EXECUTION
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer,
and
FIRST UNION NATIONAL BANK, as Trustee
___________________________
TRUST AGREEMENT
Dated as of October 1, 1997
___________________________
STRUCTURED ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1997-2
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.02. Calculations Respecting Mortgage Loans . . . . . . . . . . . . . . 36
1.03. Calculations Respecting Accrued Interest . . . . . . . . . . . . . 37
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
2.01. Creation and Declaration of Trust Fund;
Conveyance of Mortgage Loans . . . . . . . . . . . . . . . . . . . 37
2.02. Acceptance of Trust Fund by Trustee:
Review of Documentation for Trust Fund . . . . . . . . . . . . . . 40
2.03. Representations and Warranties of the Depositor . . . . . . . . . 42
2.04. Discovery of Breach . . . . . . . . . . . . . . . . . . . . . . . 44
2.05. Repurchase, Purchase or Substitution of
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.06. Grant Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE III
THE CERTIFICATES
3.01. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.02. Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.03. Transfer and Exchange of Certificates . . . . . . . . . . . . . . 47
3.04. Cancellation of Certificates . . . . . . . . . . . . . . . . . . . 50
3.05. Replacement of Certificates . . . . . . . . . . . . . . . . . . . 50
3.06. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 51
3.07. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . 51
3.08. Appointment of Paying Agent . . . . . . . . . . . . . . . . . . . 51
3.09. Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
4.01. Collection Account . . . . . . . . . . . . . . . . . . . . . . . . 54
4.02. Application of Funds in the Collection Account . . . . . . . . . . 56
4.03. Reports to Certificateholders . . . . . . . . . . . . . . . . . . 58
4.04. Certificate Account . . . . . . . . . . . . . . . . . . . . . . . 61
4.05. Determination of LIBOR . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
5.01. Distributions Generally . . . . . . . . . . . . . . . . . . . . . 63
5.02. Distributions from the Certificate Account . . . . . . . . . . . . 64
5.03. Allocation of Realized Losses . . . . . . . . . . . . . . . . . . 70
5.04. Advances by Master Servicer and Trustee . . . . . . . . . . . . . 72
5.05. Distributions of Principal on Redemption
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.06. Compensating Interest Payments . . . . . . . . . . . . . . . . . . 79
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 79
6.02. Certain Matters Affecting the Trustee . . . . . . . . . . . . . . 80
6.03. Trustee Not Liable for Certificates . . . . . . . . . . . . . . . 82
6.04. Trustee May Own Certificates . . . . . . . . . . . . . . . . . . . 82
6.05. Eligibility Requirements for Trustee . . . . . . . . . . . . . . . 82
6.06. Resignation and Removal of Trustee . . . . . . . . . . . . . . . . 82
6.07. Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . 83
6.08. Merger or Consolidation of Trustee . . . . . . . . . . . . . . . . 84
6.09. Appointment of Co-Trustee, Separate
Trustee or Custodian . . . . . . . . . . . . . . . . . . . . . . . 84
6.10. Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . 86
6.11. Indemnification of Trustee . . . . . . . . . . . . . . . . . . . . 87
6.12. Fees and Expenses of Trustee . . . . . . . . . . . . . . . . . . . 88
6.13. Collection of Monies . . . . . . . . . . . . . . . . . . . . . . . 88
6.14. Trustee To Act; Appointment of Successor . . . . . . . . . . . . . 88
6.15. Additional Remedies of Trustee Upon
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.16. Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 93
6.17. Notification to Holders . . . . . . . . . . . . . . . . . . . . . 93
6.18. Directions by Certificateholders and
Duties of Trustee During Event of Default . . . . . . . . . . . . 94
6.19. Action Upon Certain Failures of the
Master Servicer and Upon Event of Default . . . . . . . . . . . . 94
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
7.01. Termination of Trust Fund Upon Repurchase
or Liquidation of All Mortgage Loans . . . . . . . . . . . . . . . 95
7.02. Procedure Upon Termination of Trust Fund . . . . . . . . . . . . . 95
7.03. Additional Trust Fund Termination Requirements . . . . . . . . . . 96
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
8.01. Limitation on Rights of Holders . . . . . . . . . . . . . . . . . 97
8.02. Access to List of Holders . . . . . . . . . . . . . . . . . . . . 98
8.03. Acts of Holders of Certificates . . . . . . . . . . . . . . . . . 99
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
9.01. Duties of the Master Servicer . . . . . . . . . . . . . . . . . . 100
9.02. Master Servicer Fidelity Bond and
Master Servicer Errors and Omissions
Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . 100
9.03. Master Servicer's Financial Statements
and Related Information . . . . . . . . . . . . . . . . . . . . . 101
9.04. Power to Act; Procedures . . . . . . . . . . . . . . . . . . . . . 102
9.05. Servicing Agreements Between the Master
Servicer and Servicers; Enforcement of
Servicers' Obligations . . . . . . . . . . . . . . . . . . . . . . 104
9.06. Collection of Taxes, Assessments and
Similar Items . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.07. Termination of Servicing Agreements;
Successor Servicers . . . . . . . . . . . . . . . . . . . . . . . 105
9.08. Master Servicer Liable for Servicing . . . . . . . . . . . . . . . 105
9.09. No Contractual Relationship Between
Servicers and Trustee or Depositor . . . . . . . . . . . . . . . . 106
9.10. Assumption of Servicing Agreement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
9.11. "Due-on-Sale" Clauses; Assumption
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
9.12. Release of Mortgage Files . . . . . . . . . . . . . . . . . . . . 107
9.13. Documents, Records and Funds in
Possession of Master Servicer To Be
Held for Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 108
9.14. Representations and Warranties of the
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 110
9.15. Closing Certificate and Opinion . . . . . . . . . . . . . . . . . 112
9.16. Standard Hazard and Flood Insurance
Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
9.17. Presentment of Claims and Collection of
Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
9.18. Maintenance of the Primary Mortgage
Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . 113
9.19. Trustee To Retain Possession of Certain
Insurance Policies and Documents . . . . . . . . . . . . . . . . . 114
9.20. Realization Upon Defaulted Mortgage
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
9.21. Compensation to the Master Servicer . . . . . . . . . . . . . . . 115
9.22. REO Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
9.23. Preparation of Tax Returns and Other
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.24. Reports to the Trustee . . . . . . . . . . . . . . . . . . . . . . 117
9.25. Annual Officer's Certificate as to
Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
9.26. Annual Independent Accountants'
Servicing Report . . . . . . . . . . . . . . . . . . . . . . . . . 118
9.27. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . 119
9.28. Resignation of Master Servicer . . . . . . . . . . . . . . . . . . 119
9.29. Assignment or Delegation of Duties by
the Master Servicer . . . . . . . . . . . . . . . . . . . . . . . 120
9.30. Limitation on Liability of the Master
Servicer and Others . . . . . . . . . . . . . . . . . . . . . . . 120
9.31. Indemnification; Third-Party Claims . . . . . . . . . . . . . . . 121
ARTICLE X
REMIC ADMINISTRATION
10.01. REMIC Administration . . . . . . . . . . . . . . . . . . . . . . 121
10.02. Prohibited Transactions and Activities . . . . . . . . . . . . . 123
10.03. Indemnification with Respect to Certain
Taxes and Loss of REMIC Status . . . . . . . . . . . . . . . . . 124
10.04. REO Property . . . . . . . . . . . . . . . . . . . . . . . . . . 124
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Binding Nature of Agreement; Assignment . . . . . . . . . . . . . 125
11.02. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 125
11.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
11.04. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 127
11.05. Provision of Information . . . . . . . . . . . . . . . . . . . . 127
11.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.07. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.08. Severability of Provisions . . . . . . . . . . . . . . . . . . . 128
11.09. Indulgences; No Waivers . . . . . . . . . . . . . . . . . . . . . 128
11.10. Headings Not To Affect Interpretation . . . . . . . . . . . . . . 129
11.11. Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . 129
11.12. Special Notices to the Rating Agencies. . . . . . . . . . . . . . 129
11.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 130
11.14. Transfer of Servicing . . . . . . . . . . . . . . . . . . . . . . 130
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited
Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Schedule A Mortgage Loan Schedule
Schedule B Principal Amount Schedules
This TRUST AGREEMENT, dated as of October 1, 1997 (the "Agreement"), is
by and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation,
as depositor (the "Depositor"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as master servicer (the "Master Servicer"), and FIRST UNION NATIONAL BANK, a
national banking association with its main office in Charlotte, North
Carolina, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from ▇▇▇▇▇▇ Capital, A
Division of ▇▇▇▇▇▇ Brothers Holdings Inc. (the "Seller"), and at the Closing
Date is the owner of the Mortgage Loans and the other property being conveyed
by it to the Trustee for inclusion in the Trust Fund. On the Closing Date,
the Depositor will acquire the Certificates from the Trust Fund, as
consideration for its transfer to the Trust Fund of the Mortgage Loans and
the other property constituting the Trust Fund. The Depositor has duly
authorized the execution and delivery of this Agreement to provide for the
conveyance to the Trustee of the Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by the
Depositor, the Master Servicer and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates. The Depositor
and the Master Servicer are entering into this Agreement, and the Trustee is
accepting the Trust Fund created hereby, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.
The following table sets forth the Class designation, Certificate
Interest Rate, initial Class Certificate Principal Amount and minimum
denomination for each Class of Certificates comprising the interests in the
Trust Fund created hereunder.
Initial Certificate Minimum
Class Designation Certificate Interest Rate Principal Amount Denominations
Class 1-A (1) $23,553,000.00 $100,000
Class 2-A1 7.250% 79,000,000.00 100,000
Class 2-A2 7.250% 7,325,000.00 100,000
Class 2-A3 7.250% 4,000,000.00 100,000
Class 2-A4 7.250% 13,000,000.00 100,000
Class 2-AP 0.000% 1,543,400.00 150,000
Class 2-AX 8.000% (3) (4)
Class B1 (2) 11,734,000.00 250,000
Class B2 (2) 3,611,000.00 250,000
Class B3 (2) 1,805,000.00 250,000
Class B4 (2) 1,502,000.00 250,000
Class B5 (2) 1,127,000.00 250,000
Class B6 (2) 2,023,892.18 250,000
Class R 7.250% 100.00 100
___________________________
(1) The Certificate Interest Rate with respect to any Distribution Date for
the Class 1-A Certificates is a per annum rate equal to the Pool 1 Rate
for such date.
(2) The Certificate Interest Rate with respect to any Distribution Date for
each Class of the Class B1, Class B2, Class B3, Class B4, Class B5 and
Class B6 Certificates is a per annum rate equal to the weighted average
of the Component Interest Rates for the Components of such Class for
such date, weighted on the basis of the Component Principal Amounts of
such Components immediately prior to such date.
(3) The Class 2-AX Certificates will accrue interest on a calculated
Aggregate Notional Amount equal, with respect to any Distribution Date,
to the product of (x) the fraction, the numerator of which is the excess
of the weighted average of the Net Mortgage Rates of the Pool 2 Premium
Mortgage Loans, weighted on the basis of the Scheduled Principal Balance
of such Mortgage Loans as of the first day of the related Interest
Accrual Period, over 7.250%, and the denominator of which is 8.000%, and
(y) the aggregate Scheduled Principal Balance of the Pool 2 Premium
Mortgage Loans as of the first day of the related Interest Accrual
Period.
(4) The Class 2-AX Certificates will be issued in minimum Percentage
Interests of 2.0%.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $150,224,392.18.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless
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the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
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those customary mortgage servicing practices of prudent mortgage servicing
institutions that service or master service mortgage loans of the same type
and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
Accountant: A person engaged in the practice of accounting who
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(except when this Agreement provides that an Accountant must be Independent)
may be employed by or affiliated with the Depositor or an Affiliate of the
Depositor.
Accretion Directed Certificate: None.
------------------------------
Accretion Termination Date: The earlier of (i) the Credit Support
--------------------------
Depletion Date and (ii) the date on which the Class Certificate Principal
Amount of each Class of Accretion Directed Certificates has been reduced to
zero.
Accrual Amount: As to any Class of Accrual Certificates and any
--------------
Accrual Component and each Distribution Date through the Credit Support
Depletion Date, the sum of (x) any amount of Accrued Certificate Interest
allocable to such Class or Component pursuant to Section 5.02(a)(ii) on such
Distribution Date and (y) any Interest Shortfall allocable to such Class or
Component pursuant to Section 5.02(a)(iii) on such Distribution Date. As to
any Class of Accrual Certificates and any Accrual Component and each
Distribution Date after the Credit Support Depletion Date, zero.
Accrual Certificate: None.
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Accrual Component: None.
