Certificate shall be made unless such transfer, sale, pledge or other
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 said Act and laws. Except as otherwise provided in
Section 5.02(d) of the Agreement, in the event that a transfer of this Class P
Certificate is to be made either (i)(A) the Trustee shall require a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Company that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from said Act and
laws or is being made pursuant to said Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee, the Company or the Master Servicer;
provided that such Opinion of Counsel will not be required in connection with
the initial transfer of any such Certificate by the Company or any Affiliate
thereof to an Affiliate of the Company and (B) the Trustee shall require the
transferee to execute a representation letter, substantially in the form of
Exhibit G-1 to the Agreement, and the Trustee shall require the transferor to
execute a representation letter, substantially in the form of Exhibit H to the
Agreement, each acceptable to and in form and substance satisfactory to the
Company and the Trustee certifying to the Company and the Trustee the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trustee, the Company or the Master Servicer; provided, however, that such
representation letters will not be required in connection with any transfer of
any such Certificate by the Company or any Affiliate thereof to an Affiliate of
the Company, and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be written
representation) from the Company of the status, of such transferee as an
Affiliate of the Company or (ii) the prospective transferee of such a
Certificate shall be required to provide the Trustee, the Company and the Master
Servicer with an
A-4-3
investment letter substantially in the form of Exhibit G-1 attached to the
Agreement, which investment letter shall not be an expense of the Trustee, the
Company, or the Master Servicer, and which investment letter states that, among
other things, such transferee (A) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (B) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the 1933 Act provided by Rule 144A. The Holder of this Class
P Certificate desiring to effect any such transfer, sale, pledge or other
disposition shall, and does hereby agree to, indemnify the Trustee, the Company,
the Master Servicer and the Certificate Registrar against any liability that may
result if the transfer, sale, pledge or other disposition is not so exempt or is
not made in accordance with such federal and state laws and this Agreement.
No transfer of this Class P Certificate will be made unless the
Trustee has received either (i) an opinion of counsel satisfactory to the
Company, the Trustee and the Master Servicer, which opinion will not be at the
expense of the Company, the Trustee or the Master Servicer, that the purchase of
such Certificates by or on behalf of such Plan is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Company, the Trustee
or the Master Servicer to any obligation in addition to those undertaken in this
Agreement or (ii) a representation letter, in the form as described by the
Agreement, substantially to the effect that the purchase of this Certificate by
or on behalf of such Plan is permissible under applicable law will not subject
the Company, the Trustee or the Master Servicer to any obligation in addition to
those undertaken in this Agreement, and the following statements are correct:
(i) the transferee is an insurance company and the source of funds used to
purchase this Certificate is an "insurance company general account" (as such
term is defined in ▇▇▇▇ ▇▇-▇▇), (▇▇) the conditions set forth in Sections I and
III of PTCE 95-60 have been satisfied and (iii) there is no Plan with respect to
which the amount of such general accounts 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 exceed 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 Certificate.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as WMC Mortgage Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
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 Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes other than distributions to Certificateholders,
such purposes including without limitation reimbursement to the Company and the
Master Servicer of certain expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master
A-4-4
Servicer and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Company, the Master Servicer and the Trustee with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66% of the Percentage Interests of each Class of Certificates affected
thereby. 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 thereon. The
Agreement also permits the amendment thereof in certain circumstances without
the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, 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 in the City and
State of New York, 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 authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, 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 neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders 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 Aggregate Certificate Principal Balance
has been reduced to zero, (ii) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (iii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in
A-4-5
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan 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 may only
be exercised on any Distribution Date when the Pool Principal Balance is less
than ten percent of the sum of the Pool Principal Balance as of the Initial
Cut-off Date and the Original Pre-Funded Amount.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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.
A-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Certificate Registrar
By:______________________________________
Authorized Signatory
A-4-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within WMC Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration 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 denomination 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
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.
A-4-8
EXHIBIT B
FORM OF CLASS [R-I][R-II][R-III] CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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").
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 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.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(E) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO
ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER
AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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, (B) 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, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2)
NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND
(3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY 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
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
B-2
Class [R-I][R-II][R-III] Certificate No. ___
Residual
Date of Pooling and Servicing Percentage Interest: ________%
Agreement and Cut-off Date:
September 30, 1999
First Distribution Date:
November 15, 1999
Master Servicer:
WMC Mortgage Corp.
WMC MORTGAGE PASS-THROUGH CERTIFICATE
Series 1999-A
evidencing a percentage interest in any distributions allocable
to the Class [R-I][R- II][R-III] Certificates with respect to the
Trust Fund consisting primarily of a pool of closed end,
adjustable rate and fixed rate, one- to four-family, first lien,
sub-prime mortgage loans sold by WMC SECURED ASSETS CORP.