-----------------
Accrued Certificate Interest: As to any Class of Certificates or
----------------------------
Component and any Distribution Date, the product of the Certificate Interest
Rate or Component Interest Rate for such Class of Certificates or Component
and the outstanding Class Certificate Principal Amount (or Aggregate Notional
Amount) or Component Principal Amount of such Class of Certificates or
Component immediately preceding such Distribution Date, as reduced by (i)
such Class's or Component's pro rata share of the interest portion of any
Excess Losses with respect to the related Mortgage Pool for such date and,
after the Credit Support Depletion Date for the related Certificate Group,
any Realized Losses with respect to the related Mortgage Pool for such date,
(ii) after the Credit Support Depletion Date for the related Certificate
Group, such Class's or Component's pro rata share of any Relief Act Reduction
with respect to the related Mortgage Pool for such date and (iii) any
Deferred Interest allocated to such Class on such date.
Additional Collateral: None.
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Adjustable Rate Mortgage Loan: None.
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Advance: An advance of the aggregate of payments of principal and
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interest (net of the Master Servicing Fee and the applicable Servicing Fee)
on one or more Mortgage Loans that were due on the Due Date in the related
Due Period and not received as of the close of business on the related
Determination Date, required to be made by or on behalf of the Master
Servicer and any Servicer (or by the Trustee) pursuant to Section 5.04.
Affiliate: With respect to any specified Person, any other Person
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controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Aggregate Master Servicing Compensation: As to any Distribution
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Date, the sum of (x) the aggregate of the Master Servicing Fees payable to
the Master Servicer in respect of such Distribution Date and (y) all income
and gain realized from the investment of funds in the Collection Account
during the period from and including the Deposit Date in the calendar month
immediately preceding the month in which such Distribution Date occurs, to
but excluding the Deposit Date relating to such Distribution Date.
Aggregate Notional Amount: With respect to the Class 2-AX
-------------------------
Certificates, the aggregate notional amount described in the Preliminary
Statement hereto.
Aggregate Principal Balance: The aggregate of the Scheduled
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Principal Balances for all Mortgage Loans at the date of determination.
Aggregate Voting Interests: The aggregate of the Voting Interests of
--------------------------
all the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
---------
hereto.
AP Percentage: As to any Pool 2 Discount Mortgage Loan, the
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percentage equivalent of the fraction, the numerator of which is the excess
of 7.250% over the Net Mortgage Rate of such Pool 2 Discount Mortgage Loan
and the denominator of which is 7.250%. As to any Pool 2 Non-Discount
Mortgage Loan, 0.000%.
Appraised Value: With respect to any Mortgage Loan, the amount set
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forth in an appraisal made in connection with the origination of such
Mortgage Loan as the value of the related Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
----------------------
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law; provided, however,
that the Trustee shall not be responsible for determining whether any such
assignment is in recordable form.
Authenticating Agent: Any authenticating agent appointed by the
--------------------
Trustee pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's
------------------
Certificate on behalf of the Depositor.
Available Distribution Amount: On any Distribution Date and with
-----------------------------
respect to each Mortgage Pool, the sum of the following amounts:
(1) the total amount of all cash received by the Master Servicer
through the related Latest Remittance Date and deposited by the Master
Servicer by the Deposit Date for such Distribution Date on the related
Mortgage Loans (including proceeds of any Insurance Policy and any other
credit support relating to such Mortgage Loans), plus all Advances made
by the Master Servicer or any Servicer (or the Trustee) for such
Distribution Date, any Compensating Interest Payment for such date and
any amounts paid by any Servicer in respect of Prepayment Interest
Shortfalls for such date, but not including:
(a) all amounts distributed pursuant to Section 5.02 on prior
Distribution Dates;
(b) all Scheduled Payments of principal and interest
collected but due on a date subsequent to the related Due Period;
(c) all Principal Prepayments received by the applicable
Servicer after the applicable Prepayment Period (together with any
interest payments received with such prepayments to the extent that
they represent the payment of interest accrued on the related
Mortgage Loans for the period subsequent to the applicable
Prepayment Period);
(d) any other unscheduled collection, including Liquidation
Proceeds and Insurance Proceeds, received by the Master Servicer
after the applicable Prepayment Period; and
(e) all amounts due or reimbursable to the Master Servicer or
any Servicer pursuant to the terms of this Agreement or the
applicable Servicing Agreement; and
(2) any other payment made by the Master Servicer, any Servicer,
the Seller, the Depositor or any other Person with respect to such
Distribution Date (including the Purchase Price with respect to any
Mortgage Loan in the related Mortgage Pool repurchased by the Seller,
the Depositor or any other Person and the purchase price for any
Converted Mortgage Loan purchased from the Trust Fund).
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
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maturity that is shorter than its amortization schedule, and a final
Scheduled Payment that is disproportionately large in comparison to other
Scheduled Payments.
Balloon Payment: The final Scheduled Payment in respect of a Balloon
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Mortgage Loan.
Bankruptcy: As to any Person, the making of an assignment for the
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benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in
a bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the United States
Bankruptcy Code of 1986, as amended, or any other similar state laws.
Bankruptcy Coverage Termination Date: As to each Mortgage Pool, the
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Distribution Date on which the related Bankruptcy Loss Limit has been reduced
to zero (or less than zero).
Bankruptcy Loss Limit: As to each Mortgage Pool and as of the
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Cut-off Date, $100,000, which amount shall be reduced from time to time by
the amount of Bankruptcy Losses allocated to the Certificates of the related
Certificate Group.
Bankruptcy Losses: (i) with respect to the Mortgage Loans in the
-----------------
related Mortgage Pool, losses arising from a proceeding under the United
States Bankruptcy Code or any other similar state law or other proceeding
with respect to the Mortgagor of or Mortgaged Property under a Mortgage Loan
in the related Mortgage Pool, including without limitation any such loss
arising from (a) the difference between (i) the principal amount that would
have been due under the original scheduled payments of principal and interest
due on the related Mortgage Loan and (ii) the value established in the
relevant court with respect to such Mortgaged Property, including without
limitation a Deficient Valuation, or (b) a Debt Service Reduction.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the
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Trustee to the effect that any proposed transfer will not (i) cause the
assets of the Trust Fund to be regarded as plan assets for purposes of the
Plan Asset Regulations or (ii) give rise to any fiduciary duty on the part of
the Depositor or the Trustee.
Blanket Mortgage: The mortgage or mortgages encumbering a
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Cooperative Property.
Book-Entry Certificates: Beneficial interests in Certificates
-----------------------
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a
Clearing Agency as described in Section 3.09; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are
no longer permitted and Definitive Certificates are to be issued to
Certificate Owners, such Book-Entry Certificates shall no longer be
"Book-Entry Certificates." As of the Closing Date, the following Classes of
Certificates constitute Book-Entry Certificates: the Class 1-A, Class 2-A1,
Class 2-A2, Class 2-A3, Class 2-A4, Class 2-AP, Class 2-AX, Class B1, Class
B2 and Class B3 Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a
------------
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the State of Maryland, or (iii) with respect to any Remittance Date or any
Servicer reporting date, the States specified in the definition of "Business
Day" in the applicable Servicing Agreement, are authorized or obligated by
law or executive order to be closed.
Certificate: Any one of the certificates signed and countersigned by
-----------
the Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in
-------------------
accordance with the provisions of Section 4.04.
Certificate Group: The Group 1 Certificates or the Group 2
-----------------
Certificates, as applicable.
Certificate Interest Rate: With respect to each Class of
-------------------------
Certificates, the applicable per annum rate set forth or described in the
Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the
-----------------
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other
----------------------------
than a Notional Certificate, at the time of determination, the maximum
specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount
set forth on the face of such Certificate (plus, in the case of any Negative
Amortization Certificate, any Deferred Interest allocated thereto on previous
Distribution Dates, and plus, in the case of any Accrual Certificate, its
Percentage Interest of any related Accrual Amount for each previous
Distribution Date), less the amount of all principal distributions previously
made with respect to such Certificate, all Realized Losses allocated to such
Certificate, and, in the case of a Subordinate Certificate, any Subordinate
Certificate Writedown Amount allocated to such Certificate. For purposes of
Article V hereof, unless specifically provided to the contrary, Certificate
Principal Amounts shall be determined as of the close of business of the
immediately preceding Distribution Date, after giving effect to all
distributions made on such date. Notional Certificates are issued without
Certificate Principal Amounts.
Certificate Register and Certificate Registrar: The register
-------------------- ---------------------
maintained and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of
-----------------
"Holder."
Class: All Certificates bearing the same class designation.
-----
Class A Certificate: Any Class 1-A, Class 2-A1, Class 2-A2, Class 2
-------------------
A3, Class 2-A4, Class 2-AP or Class 2-AX Certificate.
Class 2-AP Deferred Amount: As to any Distribution Date on or prior
--------------------------
to the Credit Support Depletion Date for the Group 2 Certificates, the
aggregate of the applicable AP Percentage of the principal portion of each
Realized Loss on a Pool 2 Mortgage Loan, other than an Excess Loss, to be
allocated to the Class 2-AP Certificates on such Distribution Date or
previously allocated to the Class 2-AP Certificates and not yet paid to the
Holders of the Class 2-AP Certificates pursuant to Section 5.02(a)(iv).
Class 2-AP Principal Distribution Amount: For any Distribution Date,
----------------------------------------
the sum of the following amounts:
(i) the applicable AP Percentage of the principal portion of each
Scheduled Payment (without giving effect to any Debt Service Reduction
occurring prior to the Bankruptcy Coverage Termination Date), other than
any Balloon Payment, on a Pool 2 Mortgage Loan due during the related
Due Period;
(ii) the applicable AP Percentage of each of the following amounts:
(1) each Principal Prepayment collected during the applicable Prepayment
Period, (2) each other unscheduled collection, including Insurance
Proceeds and Liquidation Proceeds (other than with respect to any Pool 2
Mortgage Loan that was finally liquidated during the applicable
Prepayment Period), representing or allocable to recoveries of principal
received during the applicable Prepayment Period, (3) the principal
portion of all proceeds of the purchase of any Pool 2 Mortgage Loan (or,
in the case of a permitted substitution, amounts representing a
principal adjustment) actually received by the Trustee with respect to
the applicable Prepayment Period, and (4) the principal portion of each
Balloon Payment received during the Due Period;
(iii) with respect to unscheduled recoveries allocable to principal
of any Pool 2 Mortgage Loan that was finally liquidated during the
related Prepayment Period, the applicable AP Percentage of the related
net Liquidation Proceeds allocable to principal; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid.
Class B Certificate: Any Class B1, Class B2, Class B3, Class B4,
-------------------
Class B5 or Class B6 Certificate.
Class Certificate Principal Amount: With respect to a Class of
----------------------------------
Certificates other than any Class of Notional Certificates, the aggregate of
the Certificate Principal Amounts of all Certificates of such Class at the
date of determination.
Class Percentage: For each Class of Certificates or Component, for
----------------
each Distribution Date, the percentage obtained by dividing the Class
Certificate Principal Amount or Component Principal Amount of such Class or
Component immediately prior to such Distribution Date by the aggregate
Certificate Principal Amount or Component Principal Amount of all
Certificates immediately prior to such date.
Class 2-A4 Percentage: As to any Distribution Date, the percentage
---------------------
equivalent of the fraction, the numerator of which is equal to the Class
Certificate Principal Amount of the Class 2-A4 Certificates immediately prior
to such date and the denominator of which is equal to the sum of aggregate
Certificate Principal Amount of all Certificates in Group 2 other than the
Class 2-AP Certificates and the aggregate Component Principal Amount of the
Group 2 Components immediately prior to such date.
Class 2-A4 Prepayment Shift Percentage: As to any Distribution Date
-------------------------------------------
occurring during the five years beginning on the first Distribution Date, 0%.
As to any Distribution Date occurring on or after the fifth anniversary of
the first Distribution Date, the following percentage for such Distribution
Date: for any Distribution Date in the first year thereafter, 30%; for any
Distribution Date in the second year thereafter, 40%; for any Distribution
Date in the third year thereafter, 60%; for any Distribution Date in the
fourth year thereafter, 80%; and for any subsequent Distribution Date, 100%.
Class 2-A4 Priority Amount: As to any Distribution Date, an amount
--------------------------
equal to the lesser of (i) the sum of (x) the product of the Class 2-A4
Percentage for such date, the Class 2-A4 Scheduled Principal Percentage for
such date and the Scheduled Principal Amount for such date and (y) the
product of the Class 2-A4 Percentage for such date, the Class 2-A4 Prepayment
Shift Percentage for such date and the Unscheduled Principal Amount for such
date, and (ii) the Class Certificate Principal Amount of the Class 2-A4
Certificates immediately prior to such date.
Class 2-A4 Scheduled Principal Percentage: As to any Distribution
-----------------------------------------
Date occurring during the five years beginning on the first Distribution
Date, 0%. As to any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date, 100%.
Clearing Agency: An organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
As of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
---------------------------
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: October 30, 1997.
------------
Code: The Internal Revenue Code of 1986, as amended, and as it may
----
be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: A separate account established and maintained by
------------------
the Master Servicer pursuant to Section 4.01.
Collection Period: With respect to each Mortgage Loan and any
-----------------
Distribution Date, as specified in the applicable Servicing Agreement, the
period during which amounts required to be remitted by the related Servicer
on the applicable Remittance Date (to the extent provided in such Servicing
Agreement) are required to be deposited in the applicable custodial account.
Compensating Interest Payment: With respect to any Distribution
-----------------------------
Date, an amount equal to the excess of (x) the aggregate of any Prepayment
Interest Shortfalls with respect to such Distribution Date over (y) the
aggregate of any amounts paid by the Servicers in respect of such shortfalls;
provided, that such amount shall not exceed the Aggregate Master Servicing
Compensation that would be payable to the Master Servicer in respect of such
Distribution Date without giving effect to any Compensating Interest Payment.
Component: Any of the components of a Class of Subordinate
---------
Certificates having the designations and initial Component Principal Amounts
as follows:
Designation Component Principal Amount
----------- --------------------------
Class B1(1) $3,551,000.00
Class B1(2) 8,183,000.00
Class B2(1) 580,000.00
Class B2(2) 3,031,000.00
Class B3(1) 290,000.00
Class B3(2) 1,515,000.00
Class B4(1) 290,000.00
Class B4(2) 1,212,000.00
Class B5(1) 217,000.00
Class B5(2) 910,000.00
Class B6(1) 508,082.42
Class B6(2) 1,515,809.44
Component Certificate: Any Subordinate Certificate.
---------------------
Component Interest Rate: With respect to any Distribution Date and
-----------------------
(i) the Group 1 Components, the Pool 1 rate for such date; and (ii) the Group
2 Components, the Pool 2 Rate for such date.
Component Principal Amount: As of any Distribution Date and with
--------------------------
respect to any Component, other than any Notional Component, the initial
Component Principal Amount thereof as set forth in the definition of
Component (plus, in the case of any Negative Amortization Component, any
Deferred Interest allocated thereto on previous Distribution Dates and plus,
in the case of any Accrual Component, any related Accrual Amount for each
previous Distribution Date), less the sum of (x) all amounts distributed in
reduction thereof on previous Distribution Dates pursuant to Section 5.02,
(y) the amount of all Realized Losses previously allocated thereto pursuant
to Section 5.03 and (z) any Subordinate Certificate Writedown Amount
allocated to such Component.
Conventional Loan: A Mortgage Loan that is not insured by the United
-----------------
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
Converted Mortgage Loan: None.
-----------------------
Convertible Mortgage Loan: None.
-------------------------
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares
----------------
and a Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
--------------------------
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition
Agreement (or a blanket assignment of all Recognition Agreements) endorsed in
blank; (v) the executed UCC-1 financing statement with evidence of recording
thereon, which has been filed in all places required to perfect the security
interest in the Cooperative Shares and the Proprietary Lease; and (vi)
executed UCC-3 financing statements (or copies thereof) or other appropriate
UCC financing statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
Cooperative Property: The real property and improvements owned by
--------------------
the Cooperative Corporation, that includes the allocation of individual
dwelling units to the holders of the Cooperative Shares of the Cooperative
Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
------------------
Cooperative Unit: A single family dwelling located in a Cooperative
----------------
Property.
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Structured
Finance.
Credit Support Depletion Date: As to each Certificate Group, the
----------------------------------
Distribution Date on which, giving effect to all distributions on such date,
the aggregate Component Principal Amount of the Components of such
Certificate Group have been reduced to zero.
Credit Support Percentage: As to any Component and any Distribution
-------------------------
Date, the sum of the Class Percentages of all Components in the related
Certificate Group that rank lower in priority than such Component.
Custodial Agreement: Each of the custodial agreements attached as
-------------------
Exhibit K hereto, and any custodial agreement subsequently executed by the
Trustee substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
---------
Custodial Agreement, and any successor thereto.
Cut-off Date: October 1, 1997.
------------
Cut-off Date Aggregate Principal Balance: With respect to the
----------------------------------------
Mortgage Loans in the Trust Fund on the Closing Date, the Aggregate Principal
Balance for all such Mortgage Loans as of the Cut-off Date.
DCR: Duff & ▇▇▇▇▇▇ Credit Rating Co., or any successor in interest.
---
Debt Service Reduction: With respect to any Mortgage Loan, a
----------------------
reduction of the Scheduled Payment that the related Mortgagor is obligated to
pay on any Due Date thereon as a result of any proceeding under bankruptcy
law or any similar proceeding.
Deceased Holder: With respect to a Holder of a Redemption
---------------
Certificate, as defined in Section 5.05(b).
Deferred Interest: With respect to any Class of Negative
-----------------
Amortization Certificates and any Distribution Date, the lesser of (x) the
applicable Interest Distribution Amount for such date (without giving effect
to any Deferred Interest) and (y) the aggregate Mortgage Loan Negative
Amortization, if any, for the related Collection Period.
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 such Mortgage Loan, which
valuation results from a proceeding under bankruptcy law or any similar
proceeding.
Definitive Certificate: A Certificate of any Class issued in
----------------------
definitive, fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
---------------------
Trust Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Deposit Date: With respect to each Distribution Date, the Business
------------
Day immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
---------
corporation having its principal place of business in New York, or its
successors in interest.
Determination Date: With respect to each Distribution Date, the
------------------
related Latest Remittance Date.
Disqualified Organization: Either (i) the United States, (ii) any
-------------------------
state or political subdivision thereof, (iii) any foreign government, (iv)
any international organization, (v) any agency or instrumentality of any of
the foregoing, (vi) any tax-exempt organization (other than a cooperative
described in section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax imposed
by section 511 of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, or (viii) any other entity designated as a
Disqualified Organization by relevant legislation amending the REMIC
Provisions and in effect at or proposed to be effective as of the time of the
determination. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception
of the Federal Home Loan Mortgage Corporation, a majority of its board of
directors is not selected by such governmental unit.
Distribution Date: With respect to each calendar month, the third
-----------------
Business Day following the related Latest Remittance Date, commencing
December 1, 1997.
Due Date: With respect to any Mortgage Loan, the date on which a
--------
Scheduled Payment is due under the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
----------
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: Either (i) an account or accounts maintained with
----------------
a federal or state chartered depository institution or trust company
acceptable to the Rating Agencies or (ii) an account or accounts the deposits
in which are insured by the FDIC to the limits established by such
corporation, provided that any such deposits not so insured shall be
maintained in an account at a depository institution or trust company whose
commercial paper or other short term debt obligations (or, in the case of a
depository institution or trust company which is the principal subsidiary of
a holding company, the commercial paper or other short term debt or deposit
obligations of such holding company or depository institution, as the case
may be) have been rated by each Rating Agency in its highest short-term
rating category, or (iii) a segregated trust account or accounts (which shall
be a "special deposit account") maintained with the Trustee or any other
federal or state chartered depository institution or trust company, acting in
its fiduciary capacity, in a manner acceptable to the Trustee and the Rating
Agencies. Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the following obligations
--------------------
or securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of America
the obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories and the Trustee or any agent of the Trustee, acting in its
respective commercial capacity) incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so
long as at the time of investment or the contractual commitment
providing for such investment the commercial paper or other short-term
debt obligations of such depository institution or trust company (or, in
the case of a depository institution or trust company which is the
principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or
deposit institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof which have a credit rating from each Rating
Agency, at the time of investment or the contractual commitment
providing for such investment, at least equal to one of the two highest
long-term credit rating categories of each Rating Agency; provided,
however, that securities issued by any particular corporation will not
be Eligible Investments to the extent that investment therein will cause
the then outstanding principal amount of securities issued by such
corporation and held as part of the Trust Fund to exceed 20% of the sum
of the Aggregate Principal Balance and the aggregate principal amount of
all Eligible Investments in the Certificate Account; provided, further,
that such securities will not be Eligible Investments if they are
published as being under review with negative implications from either
Rating Agency;
(v) commercial paper (including both noninterest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance
thereof) rated by each Rating Agency in its highest short-term rating
category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or
investment, (A) rated in the highest rating category by each Rating
Agency or (B) that would not adversely affect the then current rating by
either Rating Agency of any of the Certificates;
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.
ERISA-Restricted Certificate: Any Subordinate Certificate.
----------------------------
Escrow Account: Any account established and maintained by the
--------------
applicable Servicer pursuant to the applicable Servicing Agreement.
Event of Default: Any one of the conditions or circumstances
----------------
enumerated in Section 6.14(a).
Excess Loss: With respect to each Mortgage Pool, any Bankruptcy
-----------
Loss, or portion thereof, in excess of the then-applicable Bankruptcy Loss
Limit, any Fraud Loss, or portion thereof, in excess of the then-applicable
Fraud Loss Limit, and any Special Hazard Loss, or portion thereof, in excess
of the then-applicable Special Hazard Loss Limit.
FDIC: The Federal Deposit Insurance Corporation or any successor
----
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: With respect to the Class 1-A
---------------------------------
Certificates, October 30, 2007; with respect to the other Classes of
Certificates, March 28, 2030.
Financial Intermediary: A broker, dealer, bank or other financial
----------------------
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
Fitch: Fitch Investors Service, L.P., or any successor in interest.
-----
FNMA: The Federal National Mortgage Association, a federally
----
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Fraud Loss: With respect to each Mortgage Pool, any Realized Loss on
----------
a Mortgage Loan in such Mortgage Pool sustained by reason of a default
arising from fraud, dishonesty or misrepresentation in connection with the
related Mortgage Loan.
Fraud Loss Limit: As of the Cut-off Date, with respect to Pool 1,
----------------
$866,516, and with respect to Pool 2, $3,631,899, each of which amounts shall
be reduced (i) by the amount of Fraud Losses allocated to the Certificates of
the related Certificate Group; (ii) on the first anniversary of the Cut-off
Date, to an amount equal to the excess of 2% of the Cut-off Date Balance of
the Mortgage Loans over the cumulative amount of Fraud Losses allocated to
the Certificates of the related Certificate Group, (iii) on the second,
third, and fourth anniversaries of the Cut-off Date, to an amount equal to
the excess of 1% of the Cut-off Date Balance of the Mortgage Loans in the
related Mortgage Pool over the cumulative amount of Fraud Losses allocated to
the Certificates of the related Certificate Group and (iv) on the fifth
anniversary of the Cut-off Date, to zero.
GNMA: The Government National Mortgage Association, a wholly owned
----
corporate instrumentality of the United States within HUD.
Group 1: All of the Group 1 Certificates.
-------
Group 1 Certificate: Any Class 1-A Certificate, and any B1(1),
-------------------
B2(1), B3(1), B4(1), B5(1) or B6(1) Component.
Group 1 Component: Any B1(1), B2(1), B3(1), B4(1), B5(1) or B6(1)
-----------------
Component.
Group 1 Senior Certificate: Any Class 1-A Certificate.
--------------------------
Group 2: All of the Group 2 Certificates.
-------
Group 2 Certificate: Any Class 2-A1, Class 2-A2, Class 2-AP, Class
-------------------
2-AX or Class R Certificate and any B1(2), B2(2), B3(2), B4(2), B5(2) or
B6(2) Component.
Group 2 Component: Any B1(2), B2(2), B3(2), B4(2), B5(2) or B6(2)
-----------------
Component.
Holder or Certificateholder: The registered owner of any Certificate
------ -----------------
as recorded on the books of the Certificate Registrar except that, solely for
the purposes of taking any action or giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor, the
Master Servicer, any Servicer or any Affiliate thereof shall be deemed not to
be outstanding in determining whether the requisite percentage necessary to
effect any such consent has been obtained, except that, in determining
whether the Trustee shall be protected in relying upon any such consent, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be disregarded. The Trustee may request and conclusively rely on
certifications by the Depositor, the Master Servicer and any Servicer in
determining whether any Certificates are registered to an Affiliate of the
Depositor, the Master Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development,
---
or any successor thereto.
Independent: When used with respect to any Accountants, a Person who
-----------
is "independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other
Person, and (c) is not connected with such other Person or any Affiliate of
such other Person as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
Individual Redemption Certificate: A Redemption Certificate with a
---------------------------------
$1,000 Certificate Principal Amount.
Initial LIBOR Rate: None.
------------------
Insurance Proceeds: Amounts paid by the insurer under any Insurance
------------------
Policy, other than amounts to be applied to restoration or repair of the
related Mortgaged Property or required to be paid over to the Mortgagor
pursuant to law or the related Mortgage Note.