This Certificate is payable solely from the assets of the Trust Fund
and does not represent an obligation of or interest in WMC Secured Assets Corp.,
the Master Servicer, the Trustee referred to below or any of their Affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by WMC Secured Assets
Corp., the Master Servicer, the Trustee or any of their Affiliates. None of the
Company, the Master Servicer or any of their Affiliates will have any obligation
with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that WMC Secured Assets Corp. is the registered owner
of the Percentage Interest evidenced by this Certificate (as specified above) in
certain distributions with respect to the Trust Fund consisting primarily of a
pool of closed end, adjustable rate and fixed rate, one- to four-family, first
lien, sub-prime mortgage loans (the "Mortgage Loans") sold to the Trust Fund by
WMC Secured Assets Corp. (hereinafter called the "Company," which term includes
any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and Bank One, National
Association, as trustee (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.
B-3
Pursuant to the terms of the Agreement, a distribution will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of required to be distributed to Holders of Class
[R-I][R-II][R-III] Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Holder of
this Certificate may have additional obligations with respect to this
Certificate, including tax liabilities.
No transfer, sale, pledge or other disposition of this Class
[R-I][R-II][R-III] Certificate shall be made unless such transfer, sale, pledge
or other 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 said Act and laws. Except as
otherwise provided in Section 5.02(d) of the Agreement, in the event that a
transfer of this Class [R- I][R-II][R-III] Certificate is to be made either
(i)(A) the Trustee shall require a written Opinion of Counsel acceptable to and
in form and substance satisfactory to the Trustee and the Company that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer; provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Company or any Affiliate thereof to an Affiliate of the
Company and (B) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 to the
Agreement, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of Exhibit H to the Agreement,
each acceptable to and in form and substance satisfactory to the Company and the
Trustee certifying to the Company and the Trustee the facts surrounding such
transfer, which representation letters shall not be an expense of the
B-4
Trustee, the Company or the Master Servicer; provided, however, that such
representation letters will not be required in connection with any transfer of
any such Certificate by the Company or any Affiliate thereof to an Affiliate of
the Company, and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be written
representation) from the Company of the status, of such transferee as an
Affiliate of the Company or (ii) the prospective transferee of such a
Certificate shall be required to provide the Trustee, the Company and the Master
Servicer with an investment letter substantially in the form of Exhibit G-1
attached to the Agreement, which investment letter shall not be an expense of
the Trustee, the Company, or the Master Servicer, and which investment letter
states that, among other things, such transferee (A) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A, and (B) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the 1933 Act provided by Rule
144A. The Holder of this Class [R-I][R-II][R-III] Certificate desiring to effect
any such transfer, sale, pledge or other disposition shall, and does hereby
agree to, indemnify the Trustee, the Company, the Master Servicer and the
Certificate Registrar against any liability that may result if the transfer,
sale, pledge or other disposition is not so exempt or is not made in accordance
with such federal and state laws and this Agreement.
No transfer of this Class [R-I][R-II][R-III] Certificate will be made
unless the Trustee has received either (i) an opinion of counsel satisfactory to
the Company, the Trustee and the Master Servicer, which opinion will not be at
the expense of the Company, the Trustee or the Master Servicer, that the
purchase of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Company, the Trustee or the Master Servicer to any obligation in addition to
those undertaken in this Agreement or (ii) a representation letter, in the form
as described by the Agreement, substantially to the effect that the purchase of
this Certificate by or on behalf of such Plan is permissible under applicable
law will not subject the Company, the Trustee or the Master Servicer to any
obligation in addition to those undertaken in this Agreement, and the following
statements are correct: (i) the transferee is an insurance company and the
source of funds used to purchase such Certificate is an "insurance company
general account" (as such term is defined in ▇▇▇▇ ▇▇-▇▇), (▇▇) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied and (iii)
there is no Plan with respect to which the amount of such general accounts
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 exceed 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 stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as WMC Mortgage Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
B-5
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 Certificate Account
created for the benefit of Certificateholders may be made by the Master Servicer
from time to time for purposes other than distributions to Certificateholders,
such purposes including without limitation reimbursement to the Company and the
Master Servicer of certain expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. 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 thereon. The Agreement also permits the amendment
thereof in certain circumstances without the consent of the Holders of any of
the Certificates and, in certain additional circumstances, without the consent
of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, 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 in the City and
State of New York, 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 authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, 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 neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
B-6
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders 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 Aggregate Certificate Principal Balance
has been reduced to zero, (ii) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan, and (iii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from REMIC I
all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
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 may only be exercised on any Distribution Date when the Pool Principal
Balance is less than ten percent of the sum of the Pool Principal Balance as of
the Initial Cut-off Date and the Original Pre-Funded Amount.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purpose
have the same effect as if set forth at this place.