Interest Accrual Period: With respect to any Distribution Date and
-----------------------
any Class of Certificates (other than any Class of LIBOR Certificates or
Principal Only Certificates) or Component, the one-month period beginning
immediately following the end of the preceding Interest Accrual Period (or
from the Cut-off Date, in the case of the first Interest Accrual Period) and
ending on the last day of the month preceding the month in which such
Distribution Date occurs. With respect to any Distribution Date and any
Class of LIBOR Certificates, the one-month period beginning on the 25th day
of the preceding month and ending on the 24th day of the month in which such
Distribution Date occurs.
Interest Distribution Amount: Not applicable.
----------------------------
Interest Shortfall: With respect to any Class of Certificates and
------------------
any Distribution Date, any Accrued Certificate Interest (net of allocable Net
Prepayment Interest Shortfalls not paid with respect to a previous
Distribution Date.
Intervening Assignments: The original intervening assignments of the
-----------------------
Mortgage, notice of transfer or equivalent instrument.
Latest Possible Maturity Date: March 28, 2032.
-----------------------------
Latest Remittance Date: The "Remittance Date" as defined in the
----------------------
Servicing Agreement applicable to Residential Funding Corporation.
▇▇▇▇▇▇ Capital: ▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers
--------------
Holdings Inc., or any successor in interest.
LIBOR: The per annum rate determined, pursuant to Section 4.05, on
-----
the basis of London interbank offered rate quotations for one-month
Eurodollar deposits, as such quotations may appear on the display designated
as page "LIUS01M" on the Bloomberg Financial Markets Commodities News (or
such other page as may replace such page on that service for the purpose of
displaying London interbank offered quotations of major banks).
LIBOR Certificate: None.
-----------------
LIBOR Determination Date: The second London Business Day immediately
------------------------
preceding the commencement of each Interest Accrual Period for any LIBOR
Certificates.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which
------------------------
the Master Servicer has determined that all amounts that it expects to
recover on behalf of the Trust Fund from or on account of such Mortgage Loan
have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master
--------------------
Servicer or a Servicer in connection with the liquidation of any defaulted
Mortgage Loan and are not recoverable under the applicable Primary Mortgage
Insurance Policy, including, without limitation, foreclosure and
rehabilitation expenses, legal expenses and unreimbursed amounts expended
pursuant to Sections 9.06, 9.16 or 9.22.
Liquidation Proceeds: Cash received in connection with the
--------------------
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
amounts remaining in the related Escrow Account.
Living Holder: Any Holder of a Redemption Certificate other than a
-------------
Deceased Holder.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of
-------------------
the principal balance of such Mortgage Loan at origination, or such other
date as is specified, to the Original Value thereof.
London Business Day: Any day on which banks are open for dealing in
-------------------
foreign currency and exchange in London, England and New York City.
Maintenance: With respect to any Cooperative Unit, the rent or fee
-----------
paid by the Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
Master Servicer: Norwest Bank Minnesota, National Association, or
---------------
any successor in interest, or if any successor master servicer shall be
appointed as herein provided, then such successor master servicer.
Master Servicing Fee: As to any Distribution Date and each Mortgage
--------------------
Loan, an amount equal to the product of the Master Servicing Fee Rate and the
Scheduled Principal Balance of such Mortgage Loan as of the first day of the
related Due Period. The Master Servicing Fee for any Mortgage Loan shall be
payable in respect of any Distribution Date solely from the interest portion
of the Scheduled Payment or other payment or recovery with respect to such
Mortgage Loan.
Master Servicing Fee Rate: 0.005% per annum.
-------------------------
Material Defect: As defined in Section 2.02(c) hereof.
---------------
Moody's: ▇▇▇▇▇'▇ Investors Service, or any successor in interest.
-------
Mortgage: A mortgage, deed of trust or other instrument encumbering
--------
a fee simple interest in real property securing a Mortgage Note, together
with improvements thereto.
Mortgage File: The mortgage documents listed in Section 2.01(b)
-------------
pertaining to a particular Mortgage Loan required to be delivered to the
Trustee pursuant to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences
-------------
of indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 or Section
2.05, including without limitation, each Mortgage Loan listed on the Mortgage
Loan Schedule, as amended from time to time.
Mortgage Loan Negative Amortization: As to any Adjustable Rate
-----------------------------------
Mortgage Loan, an amount added to the principal balance of such Mortgage Loan
pursuant to the terms of the related Note, equal to the excess, if any, of
interest accrued at the Mortgage Rate for any month over the greater of (a)
the amount of the Scheduled Payment for such month and (b) the amount of
interest received in respect of such month from the related Mortgagor.
Mortgage Loan Sale Agreement: The agreement, dated as of October 1,
----------------------------
1997, for the sale of the Mortgage Loans by ▇▇▇▇▇▇ Brothers Holdings Inc.,
doing business as ▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers Holdings
Inc., to the Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
----------------------
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time pursuant to Section 2.02.
Mortgage Note: The note or other evidence of the indebtedness of a
-------------
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Either of Pool 1 or Pool 2.
-------------
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
-------------
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
------------------
property, together with improvements thereto including any exterior
improvements to be completed within 120 days of disbursement of the related
Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the related
Cooperative Shares and Proprietary Lease, securing the indebtedness of the
Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
---------
Negative Amortization Certificate: None.
---------------------------------
Negative Amortization Component: None.
--------------------------------
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage
-----------------
Rate thereof reduced by the sum of the applicable Servicing Fee Rate, the
Master Servicing Fee Rate and the Trustee Fee Rate.
Net Prepayment Interest Shortfall: With respect to any Distribution
---------------------------------
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the sum of any amounts paid by the Servicers with respect to such
shortfalls and any amount that is required to be paid by the Master Servicer
in respect of such shortfalls pursuant to this Agreement.
Non-AP Percentage: As to any Pool 2 Discount Mortgage Loan, the
-----------------
percentage equivalent of the fraction, the numerator of which is the Net
Mortgage Rate of such Pool 2 Discount Mortgage Loan and the denominator of
which is 7.250%. As to any Pool 2 Non-Discount Mortgage Loan, 100%.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
--------------------------
Certificate.
Notional Amount: With respect to any Notional Certificate and any
---------------
Distribution Date, such Certificate's Percentage Interest of the Aggregate
Notional Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: Any Class 2-AX Certificate.
--------------------
Notional Component: None.
------------------
Notional Component Amount: None.
-------------------------
Offering Document: Either of the Prospectus or the private placement
-----------------
memorandum dated October 28, 1997 relating to the Class B4, Class B5 and
Class B6 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
---------------------
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably
------------------
acceptable in form and substance to the Trustee, and who may be in-house or
outside counsel to the Depositor, the Master Servicer or a Servicer but which
must be Independent outside counsel with respect to any such opinion of
counsel concerning the transfer of any Residual Certificate or concerning
certain matters with respect to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or the taxation, or the federal income tax
status, of each REMIC.
Original Subordinate Principal Amount: With respect to each
-------------------------------------
Certificate Group, the aggregate Component Principal Amount of the related
Components as of the Closing Date.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
--------------
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor
at the time the related Mortgage Loan was originated.
PAC Amount: As to any Distribution Date and any Class of PAC
----------
Certificates and any PAC Component, the amount designated as such for such
Distribution Date and such Class or Component as set forth in the Principal
Amount Schedules.
PAC Certificate: None.
---------------
PAC Component: None.
-------------
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
------------
Percentage Interest: With respect to any Certificate, its percentage
-------------------
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than a Class 2-AX Certificate, the
Percentage Interest evidenced thereby shall equal the initial Certificate
Principal Amount thereof divided by the initial Class Certificate Principal
Amount of all Certificates of the same Class. With respect to any Class 2-AX
Certificate, the Percentage Interest evidenced thereby shall be as specified
on the face thereof.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Placement Agent: ▇▇▇▇▇▇ Brothers Inc.
---------------
Plan Asset Regulations: The Department of Labor regulations set
----------------------
forth in 29 C.F.R. 2510.3-101.
Pool 1: The aggregate of the fully amortizing Mortgage Loans having
------
maturity dates on or prior to January 1, 2000 and Balloon Mortgage Loans
having maturity dates prior to October 1, 2007, as identified on the Mortgage
Loan Schedule.
Pool 1 Rate: With respect to any Distribution Date, the per annum
-----------
rate equal to weighted average of the Net Mortgage Rates of the Pool 1
Mortgage Loans, weighted on the basis of the Scheduled Principal Balances of
such Mortgage Loans as of the first day of the related Interest Accrual
Period.
Pool 2: The aggregate of the fully amortizing Mortgage Loans having
------
maturity dates after January 1, 2000 and Balloon Mortgage Loans having
maturity dates on or after October 1, 2007, as identified on the Mortgage
Loan Schedule.
Pool 2 Discount Mortgage Loan: Any Pool 2 Mortgage Loan with a Net
-----------------------------
Mortgage Rate less than 7.250% per annum.
Pool 2 Non-Discount Mortgage Loan: Any Pool 2 Mortgage Loan with a
---------------------------------
Net Mortgage Rate greater than or equal to 7.250% per annum.
Pool 2 Premium Mortgage Loan. Any Pool 2 Mortgage Loan with a Net
----------------------------
Mortgage Rate greater than 7.250% per annum.
Pool 2 Rate: 7.250% per annum.
-----------
Premium Mortgage Loan: None.
---------------------
Prepayment Interest Shortfall: With respect to any full or partial
-----------------------------
Principal Prepayment of a Mortgage Loan, the difference between (i) one full
month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Master Servicing Fee Rate
and the applicable Servicing Fee Rate, on the Scheduled Principal Balance of
such Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest actually received with respect to such Mortgage Loan in
connection with such Principal Prepayment.
Prepayment Period: The applicable period specified in the applicable
-----------------
Servicing Agreement (whether or not specifically defined as a "Prepayment
Period") during which amounts required to be remitted by the related Servicer
in respect of Mortgage Loan prepayments on the applicable Servicer Remittance
Date are received by such Servicer.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if
---------------------------------
any, on an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Amount Schedules: Any principal amount schedules attached
--------------------------
hereto, if applicable, as Schedule B, setting forth the PAC Amounts of any
PAC Certificates and PAC Components, the TAC Amounts of any TAC Certificates
and TAC Components, and the Scheduled Amounts of any Scheduled Certificates
and Scheduled Components.
Principal Only Certificate: Any Class 2-AP Certificate.
--------------------------
Principal Prepayment: Any Mortgagor payment of principal (other than
--------------------
a Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
-----------------
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated October 28, 1997
----------
together with the accompanying prospectus dated May 21, 1996, relating to the
Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class 2-A4, Class 2-AP, Class
2-AX, Class B1, Class B2, Class B3 and Class R Certificates.
Purchase Price: With respect to the repurchase of a Mortgage Loan
--------------
pursuant to Article II of this Agreement, an amount equal to the sum of (a)
100% of the unpaid principal balance of such Mortgage Loan and (b) accrued
interest thereon at the Mortgage Rate, from the date as to which interest was
last paid to (but not including) the Due Date immediately preceding the
related Distribution Date. The Master Servicer shall be reimbursed from the
Purchase Price for any Mortgage Loan or related REO Property for any Advances
made with respect to such Mortgage Loan that are reimbursable to the Master
Servicer under this Agreement.
Qualified GIC: A guaranteed investment contract or surety bond
-------------
providing for the investment of funds in the Collection Account or the
Certificate Account and insuring a minimum, fixed or floating rate of return
on investments of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two
highest rating categories or, if such insurance company has no long-term
debt, whose claims paying ability is rated by each Rating Agency in one
of its two highest rating categories, and whose short-term debt is rated
by each Rating Agency in its highest rating category;
(b) provide that the Trustee may exercise all of the rights under
such contract or surety bond without the necessity of taking any action
by any other Person;
(c) provide that if at any time the then current credit standing
of the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in
a downgrading of any rating of the Certificates, the Trustee shall
terminate such contract without penalty and be entitled to the return of
all funds previously invested thereunder, together with accrued interest
thereon at the interest rate provided under such contract to the date of
delivery of such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder: and
(e) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Collection Account or the
Certificate Account, as the case may be, not later than the Business Day
prior to any Distribution Date.
Qualified Insurer: An insurance company duly qualified as such under
-----------------
the laws of the states in which the related Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided and whose claims
paying ability is rated by each Rating Agency in its highest rating category
or whose selection as an insurer will not adversely affect the rating of the
Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
-----------------------------------
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of
any other mortgage loan substituted for the same Deleted Mortgage Loan) as of
the Due Date in the month in which such substitution occurs not in excess of
the Scheduled Principal Balance of the related Deleted Mortgage Loan,
provided, however, that, to the extent that the Scheduled Principal Balance
of such Mortgage Loan is less than the Scheduled Principal Balance of the
related Deleted Mortgage Loan, then such differential in principal amount,
together with interest thereon at the applicable Mortgage Rate net of the
Master Servicing Fee and the applicable Servicing Fee from the date as to
which interest was last paid through the end of the Due Period in which such
substitution occurs, shall be paid by the party effecting such substitution
to the Trustee for deposit into the Certificate Account, and shall be treated
as a Principal Prepayment hereunder; (ii) has a Net Mortgage Rate not lower
than the Net Mortgage Rate of the related Deleted Mortgage Loan; (iii) if the
total principal balance of Qualifying Substitute Mortgage Loans in the Trust
is less than 5% of the initial principal balance of the Mortgage Loans, has a
remaining stated term to maturity not longer than, and not more than one year
shorter than, the remaining term to stated maturity of the related Deleted
Mortgage Loan; (iv) has a Loan-to-Value Ratio as of the date of such
substitution not greater than that of the related Deleted Mortgage Loan; (v)
will comply with all of the representations and warranties relating to
Mortgage Loans set forth herein, as of the date as of which such substitution
occurs; (vi) is not a Cooperative Loan unless the related Deleted Mortgage
Loan was a Cooperative Loan; (vii) if applicable, has the same index as and a
margin not less than that of the related Deleted Mortgage Loan and (viii) has
not been delinquent for a period of more than 30 days more than twice in the
twelve months immediately preceding such date of substitution. In the event
that either one mortgage loan is substituted for more than one Deleted
Mortgage Loan or more than one mortgage loan is substituted for one or more
Deleted Mortgage Loans, then (a) the Scheduled Principal Balance referred to
in clause (i) above shall be determined on a loan-by-loan basis, (b) the rate
referred to in clause (ii) above shall be determined on a loan-by-loan basis
and (c) the remaining term to stated maturity referred to in clause (iii)
above shall be determined on a weighted average basis, provided that the
final scheduled maturity date of any Qualifying Substitute Mortgage Loan
shall not exceed the Final Scheduled Distribution Date of any Class of
Certificates. Whenever a Qualifying Substitute Mortgage Loan is substituted
for a Deleted Mortgage Loan pursuant to this Agreement, the party effecting
such substitution shall certify such qualification in writing to the Trustee.
Rating Agency: Each of Fitch and S&P; provided, that with respect to
-------------
the Subordinate Certificates, Fitch will be the sole Rating Agency.
Realized Loss: (a) with respect to each Liquidated Mortgage Loan, an
-------------
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of
the date of liquidation, plus (ii) interest at the applicable Net Mortgage
Rate from the date as to which interest was last paid up to the last day of
the month of such liquidation, minus (iii) Liquidation Proceeds received, net
of amounts that are reimbursable to the Master Servicer with respect to such
Mortgage Loan (other than Advances of principal and interest) including
expenses of liquidation, and (b) with respect to each Mortgage Loan that has
become the subject of a Deficient Valuation, the difference between the
unpaid principal balance of such Mortgage Loan immediately prior to such
Deficient Valuation and the unpaid principal balance of such Mortgage Loan as
reduced by the Deficient Valuation. In determining whether a Realized Loss
is a Realized Loss of interest or principal, Liquidation Proceeds shall be
allocated, first, to payment of expenses related to such Liquidated Mortgage
Loan, then to accrued unpaid interest and finally to reduce the principal
balance of the Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an
---------------------
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the Cooperative
Property.
Record Date: With respect to any Distribution Date, the close of
-----------
business on the last Business Day of the month immediately preceding the
month in which the related Remittance Dates occur.
Redemption Certificate: None.
----------------------
Reference Banks: As defined in Section 4.05.
---------------
Reimbursement Amount: As defined in Section 5.02.
--------------------
Relief Act Reduction: With respect to any Mortgage Loan as to which
--------------------
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Solders' and Sailors' Civil Relief Act of 1940,
as amended, any amount by which interest collectible on such Mortgage Loan
for the Due Date in the related Collection Period is less than interest
accrued thereon for the applicable one-month period at the Mortgage Rate
without giving effect to such reduction.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
-----
pursuant to Section 10.01(a) hereof.
REMIC Provisions: The provisions of the federal income tax law
----------------
relating to real estate mortgage investment conduits, which appear at
sections 860A through 86OG of Subchapter M of Chapter 1 of the Code, and
related provisions, and regulations, including proposed regulations and
rulings, and administrative pronouncements promulgated thereunder, as the
foregoing may be in effect from time to time.
Remittance Date: The day in each month on which each Servicer is
---------------
required to remit payments to the account maintained by the Master Servicer,
as specified in the related Servicing Agreement.
REO Property: A Mortgaged Property acquired by the Trust Fund
------------
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan or otherwise treated as having been acquired pursuant
to the REMIC Provisions.
Reserve Interest Rate: As defined in Section 4.05.
---------------------
Residual Certificate: Any Class R Certificate.
--------------------
Responsible Officer: When used with respect to the Trustee, any Vice
-------------------
President, Assistant Vice President, the Secretary, any assistant secretary,
the Treasurer, or any assistant treasurer, working in its corporate trust
department, or any other officer of the Trustee to whom a matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Restricted Certificate: Any Class B4, Class B5 or Class B6
----------------------
Certificate.
Rounding Account: Not applicable.
-----------------
S&P: Standard & Poor's Rating Services, a division of the
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor in interest.
Scheduled Amount: As to any Distribution Date and any Class of
----------------
Scheduled Certificates and any Scheduled Component, the amount designated as
such for such Distribution Date and such Class or Component as set forth in
the Principal Amount Schedules.
Scheduled Certificate: None.
---------------------
Scheduled Component: None.
-------------------
Scheduled Payment: Each scheduled payment of principal and interest
-----------------
(or of interest only, if applicable) to be paid by the Mortgagor on a
Mortgage Loan, as reduced (except where otherwise specified herein) by the
amount of any related Debt Service Reduction (excluding all amounts of
principal and interest that were due on or before the Cut-off Date whenever
received) and, in the case of an REO Property, an amount equivalent to the
Scheduled Payment that would have been due on the related Mortgage Loan if
such Mortgage Loan had remained in existence. In the case of any bi-weekly
payment Mortgage Loan, all payments due on such Mortgage Loan during any Due
Period shall be deemed collectively to constitute the Scheduled Payment due
on such Mortgage Loan in such Due Period.
Scheduled Principal Amount: As to any Distribution Date, an amount
---------------------------
equal to the amount described in clause (i)(b) of the definition of Senior
Principal Distribution Amount for Group 2.
Scheduled Principal Balance: (i) with respect to any Mortgage Loan
---------------------------
as of any Distribution Date, the principal balance of such Mortgage Loan at
the close of business on the Cut-off Date, after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or
before the Due Date in the related Due Period, whether or not received from
the Mortgagor or advanced by the Master Servicer, all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the Prepayment Period ending
in the month prior to the month of such Distribution Date) and (ii) with
respect to any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by the Trustee
(reduced by any amount applied as a reduction of principal on the Mortgage
Loan).
Security Agreement: With respect to any Cooperative Loan, the
------------------
agreement between the owner of the related Cooperative Shares and the
Originator of the related Mortgage Note that defines the terms of the
security interest in such Cooperative Shares and the related Proprietary
Lease.
Seller: ▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers Holdings Inc.,
------
or any successor in interest.
Senior Certificate: Any Class 1-A, Class 2-A1, Class 2-A2, Class 2
------------------
A3, Class 2-A4, Class 2-AP, Class 2-AX or Class R Certificate.
Senior Percentage: With respect to each Certificate Group and any
-----------------
Distribution Date, the percentage equivalent of the fraction, the numerator
of which is the aggregate Certificate Principal Amount of the related Senior
Certificates (other than, in the case of Group 2, the Class 2-AP
Certificates) immediately prior to such date and the denominator of which is
the sum of the aggregate Certificate Principal Amount of all Classes of
related Senior Certificates (other than, in the case of Group 2, the Class 2-
AP Certificates) and the Component Principal Amount of the related
Components, in each case, immediately prior to such date.
Senior Prepayment Percentage: With respect to each Certificate Group
----------------------------
and any Distribution Date occurring during the five years beginning on the
first Distribution Date, 100%. The Senior Prepayment Percentage for each
Certificate Group and any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date will be the related Senior
Percentage plus the following percentage of the related Subordinate
Percentage for such Distribution Date: for any Distribution Date in the first
year thereafter, 70%; for any Distribution Date in the second year
thereafter, 60%; for any Distribution Date in the third year thereafter, 40%;
for any Distribution Date in the fourth year thereafter, 20%; and for any
subsequent Distribution Date, 0%; provided, however, that if on any of the
foregoing Distribution Dates the Senior Percentage for any Certificate Group
exceeds the initial Senior Percentage for such Certificate Group, the Senior
Prepayment Percentage for each Certificate Group for such Distribution Date
will once again equal 100% for such Distribution Date.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for any Certificate Group below the level in effect for the most
recent prior period set forth in the paragraph above shall be effective on
any Distribution Date if, as of the first Distribution Date as to which any
such decrease applies, (i) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of all
Mortgage Loans in the related Mortgage Pool that were delinquent 60 days or
more (including for this purpose any Mortgage Loans in foreclosure and the
Scheduled Payments that would have been due on Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust Fund if
the related Mortgage Loan had remained in existence) is greater than or equal
to 50% of the aggregate of the Component Principal Amounts of the Components
in such Certificate Group immediately prior to such Distribution Date or (ii)
cumulative Realized Losses with respect to the Mortgage Loans in the related
Mortgage Pool exceed (a) with respect to the Distribution Date on the fifth
anniversary of the first Distribution Date, 30% of the aggregate of the
related Original Subordinate Principal Amount, (b) with respect to the
Distribution Date on the sixth anniversary of the first Distribution Date,
35% of the related Original Subordinate Principal Amount, (c) with respect to
the Distribution Date on the seventh anniversary of the first Distribution
Date, 40% of the related Original Subordinate Principal Amount, (d) with
respect to the Distribution Date on the eighth anniversary of the first
Distribution Date, 45% of the related Original Subordinate Principal Amount,
and (e) with respect to the Distribution Date on the ninth anniversary of the
first Distribution Date, 50% of the related Original Subordinate Principal
Amount.
Senior Principal Distribution Amount: For any Distribution Date and
------------------------------------
each Certificate Group, the sum of the following amounts:
(i) the product of (a) the related Senior Percentage for such date
and (b) the principal portion (multiplied by the applicable Non-AP
Percentage, in the case of Pool 2) of each Scheduled Payment (without
giving effect to any Debt Service Reduction occurring prior to the
Bankruptcy Coverage Termination Date), other than any Balloon Payment,
on a Mortgage Loan in the related Mortgage Pool due during the related
Due Period;
(ii) the product of (a) the related Senior Prepayment Percentage
for such date and (b) each of the following amounts (multiplied by the
applicable Non-AP Percentage, in the case of Pool 2): (1) each
Principal Prepayment on the Mortgage Loans in the related Mortgage Pool
collected during the applicable Prepayment Period, (2) each other
unscheduled collection, including Insurance Proceeds and Liquidation
Proceeds (other than with respect to any Mortgage Loan in the related
Mortgage Pool that was finally liquidated during the applicable
Prepayment Period), representing or allocable to recoveries of principal
received during the applicable Prepayment Period, (3) the principal
portion of all proceeds of the purchase of any Mortgage Loan in the
related Mortgage Pool (or, in the case of a permitted substitution,
amounts representing a principal adjustment) actually received by the
Trustee with respect to the applicable Prepayment Period, and (4) the
principal portion of each Balloon Payment received during the related
Due Period;
(iii) with respect to unscheduled recoveries allocable to principal
of any Mortgage Loan in the related Mortgage Pool that was finally
liquidated during the applicable Prepayment Period, the lesser of (a)
the related net Liquidation Proceeds allocable to principal (multiplied
by the applicable Non-AP Percentage, in the case of Pool 2) and (b) the
product of the related Senior Prepayment Percentage for such date and
the Scheduled Principal Balance (multiplied by the applicable Non-AP
Percentage, in the case of Pool 2) of such Mortgage Loan at the time of
liquidation; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid;
Servicer: Any Servicer that has entered into any of the Servicing
--------
Agreements attached as Exhibit E hereto, or any successor in interest.
Servicing Agreement: Each Servicing Agreement among a Servicer and
-------------------
▇▇▇▇▇▇ Capital, dated as of October 1, 1997, attached hereto as Exhibit E.
Servicing Fee: As specified in the applicable Servicing Agreement.
-------------
Servicing Fee Rate: With respect to any Servicer, as specified in
------------------
the applicable Servicing Agreement.
Servicing Officer: Any officer of the Master Servicer involved in or
-----------------
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished
by the Master Servicer to the Trustee, as such list may from time to time be
amended.