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.
B-7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:_____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [R-I][R-II][R-III] Certificates referred to
in the within-mentioned Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Certificate Registrar
By:_____________________________
Authorized Signatory
B-8
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________ (Please print or
typewrite name and address including postal zip code of assignee)
______________________________________ the beneficial interest evidenced by the
within WMC Mortgage Pass-Through Certificate and hereby authorizes the transfer
of registration 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 denomination 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
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.
B-9
EXHIBIT C-1
MORTGAGE LOAN SCHEDULE
[Available upon request]
C-1-1
EXHIBIT C-2
PREPAYMENT CHARGE SCHEDULE
[Available upon request]
C-2-1
EXHIBIT D
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage File described
below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
WMC Mortgage Corp.
Authorized Signature
****************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Mortgage Note
[ ] Mortgage
[ ] Assignment(s) of Mortgage
[ ] Title Insurance Policy
[ ] Other:
______________________________________
Name
______________________________________
Title
______________________________________
Date
D-1
EXHIBIT E-1
FORM OF INITIAL CERTIFICATION
WHEREAS, the undersigned is ______________________________________ of
Bank One, National Association, a national banking corporation, acting in its
capacity as trustee (the "Trustee") of a certain pool of mortgage loans (the
"Mortgage Loans") heretofore conveyed in trust to the Trustee, pursuant to that
certain Pooling and Servicing Agreement dated as of September 30, 1999 (the
"Pooling and Servicing Agreement") among WMC Secured Assets Corp., as Company,
WMC Mortgage Corp., as Master Servicer, and Bank One, National Association, as
Trustee; and
WHEREAS, the Trustee is required, pursuant to Section 2.02 of the
Pooling and Servicing Agreement, to review the Files relating to the Mortgage
Loans within a specified period following the Closing Date and to notify the
Master Servicer, the Seller and the Company promptly of any defects with respect
to the Mortgage Loans, and the Seller is required to remedy such defects or take
certain other action, all as contemplated in Section 2.02 of the Pooling and
Servicing Agreement; and
WHEREAS, Section 2.02 of the Pooling and Servicing Agreement requires
the Trustee to deliver this Initial Certification upon the satisfaction of
certain conditions set forth therein.
NOW, THEREFORE, the Trustee hereby certifies that it has determined
that all required documents listed in Section 2.01(b) of the Pooling and
Servicing Agreement have been received, and that such documents relate to the
Mortgage Loans identified in the Initial Mortgage Loan Schedule.
BANK ONE, NATIONAL ASSOCIATION, as Trustee
By:______________________________________
Name:
Title:
EXHIBIT E-2
FORM OF INTERIM CERTIFICATION
________ __, 199_
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of September 30,
1999 among WMC Secured Assets Corp., as Company, WMC
Mortgage Corp., as Master Servicer, and Bank One, National
Association, as Trustee, regarding WMC Mortgage Pass-through
Certificates, Series 1999-A
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan Listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan listed on the exceptions report
attachment hereto), it has reviewed the documents delivered to it pursuant to
the Pooling and Servicing Agreement and has determined that (i) all documents
required to be delivered to it pursuant to the above referenced Pooling and
Servicing Agreement are in its possession and relate to the Mortgage Loan
identified in the Mortgage Loan Schedule and (ii) each such document has been
reviewed by it and appears regular on its face, appears to bear original
signatures, and has not been mutilated, damaged, torn or otherwise physically
altered and relates to such Mortgage Loan. The Trustee has made no independent
examination of such documents beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations or warranties as to: (i) the validity, legality, enforceability
or genuineness of any such documents contained in each Mortgage File or any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above captioned Pooling and Servicing
Agreement.