Special Hazard Loss: With respect to the Mortgage Loans, (x) any
-------------------
Realized Loss arising out of any direct physical loss or damage to a
Mortgaged Property which is caused by or results from any cause, exclusive of
any loss covered by a hazard policy or a flood insurance policy required to
be maintained in respect of such Mortgaged Property and any loss caused by or
resulting from (i) normal wear and tear, (ii) conversion or other dishonest
act on the part of the Trustee, the Master Servicer, any Servicer or any of
their agents or employees, or (iii) errors in design, faulty workmanship or
faulty materials, unless the collapse of the property or a part thereof
ensues, or (y) any Realized Loss arising from or related to the presence or
suspected presence of hazardous wastes, or hazardous substances on a
Mortgaged Property unless such loss is covered by a hazard policy or flood
insurance policy required to be maintained in respect of such Mortgaged
Property.
Special Hazard Loss Limit: As of the Cut-off Date, with respect to
-------------------------
Pool 1, $1,188,692, and with respect to Pool 2, $1,953,777, each of which
amounts shall be reduced from time to time to an amount equal on any
Distribution Date to the lesser of (a) the greatest of (i) 1% of the
aggregate of the Scheduled Principal Balances of the Mortgage Loans in the
related Mortgage Pool; (ii) twice the Scheduled Principal Balance of the
Mortgage Loan in the related Mortgage Pool having the highest Scheduled
Principal Balance, and (iii) the aggregate Scheduled Principal Balances of
the Mortgage Loans in the related Mortgage Pool secured by Mortgaged
Properties located in the single California postal zip code area having the
highest aggregate Scheduled Principal Balance of Mortgage Loans of any such
postal zip code area and (b) the related Special Hazard Loss Limit as of the
Closing Date less the amount of Special Hazard Losses incurred with respect
to Mortgage Loans in the related Mortgage Pool since the Closing Date.
Startup Day: The day designated as such pursuant to Section 10.01(b)
-----------
hereof.
Subordinate Certificate: Any Class B Certificate.
-----------------------
Subordinate Certificate Writedown Amount: With respect to each
----------------------------------------
Certificate Group and as to any Distribution Date, the amount by which (i)
the sum of the Class Certificate Principal Amounts of all the Certificates
and the Component Principal Amounts of all the Components in the related
Certificate Group (after giving effect to the distribution of principal and
the application of Realized Losses in reduction of the Certificate Principal
Amounts of the related Certificates and the Component Principal Amounts of
the related Components on such Distribution Date) exceeds (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Mortgage
Pool on the first day of the month of such Distribution Date.
Subordinate Class Percentage: With respect to any Distribution Date
----------------------------
and any Class of Subordinate Certificates or any Component, the percentage
obtained by dividing the Class Certificate Principal Amount of such Class or
the Component Principal Amount of such Component immediately prior to such
Distribution Date by the sum of the Component Principal Amounts of all
Components in the related Certificate Group immediately prior to such date.
Subordinate Percentage: With respect to any Distribution Date and
----------------------
each Certificate Group, the difference between 100% and the related Senior
Percentage for such Distribution Date.
Subordinate Prepayment Percentage: With respect to any Distribution
---------------------------------
Date and each Certificate Group, the difference between 100% and the related
Senior Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: For any Distribution Date
-----------------------------------------
and each Certificate Group, the sum of the following:
(i) the product of (a) the related Subordinate Percentage for such
date and (b) the principal portion (multiplied by the applicable Non-AP
Percentage, in the case of Pool 2) of each Scheduled Payment (without
giving effect to any Debt Service Reduction occurring prior to the
Bankruptcy Coverage Termination Date), other than any Balloon Payment,
on a Mortgage Loan in the related Mortgage Pool due during the related
Due Period;
(ii) the product of (a) the related Subordinate Prepayment
Percentage for such date and (b) each of the following amounts
(multiplied by the applicable Non-AP Percentage, in the case of Pool 2):
(1) each Principal Prepayment on the Mortgage Loans in the related
Mortgage Pool collected during the applicable Prepayment Period, (2)
each other unscheduled collection, including Insurance Proceeds and net
Liquidation Proceeds (other than with respect to any Mortgage Loan in
the related Mortgage Pool that was finally liquidated during the
applicable Prepayment Period), representing or allocable to recoveries
of principal received during the applicable Prepayment Period), (3) the
principal portion of all proceeds of the purchase of any Mortgage Loan
in the related Mortgage Pool (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Trustee with respect to the applicable Prepayment
Period, and (4) the principal portion of each Balloon Payment received
during the related Due Period;
(iii) with respect to unscheduled recoveries allocable to principal
of any Mortgage Loan in the related Mortgage Pool that was finally
liquidated during the applicable Prepayment Period, the related net
Liquidation Proceeds allocable to principal (multiplied by the
applicable Non-AP Percentage, in the case of Pool 2), less any related
amount paid pursuant to subsection (iii) of the definition of Senior
Principal Distribution Amount for the related Certificate Group; and
(iv) any amounts described in clauses (i) through (iii) for any
previous Distribution Date that remain unpaid;
TAC Amount: As to any Distribution Date and any Class of TAC
----------
Certificates and any TAC Component, the amount designated as such for such
Distribution Date and such Class or Component as set forth in the Principal
Amount Schedules.
TAC Certificate: None.
---------------
TAC Component: None.
-------------
Tax Matters Person: The "tax matters person" as specified in the
------------------
REMIC Provisions.
Termination Price: As defined in Section 7.01 hereof.
-----------------
Title Insurance Policy: A title insurance policy maintained with
----------------------
respect to a Mortgage Loan.
Trust Fund: The corpus of the trust created pursuant to this
----------
Agreement, consisting of the Mortgage Loans, the assignment of the
Depositor's rights under the Mortgage Loan Sale Agreement, such amounts as
shall from time to time be held in the Collection Account, the Certificate
Account and any Escrow Account, the Insurance Policies, any REO Property and
the other items referred to in, and conveyed to the Trustee under, Section
2.01(a).
Trustee: First Union National Bank, or any successor in interest, or
-------
if any successor trustee or any co-trustee shall be appointed as herein
provided, then such successor trustee and such co-trustee, as the case may
be.
Trustee Fee: As to any Distribution Date, an amount equal to the
-----------
product of the Trustee Fee Rate and the aggregate Scheduled Principal Balance
of the Mortgage Loans as of the first day of the related Due Period.
Trustee Fee Rate: 0.0035% per annum.
----------------
Unscheduled Principal Amount: As to any Distribution Date, the sum
----------------------------
of the amounts described in clauses (ii)(b) and (iii) (without regard to the
reference in clause (iii) to the "Senior Prepayment Percentage") of the
definition of Senior Principal Distribution Amount for Group 2.
Voting Interests: The portion of the voting rights of all the
----------------
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this
Agreement, 97% of all Voting Interests shall be allocated to the Certificates
other than the Class 2-AX Certificates, and 3% of all Voting Interests shall
be allocated to the Class 2-AX Certificates. Voting Interests allocated to
the Class 2-AX Certificates shall be allocated among the Certificates of such
Class in proportion to their Notional Amounts. Voting Interests shall be
allocated among the other Classes of Certificates (and among the Certificates
within each such Class) in proportion to their Class Certificate Principal
Amounts (or Certificate Principal Amounts).
Section 1.02. Calculations Respecting Mortgage Loans. Calculations
--------------------------------------
required to be made pursuant to this Agreement with respect to any Mortgage
Loan in the Trust Fund shall be made based upon current information as to the
terms of the Mortgage Loans and reports of payments received from the
Mortgagor on such Mortgage Loans and payments to be made to the Trustee as
supplied to the Trustee by the Master Servicer. The Trustee shall not be
required to recompute, verify or recalculate the information supplied to it
by the Master Servicer.
Section 1.03. Calculations Respecting Accrued Interest. Accrued
----------------------------------------
interest, if any, on any Certificate shall be calculated based upon a 360-day
year consisting of twelve 30-day months.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
-----------------------------------------------------
Mortgage Loans. (a) Concurrently with the execution and delivery of this
--------------
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, in trust, all the
right, title and interest of the Depositor in and to the Mortgage Loans.
Such conveyance includes, without limitation, the right to all distributions
of principal and interest received on or with respect to the Mortgage Loans
on and after the Cut-off Date (other than payments of principal and interest
due on or before such date), together with all of the Depositor's right,
title and interest in and to the Collection Account and all amounts from time
to time credited to and the proceeds of the Collection Account, the
Certificate Account and all amounts from time to time credited to and the
proceeds of the Certificate Account, any Escrow Account established pursuant
to Section 9.06 hereof and all amounts from time to time credited to and the
proceeds of any such Escrow Account, any REO Property and the proceeds
thereof, the Depositor's rights under any Insurance Policies related to the
Mortgage Loans, and the Depositor's security interest in any collateral
pledged to secure the Mortgage Loans, including the Mortgaged Properties and
any Additional Collateral, to have and to hold, in trust; and the Trustee
declares that, subject to the review provided for in Section 2.02, it has
received and shall hold the Trust Fund, as trustee, in trust, for the benefit
and use of the Holders of the Certificates and for the purposes and subject
to the terms and conditions set forth in this Agreement, and, concurrently
with such receipt, has caused to be executed, authenticated and delivered to
or upon the order of the Depositor, in exchange for the Trust Fund,
Certificates in the authorized denominations evidencing the entire ownership
of the Trust Fund.
Concurrently with the execution and delivery of this agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest
under the Mortgage Loan Sale Agreement, including all rights of the Seller
under the Servicing Agreements to the extent assigned thereunder, and
delegates its obligations thereunder. The Trustee hereby accepts such
assignment and delegation, and shall be entitled to exercise all rights of
the Depositor under the Mortgage Loan Sale Agreement as if, for such purpose,
it were the Depositor.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and
deposited with, the Trustee, and/or any custodian acting on the Trustee's
behalf, if applicable, the following documents or instruments with respect to
each Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the Trustee, or
in blank (in each case, with all necessary intervening endorsements as
applicable);
(ii) the original of any guarantee executed in connection with the
Mortgage Note, assigned to the Trustee;
(iii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original recorded Mortgage with evidence of recording
indicated thereon. If, in connection with any Mortgage Loan, the
Depositor cannot deliver the Mortgage with evidence of recording thereon
on or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost, the Depositor shall deliver or
cause to be delivered to the Trustee (or its custodian), in the case of
a delay due to recording, a true copy of such Mortgage, pending delivery
of the original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such Mortgage delivered to the
Trustee (or its custodian) is a true copy and that the original of such
Mortgage has been forwarded to the public recording office, or, in the
case of a Mortgage that has been lost, a copy thereof (certified as
provided for under the laws of the appropriate jurisdiction) and a
written Opinion of Counsel acceptable to the Trustee and the Depositor
that an original recorded Mortgage is not required to enforce the
Trustee's interest in the Mortgage Loan;
(iv) The original of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loans, or, as to any
assumption, modification or substitution agreement which cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy
of such assumption, modification or substitution agreement, pending
delivery of the original thereof, together with an Officer's Certificate
of the Depositor certifying that the copy of such assumption,
modification or substitution agreement delivered to the Trustee (or its
custodian) is a true copy and that the original of such agreement has
been forwarded to the public recording office;
(v) with respect to any Mortgage Loan other than a Cooperative
Loan, the original Assignment of Mortgage for each Mortgage Loan;
(vi) If applicable, such original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain
of assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable
to the Trustee that such original Intervening Assignment is not required
to enforce the Trustee's interest in the Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or certificate,
if private mortgage guaranty insurance is required;
(viii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title;
(ix) the original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage or as to any
security agreement, chattel mortgage or their equivalent that cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such document has been delivered for
recordation, a photocopy of such document, pending delivery of the
original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such security agreement, chattel
mortgage or their equivalent delivered to the Trustee (or its custodian)
is a true copy and that the original of such document has been forwarded
to the public recording office;
(x) with respect to any Cooperative Loan, the Cooperative Loan
Documents; and
(xi) in connection with any pledge of Additional Collateral, the
original additional collateral pledge and security agreement executed in
connection therewith, assigned to the Trustee.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
(c) Assignments of Mortgage shall be recorded; provided, however, that
such Assignments need not be recorded if, in the Opinion of Counsel (which
must be Independent counsel) acceptable to the Trustee and the Rating
Agencies, recording in such states is not required to protect the Trustee's
interest in the related Mortgage Loans. Subject to the preceding sentence,
as soon as practicable after the Closing Date, the Trustee, at the expense of
the Depositor, shall cause to be properly recorded in each public recording
office where the Mortgages are recorded each Assignment of Mortgage referred
to in subsection (b)(v) above.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee under clause (b)(viii) above and is not so
delivered, the Depositor will provide a copy of such Title Insurance Policy
to the Trustee as promptly as practicable after the execution and delivery
hereof, but in any case within 180 days of the Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee an Officer's
Certificate which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited
in the applicable Collection Account pursuant to Section 4.01 have been so
deposited. All original documents that are not delivered to the Trustee
shall be held by the Master Servicer or the applicable Servicer in trust for
the benefit of the Trustee and the Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
----------------------------------------------
Documentation for Trust Fund. (a) The Trustee, by execution and delivery
----------------------------
hereof, acknowledges receipt of the Mortgage Files pertaining to the Mortgage
Loans listed on the Mortgage Loan Schedule, subject to review thereof by the
Trustee, or by the applicable Custodian on behalf of the Trustee, under this
Section 2.02. The Trustee, or the applicable Custodian on behalf of the
Trustee, will execute and deliver on the Closing Date an Initial
Certification in the form annexed hereto as Exhibit B-1.
(b) Within 45 days after the Closing Date, the applicable Custodian
will, on behalf of the Trustee and for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that all required
documents set forth in Section 2.01 have been received and appear on their
face to contain the requisite signatures by or on behalf of the respective
parties thereto, and shall deliver to the Depositor and the Master Servicer
an Interim Certification in the form annexed hereto as Exhibit B-2 to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all of the applicable documents specified in Section
2.01(b) are in its possession and (ii) such documents have been reviewed by
it and appear to relate to such Mortgage Loan. The Trustee, or the
applicable Custodian on behalf of the Trustee, shall make sure that the
documents are executed and endorsed, but shall be under no duty or obligation
to inspect, review or examine any such documents, instruments, certificates
or other papers to determine that the same are valid, binding, legally
effective, properly endorsed, genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded or are in
recordable form or that they are other than what they purport to be on their
face. Neither the Trustee nor any Custodian shall have any responsibility
for verifying the genuineness or the legal effectiveness of or authority for
any signatures of or on behalf of any party or endorser.
(c) If in the course of the review described in paragraph (b) above the
Trustee or the applicable Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear
regular on its face (i.e., is mutilated, damaged, defaced, torn or otherwise
physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule (each, a "Material Defect"), the
Trustee, or the applicable Custodian on behalf of the Trustee, shall promptly
identify the Mortgage Loan to which such Material Defect relates in the
Interim Certificate delivered to the Depositor or the Master Servicer (and to
the Trustee). Within 90 days of its receipt of such notice, the Depositor
shall be required to cure such Material Defect (and, in such event, the
Depositor shall provide the Trustee with an Officer's Certificate confirming
that such cure has been effected). If the Depositor does not so cure such
Material Defect, it shall, if a loss has been incurred with respect to such
Mortgage Loan that would, if such Mortgage Loan were not purchased from the
Trust Fund, constitute a Realized Loss, and such loss is attributable to the
failure of the Depositor to cure such Material Defect, repurchase the related
Mortgage Loan from the Trust Fund at the Purchase Price. A loss shall be
deemed to be attributable to the failure of the Depositor to cure a Material
Defect if, as determined by the Depositor, upon mutual agreement acting in
good faith, absent such Material Defect, such loss would not have been
incurred. Within the two year period following the Closing Date, the
Depositor may, in lieu of repurchasing a Mortgage Loan pursuant to this
Section 2.02, substitute for such Mortgage Loan a Qualifying Substitute
Mortgage Loan subject to the provisions of Section 2.05. The failure of the
Trustee or the applicable Custodian to give the notice contemplated herein
within 45 days after the Closing Date shall not affect or relieve the
Depositor of its obligation to repurchase any Mortgage Loan pursuant to this
Section 2.02 or any other Section of this Agreement requiring the repurchase
of Mortgage Loans from the Trust Fund.
(d) Prior to the first anniversary of the Closing Date, the Trustee, or
the applicable Custodian, shall deliver to the Depositor and the Master
Servicer a Final Certification substantially in the form annexed hereto as
Exhibit B-3 evidencing the completeness of the Mortgage Files in its
possession or control.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
Section 2.03. Representations and Warranties of the Depositor. The
-----------------------------------------------
Depositor hereby represents and warrants to the Trustee and the Master
Servicer, as of the Closing Date or such other date as is specified, that:
(a) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter into
and perform its obligations under this Agreement, and to create the
trust pursuant hereto;
(b) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part
of the Depositor; neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding on
the Depositor or its properties or the certificate of incorporation or
bylaws of the Depositor;
(c) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(d) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee and the Master Servicer, constitutes a valid and binding
obligation of the Depositor enforceable against it in accordance with
its terms except as such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally and (B) general
principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(e) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against
or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement; and
(f) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens
of current real property taxes and assessments not yet due and payable
and, if the related Mortgaged Property is a condominium unit, any lien
for common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the related Mortgaged
Property is located and specifically referred to in the lender's Title
Insurance Policy or attorney's opinion of title and abstract of title
delivered to the originator of such Mortgage Loan, and (3) such other
matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the benefits
of the security intended to be provided by the Mortgage, of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign each Mortgage Loan pursuant to this Agreement.
Section 2.04. Discovery of Breach. It is understood and agreed that
-------------------
the representations and warranties set forth in Section 2.03 and the
representations and warranties of the Seller set forth in the Mortgage Loan
Sale agreement and assigned to the Trustee by the Depositor hereunder survive
delivery of the Mortgage Files and the Assignment of Mortgage of each
Mortgage Loan to the Trustee and shall continue throughout the term of this
Agreement. Upon discovery by either the Depositor, the Master Servicer or
the Trustee of a breach of any of such representations and warranties that
adversely and materially affects the value of the related Mortgage Loan, the
party discovering such breach shall give prompt written notice to the other
parties. Within 90 days of the discovery of breach with respect to the
representations and warranties given to the Trustee and the Master Servicer,
the Depositor or the Seller, as applicable, shall either (a) cure such breach
in all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Trustee at the Purchase Price or (c)
within the two year period following the Closing Date, substitute a
Qualifying Substitute Mortgage Loan for the affected Mortgage Loan.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage
------------------------------------------------
Loans. (a) With respect to any Mortgage Loan repurchased by the
-----
Depositor pursuant to this Article II or by the Seller pursuant to the
Mortgage Loan Sale Agreement, the principal portion of the funds received by
the Trustee in respect of such repurchase of a Mortgage Loan will be
considered a Principal Prepayment and shall be deposited in the Collection
Account. The Trustee, upon receipt of the full amount of the Purchase Price
for a Deleted Mortgage Loan, or upon receipt of the Mortgage File for a
Qualifying Substitute Mortgage Loan substituted for a Deleted Mortgage Loan,
shall release or cause to be released and reassign to the Depositor or the
Seller, as applicable, the related Mortgage File for the Deleted Mortgage
Loan and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as
shall be necessary to vest in the Depositor or its designee or assignee title
to any Deleted Mortgage Loan released pursuant hereto, free and clear of all
security interests, liens and other encumbrances created by this Agreement,
which instruments shall be prepared by the Trustee, and the Trustee shall
have no further responsibility with respect to the Mortgage File relating to
such Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the Depositor must deliver to the Trustee
the Mortgage File for the Qualifying Substitute Mortgage Loan containing the
documents set forth in Section 2.01(b) along with a written certification
certifying as to the delivery of such Mortgage File and containing the
granting language set forth in Section 2.01(a); and (ii) the Depositor will
be deemed to have made each of the representations and warranties set forth
in Section 2.03(f). As soon as practicable after the delivery of any
Qualifying Substitute Mortgage Loan hereunder, the Trustee shall cause the
Assignment of Mortgage with respect to such Qualifying Substitute Mortgage
Loan to be recorded if required pursuant to the first sentence of Section
2.01(c).
(c) Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Qualifying Substitute
Mortgage Loan for a Deleted Mortgage Loan shall be made unless the Trustee
has received an Opinion of Counsel (at the expense of the party seeking to
make the substitution) that, under current law, such substitution will not
(A) affect adversely the status of any REMIC established hereunder as a
REMIC, or of the related "regular interests" as "regular interests" in any
such REMIC, or (B) cause any such REMIC to engage in a "prohibited
transaction" or prohibited contribution pursuant to the REMIC Provisions.
Section 2.06. Grant Clause. It is intended that the conveyance of
------------
the Depositor's right, title and interest in and to property constituting the
Trust Fund pursuant to this Agreement shall constitute, and shall be
construed as, a sale of such property and not grant of a security interest to
secure a loan. However, if such conveyance is deemed to be in respect of a
loan, it is intended that: (1) the rights and obligations of the parties
shall be established pursuant to the terms of this Agreement; (2) the
Depositor hereby grants to the Trustee for benefit of the Holders of the
Certificates a first priority security interest in all of the Depositor's
right, title and interest in, to and under, whether now owned or hereafter
acquired, the Trust Fund and all proceeds of any and all property
constituting the Trust Fund to secure payment of the Certificates; and (3)
this Agreement shall constitute a security agreement under applicable law.
If such conveyance is deemed to be in respect of a loan and the Trust created
by this Agreement terminates prior to the satisfaction of the claims of any
Person holding any Certificate, the security interest created hereby shall
continue in full force and effect and the Trustee shall be deemed to be the
collateral agent for the benefit of such Person, and all proceeds shall be
distributed as herein provided.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. (a) The Certificates shall be
----------------
issuable in registered form only. The Book-Entry Certificates will be
evidenced by one or more certificates, beneficial ownership of which will be
held in the dollar denominations in Certificate Principal Amount or Notional
Principal Amount, as applicable, or in the Percentage Interests, specified
herein. Each Class of Book-Entry Certificates other than the Class 2-AX
Certificates will be issued in the minimum denominations in Certificate
Principal Amount specified in the Preliminary Statement hereto and in
integral multiples of $1,000 in excess thereof. The Class 2-AX Certificates
will be issued in minimum Percentage Interests of 2.0%. Each class of Non-
Book-Entry Certificates other than the Residual Certificates will be issued
in definitive, fully registered form in the minimum denominations in
Certificate Principal Amount specified in the Preliminary Statement hereto
and in integral multiples of $1 in excess thereof. Each Residual Certificate
will be issued as a single Certificate and maintained in definitive, fully
registered form in a minimum denomination equal to 100% of the Percentage
Interest of such Class. The Certificates may be issued in the form of
typewritten certificates. One Certificate of each Class of Certificates
other than the Residual Certificates may be issued in any denomination in
excess of the minimum denomination.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Each Certificate shall,
on original issue, be authenticated by the Trustee upon the order of the
Depositor upon receipt by the Trustee of the Mortgage Files described in
Section 2.01. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form
provided for herein, executed by an authorized officer of the Trustee or the
Authenticating Agent, if any, by manual signature, and such certification
upon any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered hereunder.
All Certificates shall be dated the date of their authentication. At any
time and from time to time after the execution and delivery of this
Agreement, the Depositor may deliver Certificates executed by the Depositor
to the Trustee or the Authenticating Agent for authentication and the Trustee
or the Authenticating Agent shall authenticate and deliver such Certificates
as in this Agreement provided and not otherwise.
Section 3.02. Registration. The Trustee is hereby appointed, and
------------
hereby accepts its appointment as, Certificate Registrar in respect of the
Certificates and shall maintain books for the registration and for the
transfer of Certificates (the "Certificate Register"). The Trustee may
appoint a bank or trust company to act as Certificate Registrar. A
registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new
successor may be appointed in accordance with the procedures and requirements
set forth in Sections 6.06 and 6.07 hereof with respect to the resignation,
discharge or removal of the Trustee and the appointment of a successor
Trustee. The Certificate Registrar may appoint, by a written instrument
delivered to the Holders and the Master Servicer, any bank or trust company
to act as co-registrar under such conditions as the Certificate Registrar may
prescribe; provided, however, that the Certificate Registrar shall not be
relieved of any of its duties or responsibilities hereunder by reason of such
appointment.
Section 3.03. Transfer and Exchange of Certificates. (a) A
-------------------------------------
Certificate (other than Book-Entry Certificates which shall be subject to
Section 3.09 hereof) may be transferred by the Holder thereof only upon
presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall
be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver to the transferee, one or more new Certificates of the same Class and
evidencing, in the aggregate, the same aggregate Certificate Principal Amount
as the Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
registration of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the
same obligations, and will be entitled to the same rights and privileges, as
the Certificates surrendered. No service charge shall be made to a
Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute, and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or the Placement Agent, an affiliate (as defined in Rule 144(a)(1) under
the ▇▇▇▇ ▇▇▇) of the Depositor or the Placement Agent or (y) being made
to a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act") by a transferor who has
provided the Trustee with a certificate in the form of Exhibit F hereto;
and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
Act by a transferor who furnishes to the Trustee a letter of the
transferee substantially in the form of Exhibit G hereto.