BANK ONE, NATIONAL ASSOCIATION, as Trustee
By:_________________________________
Name:
Title:
EXHIBIT E-3
FORM OF FINAL CERTIFICATION
________ __, 199_
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of September 30,
1999 among WMC Secured Assets Corp., as Company, WMC
Mortgage Corp., as Master Servicer, and Bank One, National
Association, as Trustee, regarding WMC Mortgage Pass-through
Certificates, Series 1999-A
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan Listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan listed on the exceptions report
attachment hereto), it has reviewed the documents delivered to it pursuant to
the Pooling and Servicing Agreement and has determined that (i) all documents
required to be delivered to it pursuant to the above referenced Pooling and
Servicing Agreement are in its possession and relate to the Mortgage Loans
identified in the Mortgage Loan Schedule and (ii) each such document has been
reviewed by it and appears regular on its face, appears to bear original
signatures, and has not been mutilated, damaged, torn or otherwise physically
altered and relates to such Mortgage Loan. The Trustee has made no independent
examination of such documents beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations or warranties as to: (i) the validity, legality, enforceability
or genuineness of any such documents contained in each Mortgage File or any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above captioned Pooling and Servicing
Agreement.
BANK ONE, NATIONAL ASSOCIATION, as Trustee
By:___________________________
Name:
Title:
EXHIBIT F-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he/she is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the WMC Mortgage Pass-Through Certificates, Series 1999-A
Class [R-I][R-II][R-III] (the "Owner")), a [savings institution] [corporation]
duly organized and existing under the laws of [the State of ] [the United
States], on behalf of which he/she makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class [R-I][R-II][R-III] Certificates, and
(iii) is acquiring the Class [R-I][R-II][R-III] Certificates for its own account
or for the account of another Owner from which it has received an affidavit and
agreement in substantially the same form as this affidavit and agreement. (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. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class [R-I][R-II][R-III] Certificates to disqualified organizations
under the Code, that applies to all transfers of Class [R-I][R-II][R-III]
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 disqualified organization, 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 not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the affidavit is
false; and (iv) that the Class [R-I][R-II][R-III] Certificates may be
"noneconomic residual interests" within the meaning of Treasury regulations
promulgated pursuant to 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
was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class [R-I][R-II][R-III] Certificates if at any time during the
taxable year of the pass-through entity a disqualified organization 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. That the Owner is aware that the Trustee will not register the
transfer of any Class [R-I][R-II][R-III] Certificates unless the transferee, or
the transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. 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. That the Owner has reviewed the restrictions set forth on the face
of the Class [R- I][R-II][R-III] Certificates and the provisions of Section
5.02(f) of the Pooling and Servicing Agreement under which the Class R
Certificates were issued (in particular, clause (iii)(A) and (iii)(B) of Section
5.02(f) 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 the Owner
holds such Certificates in violation of Section 5.02(f)). The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
7. That 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-I][R-II][R-III]
Certificates will only be owned, directly or indirectly, by an Owner that is not
a disqualified organization.
8. The Owner's Taxpayer Identification Number is .
9. This affidavit and agreement relates only to the Class
[R-I][R-II][R-III] Certificates held by the Owner and not to any other holder of
the Class [R-I][R-II][R-III] Certificates. The Owner understands that the
liabilities described herein relate only to the Class [R-I][R-II][R-III]
Certificates.
10. That no purpose of the Owner relating to the transfer of any of
the Class [R-I][R- II][R-III] Certificates by the Owner is or will be to impede
the assessment or collection of any tax.
11. That 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. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class
[R-I][R-II][R-III] Certificate that the Owner intends to pay taxes associated
with holding such Class R Certificate as they become due, fully understanding
that it may incur tax liabilities in excess of any cash flows generated by the
Class [R-I][R-II][R-III] Certificate.
12. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Class [R-I][R-II][R-III] Certificates remain outstanding.
F-1-2
13. 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 (except, in the
case of a partnership, to the extent provided in regulations) or an estate whose
income is subject to United States federal income tax regardless of its source,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such United
States Persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
I of subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a United
States person notwithstanding the previous sentence.
14. Either (a) or (b) is satisfied, as marked below:
a. Purchaser is not any employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the Internal Revenue Code of 1986 (the "Code"), a Person acting,
directly or indirectly, on behalf of any such plan or any Person
acquiring such Certificates with "plan assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R.
ss.2510.3-101; or
b. Purchaser will provide the Trustee, the Company and the Master
Servicer with either: (i) an opinion of counsel, satisfactory to the
Trustee, the Company and the Master Servicer, to the effect that the
purchase and holding of a Certificate by or on behalf of the Purchaser
is permissible under applicable law, will not constitute or result in
a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code (or comparable provisions of any subsequent enactments) and
will not subject the Trustee, the Company or the Master Servicer to
any obligation or liability (including liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the
Pooling and Servicing Agreement, which opinion of counsel shall not be
an expense of the Trustee, the Company or the Master Servicer; or (ii)
in lieu of such opinion of counsel, a certification in the form of
Exhibit G-2 to the Pooling and Servicing Agreement.
F-1-3
15. The Purchaser is not a non-United States person or an electing
large partnership within the meaning of section 775(a) of the Code.
[16. The Owner of the Class R-III Certificate, hereby agrees that in
the event that the Trust Fund created by the Pooling and Servicing
Agreement is terminated pursuant to Section 9.01 thereof, the undersigned
shall assign and transfer to the Holders of the Class CE Certificates any
amounts in excess of par received in connection with such termination.
Accordingly, in the event of such termination, the Trustee is hereby
authorized to withhold any such amounts in excess of par and to pay such
amounts directly to the Holders of the Class CE Certificates. This
agreement shall bind and be enforceable against any successor, transferee
or assigned of the undersigned in the Class R-III Certificate. In
connection with any transfer of the Class R-III Certificate, the Owner
shall obtain an agreement substantially similar to this clause from any
subsequent owner.]
Very truly yours,
________________________________
By:
Name:
Title:
F-1-4
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 [Title of Officer] and its corporate seal to be hereunto attached, attested
by its Assistant] Secretary, this ____ day of _______________, 199__.
[NAME OF OWNER]
By:____________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
____________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that he
executed the same as his 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 the ______
day of _______________, 19__.
F-1-5
EXHIBIT F-2
FORM OF TRANSFEROR CERTIFICATE
__________________, 19__
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank One, National Association
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: WMC Mortgage Pass-Through Certificates,
Series 1999-A, Class [R-I][R-II][R-III]
---------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________________ (the "Seller") to _________________________________
(the "Purchaser") of ___% Percentage Interest of WMC Mortgage Pass-Through
Certificates, Series 1999-A, Class [R-I][R-II][R-III] (the "Certificates"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement"), dated as of September 30, 1999, among WMC Secured
Assets Corp., as company (the "Company"), WMC Mortgage Corp., as master
servicer, and Bank One, National Association, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Master Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit F-1. The Seller does not know
or believe that any representation contained therein is false.
3. The Seller, at the time of the transfer, 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 Seller has determined that the Purchaser has historically
paid its debts as they become 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 Seller understands that the transfer of a Class
[R-I][R-II][R-III] Certificate may not be respected for United
States income tax purposes (and the Seller may continue to be liable for United
States income taxes associated therewith) unless the Seller has conducted such
an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is not
both a United States Person and a Permitted Transferee.
Very truly yours,
________________________________
(Seller)
By:_____________________________
Name:___________________________
Title:__________________________
F-2-2
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
______________, 19__
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank One, National Association
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: WMC Mortgage Pass-Through Certificates,
Series 1999-A, Class [R-I][R-II][R-III]
---------------------------------------
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") ___% Percentage Interest of WMC
Mortgage Pass- Through Certificates, Series 1999-A, Class ___ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of September 30, 1999 among WMC
Secured Assets Corp., as company (the "Company"), WMC Mortgage Corp., as master
servicer, and Bank One, National Association, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Purchaser hereby certifies, represents
and warrants to, and covenants with, the Company and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the Certificates
may be resold only if registered and qualified pursuant to the provisions
of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the Certificates
and (e) the Certificates will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and, in particular, in such matters related to securities similar
to the Certificates, such that it is capable of evaluating the merits and
risks of investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity
to review (a) a copy of the Prospectus Supplement, dated _______________,
19__, to the Prospectus, dated ___________, 19___ (collectively, the
"Prospectus") relating to the Certificates (b) a copy of the Pooling and
Servicing Agreement and (c) such other information concerning the
Certificates, the Mortgage Loans and the Company as has been requested by
the Purchaser from the Company or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser has had
any questions arising from such review answered by the Company or the
Seller to the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the
Prospectus relating to the original sale (the "Original Sale") of the
Certificates by the Company, the Purchaser acknowledges that such
Prospectus was provided to it by the Seller, that the Prospectus was
prepared by the Company solely for use in connection with the Original Sale
and the Company did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and not to the
Company with respect to any damage, liability, claim or expense arising out
of, resulting from or in connection with (a) error or omission, or alleged
error or omission, contained in the Prospectus, or (b) any information,
development or event arising after the date of the Prospectus.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any offer to buy
or to accept a pledge, disposition of other transfer of any Certificate,
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approach or negotiate with respect to
any Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general solicitation
by means of general advertising or in any other manner or (e) take any
other action, that (as to any of (a) through (e) above) would constitute a
distribution of any Certificate under the Act, that would render the
disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of
the Certificates, except in compliance with the provisions of the Pooling
and Servicing Agreement.
6. The Purchaser represents that either (a) or (b) is satisfied, as
marked below:
G-1-2
a. is not any employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
Internal Revenue Code of 1986 (the "Code"), a Person acting, directly
or indirectly, on behalf of any such plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-
101; or
b. will provide the Trustee, the Company and the Master Servicer
with either: (i) an opinion of counsel, satisfactory to the Trustee,
the Company and the Master Servicer, to the effect that the purchase
and holding of a Certificate by or on behalf of the Purchaser is
permissible under applicable law, will not constitute or result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code (or comparable provisions of any subsequent enactments) and
will not subject the Trustee, the Company or the Master Servicer to
any obligation or liability (including liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the
Pooling and Servicing Agreement, which opinion of counsel shall not be
an expense of the Trustee, the Company or the Master Servicer; or (ii)
in lieu of such opinion of counsel, a certification in the form of
Exhibit G-2 to the Pooling and Servicing Agreement.
7. The Purchaser is not a non-United States person or an electing
large partnership within the meaning of section 775(a) of the Code.
Very truly yours,
____________________________
By:
Name:
Title:
G-1-3
EXHIBIT G-2
FORM OF ERISA REPRESENTATION LETTER
____________________________
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WMC Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank One, National Association
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Wmc Mortgage Pass-Through Certificates, Series 1999-A, Class_____
-----------------------------------------------------------------
Dear Sirs:
__________________________ (the "Purchaser") intends to purchase from
_________________________ (the "Seller") $_______________ initial Certificate
Principal Balance of WMC Mortgage Pass-Through Certificates, Series 1999-A,
Class _____________________________________ (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the"Pooling and Servicing
Agreement"), dated as of September 30, 1999, among WMC Secured Assets Corp., as
company (the "Company"), WMC Mortgage Corp., as master servicer (the "Master
Servicer") and Bank One, National Association, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Purchaser hereby certifies, represents
and warrants to, and covenants with the Company, 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, 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 Company, the Trustee or the
Master Servicer to any obligation in addition to those undertaken in the
Pooling and Servicing Agreement and, with respect to each source of funds
("Source") being used by the Purchaser to acquire the Certificates, each of
the following statements are accurate: (a) the Purchaser is an insurance
company; (b) the Source is assets of the Purchaser's "general account;" (c)
the conditions set forth in Sections I and III of Prohibited Transaction
Class Exemption ("PTCE") 95-60 issued by the DOL have been satisfied and
the purchase, holding and transfer of Certificates by or on behalf of the
Purchaser are exempt under PTCE 95-60; and (d) the amount of reserves and
liabilities for such general account contracts held by or on behalf of any
Plan do not exceed 10% of the total reserves and liabilities of such
general account plus surplus as of the date hereof (for purposes of this
clause, all Plans maintained by the same employer (or affiliate thereof) or
employee organization are deemed to be a single Plan) in connection with
its purchase and holding of such Certificates.
Very truly yours,
[Purchaser]
_____________________________________
By:____________________________
Name:
Title:
G-2-2
EXHIBIT H
FORM OF TRANSFEROR REPRESENTATION LETTER
_______, 19__
WMC Secured Assets Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank One, National Association
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: WMC Mortgage Pass-Through Certificates,
Series 1999-A, Class [CE][P][R-I][R-II][R-III]
----------------------------------------------
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the "Purchaser")
___% Percentage Interest of WMC Mortgage Pass-Through Certificates, Series
1999-A, Class (the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of September 30,
1999 among WMC Secured Assets Corp., as company (the "Company"), WMC Mortgage
Corp., as master servicer, and Bank One, National Association, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller 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, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in any
manner
set forth in the foregoing sentence with respect to any Certificate. The Seller
has not and will not sell or otherwise transfer any of the Certificates, except
in compliance with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
____________________________
(Seller)
By:___________________________
Name:
Title:
H-2
EXHIBIT I
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling and
Servicing Agreement (the "Agreement")), dated as of September 30, 1999 among WMC
Mortgage Corp., as Master Servicer, WMC Secured Assets Corp. as company and Bank
One, National Association as trustee, pursuant to Section 5.02 of the Agreement,
as follows:
a. The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
I-1
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the Seller,
the Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would
render the disposition of the Rule 144A Securities a violation of Section 5
of the 1933 Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has completed either of
the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. The Buyer is aware that the sale to it is being made in reliance
on Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities 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.
3. The Buyer represents that either (a) or (b) is satisfied, as marked
below:
_____ a. is not any employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
Internal Revenue Code of 1986 (the "Code"), a Person acting, directly or
indirectly, on behalf of any such plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101; or
_____ b. will provide the Trustee, the Company and the Master
Servicer with either: (i) an opinion of counsel, satisfactory to the
Trustee, the Company and the Master Servicer, to the effect that the
purchase and holding of a Certificate by or on behalf of the Buyer is
permissible under applicable law, will not constitute or result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code and will not subject the Trustee, the Company or the Master Servicer
to any obligation or liability in addition to those undertaken in the
Pooling and Servicing Agreement, which opinion of counsel shall not be an
expense of the Trustee, the Company or the Master Servicer; or (ii) in lieu
of such opinion
I-2
of counsel, a certification in the form of Exhibit G-2 to the Pooling and
Servicing Agreement.
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
_____________________________ _______________________________
Print Name of Seller Print Name of Buyer
By:__________________________ By:____________________________
Name: Name:
Title: Title:
Taxpayer Identification: No._____ Taxpayer Identification: No.
Date:_________________ Date:__________________________
I-3
ANNEX 1 TO EXHIBIT I
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (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.
I-4
___ SAVINGS AND LOAN. The Buyer (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.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
___ STATE OR LOCAL PLAN. The Buyer 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 Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans 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, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (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.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in
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determining such aggregate amount, the Buyer may have included securities owned
by subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities Exchange
Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it 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 Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer 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 Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer 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 Buyer 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 Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
_____________________________
Print Name of Buyer
By:____________________________________
Name:
Title:
Date:___________________________________
I-6
ANNEX 2 TO EXHIBIT I
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer'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 Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer 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 Buyer'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 Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
I-7
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_____________________________
Print Name of Buyer
By:_____________________________
Name:______________________
Title:__________________________
IF AN ADVISER:
________________________________
Print Name of Buyer
Date:___________________________
I-8
EXHIBIT J
FORM OF SUBSEQUENT TRANSFER AGREEMENT
Pursuant to this Subsequent Transfer Agreement (the "Agreement"),
dated __________, 1999, between WMC Secured Assets Corp., as company (the
"Company") WMC Mortgage Corp., as Seller and Master Servicer (the "Seller"), and
Bank One, National Association, as Trustee of the WMC Mortgage Pass-Through
Certificates, Series 1999-A, as purchaser (the "Trustee"), and pursuant to the
Pooling and Servicing Agreement, dated as of September 30, 1999, by and among
the Company, the Master Servicer and the Trustee (the "Pooling and Servicing
Agreement"), the Company and the Trustee agree to the sale by Seller and the
purchase by the Company and the sale by the Company and the purchase by the
Trustee, on behalf of the Trust Fund, of the Mortgage Loans listed on the
attached Schedule of Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used and not defined herein have their respective
meanings as set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Seller does hereby sell, transfer, assign, set over and convey
to the Company and the Company does hereby sell, transfer, assign, set over and
convey to the Trustee, on behalf of the Trust Fund, without recourse, all of its
right, title and interest in and to the Subsequent Mortgage Loans, including all
interest due and principal received with respect to the Subsequent Mortgage
Loans after the related Subsequent Cut-Off Date, and all items with respect to
the Subsequent Mortgage Loans to be delivered pursuant to Section 2.01 of the
Pooling and Servicing Agreement; provided, however that the Seller reserves and
retains all right, title and interest in and to interest due and principal
received (including Prepayments and Curtailments) due on the Subsequent Mortgage
Loans on or prior to the related Subsequent Cut-off Date. The Seller and the
Company, contemporaneously with the delivery of this Agreement, have delivered
or caused to be delivered to the Trustee each item set forth in Section 2.01 of
the Pooling and Servicing Agreement. The transfer to the Company by the Seller
and to the Trustee by the Company of the Subsequent Mortgage Loans identified on
the Mortgage Loan Schedule shall be absolute and is intended by the Company, the
Seller, the Master Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale by the Seller to the Company and the
Company to the Trust Fund.
(b) The expenses and costs relating to the delivery of the Subsequent
Mortgage Loans, this Agreement and the Pooling and Servicing Agreement shall be
borne by the Seller.
(c) Additional terms of the sale are set forth on Attachment A hereto.
The Subsequent Cut-off Date for each of the Subsequent Mortgage Loans being
transferred pursuant to this Agreement is set forth on Attachment A hereto.
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.
(a) The Seller hereby reaffirms the representations and warranties set
forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement with respect to
the Subsequent Mortgage Loans as of the related Subsequent Cut-off Date. The
Seller hereby confirms that each of the conditions set forth in Section 2.1(c)
of the Mortgage Loan Purchase Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement
and the Mortgage Loan Purchase Agreement are hereby ratified and confirmed;
provided, however, that in the event of any conflict the provisions of this
Agreement shall control over the conflicting provisions of the Pooling and
Servicing Agreement and the Mortgage Loan Purchase Agreement.
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Agreement, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of 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 Certificateholders' expense on direction of the
Certificateholders entitled to at least 25% of the Voting Rights, but only when
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders or
is necessary for the administration or servicing of the Mortgage Loans.
Section 4. GOVERNING LAW.
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, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
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Section 6. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
Seller, the Company and the Trustee and their respective successors and assigns.
WMC SECURED ASSETS CORP.
as Company
By:_____________________________
Name:
Title:
WMC MORTGAGE CORP.
as Seller
By:_____________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:_____________________________
Name:
Title:
Attachments
-----------
A. Additional terms of the sale.
B. Schedule of Subsequent Mortgage Loans.
J-3
WMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-A
ATTACHMENT A TO SUBSEQUENT TRANSFER AGREEMENT
Series 1999-A
__________, 1999
A.
1. Subsequent Cut-off Date: __________, 1999
2. Subsequent Transfer Date: __________, 1999
3. Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Dat $_______________
4. Purchase Price: 100.00%
B.
As to the final transfer of Subsequent Mortgage Loans:
1. Weighted average gross margin:
2. Weighted average LTV:
3. Highest LTV:
4. % of 2/28 Loans:
5. % of 3/27 Loans:
6. % of 5/25 Loans:
7. % of Fixed Rate Mortgage Loans:
8. Non-owner occupied Mortgaged Properties:
9. % located in California:
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EXHIBIT K
ADDITION NOTICE
__________, 1999
Bank One, National Association
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Duff & ▇▇▇▇▇▇ Credit Rating Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of September 30,
1999 (the "Pooling and Servicing Agreement"), by and among
WMC Secured Assets Corp., as Company, WMC Mortgage Corp., as
Master Servicer and Bank One, National Association, as
Trustee, relating to WMC Mortgage Pass- Through
Certificates, Series 1999-A
------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.09 of the Pooling and Servicing Agreement, the
Company has designated Subsequent Mortgage Loans to be sold to the Trust Fund on
__________, 1999, with an aggregate principal balance of $__________.
Capitalized terms not otherwise defined herein have the meaning set forth in the
Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
WMC SECURED ASSETS CORP.,
Company
By:_____________________________
Name:
Title:
WMC MORTGAGE CORP.,
Seller and Master Servicer
By:_____________________________
Name:
Title:
K-2
ACKNOWLEDGED AND AGREED:
BANK ONE, NATIONAL ASSOCIATION
By:___________________________
Name:
Title:
Date:
K-3
EXHIBIT L
FORM OF LOST NOTE AFFIDAVIT
STATE OF ___________________ )
) ss.:
COUNTY OF _____________ )
_____________________, being duly sworn, deposes and says:
That s/he is a ______________ of ______________________________
(the "Company");
That, after having conducted a diligent investigation in its
records and files, the Company has been unable to locate the following original
note and believes that said original note has either been lost, misfiled,
misplaced or destroyed:
A note in the original principal sum of $___________ made by
_________________________ to _________________________, and dated
__________, 19__.
That the records of the Company do not show that such note was
ever released, paid off, satisfied, assigned, transferred, pledged, hypothecated
or otherwise disposed of and that such note has been either lost, mislaid,
misfiled or destroyed by the Company;
That the Company is aware that the Trustee, for the benefit of
the Certificateholders, is relying upon the statements made herein as to such
note having been lost, mislaid, misfiled or destroyed by the Company and never
having been released, paid off, satisfied, assigned, transferred, pledged,
hypothecated or otherwise disposed of;
In the event that the Company should ever locate said mortgage
note, the Company agrees to provide said note to the Trustee, for the benefit of
the Certificateholders; and
The Company hereby indemnifies and holds the Trustee and the
Trust Fund harmless from and against any and all losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from the Company's
breach of any covenant, representation or warranty contained herein or based
upon the loss, misplacement or destruction of the lost note.
Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Pooling and Servicing Agreement dated as of
September 30, 1999 among the Company, the Trustee and WMC Mortgage Corp.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on behalf of the Company, this ____ day of ______________, 199__.
________________________________
By:_____________________________
Name:___________________________
Title:__________________________
STATE OF _________ )
) SS.
COUNTY OF _________ )
On the ______ day of ________, 199__ before me, a Notary Public
in and for said State, personally appeared _______________ known to me to be
_____________________ of ______________, the company that executed the within
instrument and also known to me to be the person who executed it on behalf of
said company, and acknowledged to me that such company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my
official seal the day and year first above written.
_____________________________
Notary Public
My Commission expires ________
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