(d) (i) No transfer of an ERISA-Restricted Certificate in the
form of a Definitive Certificate shall be made to any Person unless the
Trustee has received (A) a certificate substantially in the form of Exhibit H
hereto from such transferee or (B) an Opinion of Counsel satisfactory to the
Trustee and the Depositor to the effect that the purchase and holding of such
a Certificate will not constitute or result in the assets of the Trust Fund
being deemed to be "plan assets" subject to the prohibited transactions
provisions of ERISA or Section 4975 of the Code and will not subject the
Trustee or the Depositor to any obligation in addition to those undertaken in
the Agreement; provided, however, that the Trustee will not require such
certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an opinion to the
effect that the purchase and holding of an ERISA-Restricted Certificate by a
Plan or a Person that is purchasing or holding such a Certificate with the
assets of a Plan will not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code. The preparation and delivery of
the certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Trustee or the Depositor. Notwithstanding the foregoing, no
opinion or certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith; provided, however, that the Certificate Registrar shall
have no obligation to require such payment or to determine whether or not any
such tax or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to a Disqualified Organization.
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto
as Exhibit D-1 representing and warranting, among other things, that such
transferee is neither a Disqualified Organization nor an agent or nominee
acting on behalf of a Disqualified Organization (any such transferee, a
"Permitted Transferee"), and the proposed transferor shall deliver to the
Trustee an affidavit in substantially the form attached hereto as Exhibit D-
2. In addition, the Trustee may (but shall have no obligation to) require,
prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, addressed to the Depositor and
the Trustee satisfactory in form and substance to the Depositor, that such
proposed transferee or, if the proposed transferee is an agent or nominee,
the proposed beneficial owner, is not a Disqualified Organization.
Notwithstanding the registration in the Certificate Register of any transfer,
sale, or other disposition of a Residual Certificate to a Disqualified
Organization or an agent or nominee acting on behalf of a Disqualified
Organization, such registration shall be deemed to be of no legal force or
effect whatsoever and such Disqualified Organization (or such agent or
nominee) shall not be deemed to be a Certificateholder for any purpose
hereunder, including, but not limited to, the receipt of distributions on
such Residual Certificate. The Trustee shall not be under any liability to
any person for any registration or transfer of a Residual Certificate to a
Disqualified Organization or for the maturity of any payments due on such
Residual Certificate to the Holder thereof or for taking any other action
with respect to such Holder under the provisions of the Agreement, so long as
the transfer was effected in accordance with this Section 3.03(f), unless the
Trustee shall have actual knowledge at the time of such transfer or the time
of such payment or other action that the transferee is a Disqualified
Organization (or an agent or nominee thereof). The Trustee shall be entitled
to recover from any Holder of a Residual Certificate that was a Disqualified
Organization (or an agent or nominee thereof) at the time it became a Holder
or any subsequent time it became a Disqualified Organization all payments
made on such Residual Certificate at and after either such times (and all
costs and expenses, including but not limited to attorneys' fees, incurred in
connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Trustee shall be paid and delivered to the last
preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section 3.03(f), the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of such registration of
transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of transfer of a Residual
Certificate that is in fact not permitted by this Section 3.03(f), for making
any payment due on such Certificate to the registered Holder thereof or for
taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered upon receipt of the
affidavit described in the preceding paragraph of this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's acceptance
thereof, shall be deemed for all purposes to have consented to the provisions
of this section.
Section 3.04. Cancellation of Certificates. Any Certificate
surrendered for registration of transfer or exchange shall be cancelled------
---------------------- and retained in accordance with normal retention
policies with respect to cancelled certificates maintained by the Trustee or
the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate
---------------------------
is mutilated and is surrendered to the Trustee or any Authenticating Agent or
(ii) the Trustee or any Authenticating Agent receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and there
is delivered to the Trustee or the Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Depositor and any Authenticating Agent that such
destroyed, lost or stolen Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and the Trustee or any Authenticating
Agent shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee and Authenticating Agent may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or the
Authenticating Agent) connected therewith. Any replacement Certificate
issued pursuant to this Section 3.05 shall constitute complete and
indefeasible evidence of ownership in the applicable Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.06. Persons Deemed Owners. Subject to the provisions of
---------------------
Section 3.09 with respect to Book-Entry Certificates, the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar and any agent of any
of them may treat the Person in whose name any Certificate is registered upon
the books of the Certificate Registrar as the owner of such Certificate for
the purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and
for all other purposes whatsoever, and neither the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar nor any agent of any of them
shall be affected by notice to the contrary.
Section 3.07. Temporary Certificates. (a) Pending the preparation
----------------------
of definitive Certificates, upon the order of the Depositor, the Trustee
shall execute and shall authenticate and deliver temporary Certificates that
are printed, lithographed, typewritten, mimeographed or otherwise produced,
in any authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced
by their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in
exchange therefor a like aggregate Certificate Principal Amount of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08. Appointment of Paying Agent. The Trustee may appoint
---------------------------
a Paying Agent (which may be the Trustee) for the purpose of making
distributions to Certificateholders hereunder. The Trustee shall cause such
Paying Agent to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent will
hold all sums held by it for the payment to Certificateholders in an Eligible
Account in trust for the benefit of the Certificateholders entitled thereto
until such sums shall be paid to the Certificateholders. All funds remitted
by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date
and any amounts not so paid shall be returned on such Distribution Date to
the Trustee. If the Paying Agent is not the Trustee, the Trustee shall cause
to be remitted to the Paying Agent on or before the Business Day prior to
each Distribution Date, by wire transfer in immediately available funds, the
funds to be distributed on such Distribution Date. Any Paying Agent shall be
either a bank or trust company or otherwise authorized under law to exercise
corporate trust powers.
Section 3.09. Book-Entry Certificates. (a) Each Class of
-----------------------
Book-Entry Certificates, upon original issuance, shall be issued in the form
of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Depositor. The Book-Entry
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of the Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's
interest in the Book-Entry Certificates, except as provided in Section
3.09(c). Unless Definitive Certificates have been issued to Certificate
Owners of Book-Entry Certificates pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Depositor, the Master Servicer, the Paying Agent, the
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Book-Entry
Certificates) as the authorized representatives of the Certificate
Owners and the Clearing Agency shall be responsible for crediting the
amount of such distributions to the accounts of such Persons entitled
thereto, in accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the
Book-Entry Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Trustee shall give all such notices and communications specified herein to be
given to Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i)(A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after
the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Certificate
Principal Amount of a Class of Book-Entry Certificates identified as such to
the Trustee by an Officer's Certificate from the Clearing Agency advise the
Trustee and the Clearing Agency through the Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the Certificate Owners of a
Class of Book-Entry Certificates, the Trustee shall notify or cause the
Certificate Registrar to notify the Clearing Agency to effect notification to
all Certificate Owners, through the Clearing Agency, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall issue the
Definitive Certificates. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable, with
respect to such Definitive Certificates and the Trustee shall recognize the
holders of the Definitive Certificates as Certificateholders hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account. (a) On the Closing Date, the
------------------
Master Servicer shall open and shall thereafter maintain an account held in
trust (the "Collection Account"), entitled "Norwest Bank Minnesota, National
Association, as Master Servicer, in trust for the benefit of the Holders of
Structured Asset Securities Corporation Mortgage Pass-Through Certificates,
Series 1997-2." The Collection Account shall relate solely to the
Certificates issued by the Trust Fund hereunder, and funds in such Collection
Account shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an
existing Collection Account ceases to be an Eligible Account, the Master
Servicer shall establish a new Collection Account that is an Eligible Account
within 30 days and transfer all funds on deposit in such existing Collection
Account into such new Collection Account.
(c) The Master Servicer will give to the Trustee prior written notice
of the name and address of the depository institution at which the Collection
Account is maintained and the account number of such Collection Account. The
Master Servicer shall take such actions as are necessary to cause the
depository institution holding the Collection Account to hold such account in
the name of the Trustee (subject to such Master Servicer's right to direct
payments and investments and its rights of withdrawal) under this Agreement.
On the Deposit Date, the entire amount on deposit in the Collection Account
(subject to permitted withdrawals set forth in Section 4.02), other than
amounts not included in the Available Distribution Amount for such
Distribution Date, shall be remitted to the Trustee for deposit into the
Certificate Account by wire transfer in immediately available funds. The
Master Servicer, at its option, may choose to make daily remittances from the
Collection Account to the Trustee for deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing
Date, any amounts representing Scheduled Payments on the Mortgage Loans due
after the Cut-off Date and received by the Master Servicer on or before the
Closing Date. Thereafter, the Master Servicer shall deposit or cause to be
deposited in the Collection Account on the applicable Remittance Date the
following amounts received or payments made by it (other than in respect of
principal of and interest on the Mortgage Loans due on or before the Cut-Off
Date):
(i) all payments on account of principal, including Principal
Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
(other than payments due prior to the Cut-off Date), net of the
Servicing Fee and Master Servicing Fee with respect to each such
Mortgage Loan, but only to the extent of the amount permitted to be
withdrawn or withheld from the Collection Account in accordance with
Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with respect to
a Mortgage Loan not otherwise specified in this paragraph (d), including
all Liquidation Proceeds with respect to the Mortgage Loans and REO
Property, and all amounts received in connection with the operation of
any REO Property, net of any unpaid Servicing Fees and Master Servicing
Fees with respect to such Mortgage Loans (but only to the extent of the
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21);
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or any Servicer
pursuant to Section 5.04; and
(vi) all proceeds of any Mortgage Loan repurchased by the
Depositor, the Seller, the Master Servicer or any other Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments (selected by and at the written direction of the Master Servicer)
which shall mature not later than the earlier of (a) the Deposit Date (except
that if such Eligible Investment is an obligation of the Trustee or the
Paying Agent, if other than the Trustee, and such Collection Account is
maintained with the Trustee or the Paying Agent, if other than the Trustee,
then such Eligible Investment shall mature not later than such applicable
Distribution Date) or (b) the day on which the funds in such Collection
Account are required to be remitted to the Trustee for deposit into the
Certificate Account, and any such Eligible Investment shall not be sold or
disposed of prior to its maturity. All such Eligible Investments shall be
made in the name of the Trustee (in its capacity as such) or its nominee.
All income and gain realized from any such investment shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time, subject to Section 5.06, and shall not be part of
the Trust Fund. The amount of any losses incurred in respect of any such
investments shall be deposited in such Collection Account by the Master
Servicer out of its own funds, without any right of reimbursement therefor,
immediately as realized. The foregoing requirements for deposit in the
Collection Account are exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments of interest on
funds in the Collection Account and payments in the nature of prepayment
fees, late payment charges or assumption fees need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer or the applicable Servicer as additional servicing compensation. If
the Master Servicer deposits in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount
from such Collection Account.
Section 4.02. Application of Funds in the Collection Account. The
----------------------------------------------
Master Servicer may, from time to time, make, or cause to be made,
withdrawals from the Collection Account for the following purposes:
(i) to reimburse itself or any Servicer for Advances made by it or
by such Servicer pursuant to Section 5.04; the Master Servicer's right
to reimburse itself pursuant to this subclause (i) is limited to amounts
received on or in respect of particular Mortgage Loans (including, for
this purpose, Liquidation Proceeds and amounts representing Insurance
Proceeds with respect to the property subject to the related Mortgage)
which represent late recoveries (net of the applicable Servicing Fee and
the Master Servicing Fee) of payments of principal or interest
respecting which any such Advance was made, it being understood, in the
case of any such reimbursement, that the Master Servicer's or Servicer's
right thereto shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or any Servicer, following a final
liquidation of a Mortgage Loan, for any Advances made by it or by such
Servicer that it determines in good faith will not be recoverable from
amounts representing late recoveries of payments of principal or
interest respecting the particular Mortgage Loan as to which such
Advance was made or from Liquidation Proceeds or Insurance Proceeds with
respect to such Mortgage Loan, it being understood, in the case of any
such reimbursement, that such Master Servicer's or Servicer's right
thereto shall be prior to the rights of the Certificateholders;
(iii) to reimburse itself or any Servicer from Liquidation Proceeds
for Liquidation Expenses and for amounts expended by it or by such
Servicer pursuant to Sections 9.20 and 9.22(a) in good faith in
connection with the restoration of damaged property and, to the extent
that Liquidation Proceeds after such reimbursement exceed the unpaid
principal balance of the related Mortgage Loan, together with accrued
and unpaid interest thereon at the applicable Mortgage Rate less the
applicable Servicing Fee and the Master Servicing Fee for such Mortgage
Loan to the Due Date next succeeding the date of its receipt of such
Liquidation Proceeds, to pay to itself out of such excess the amount of
any unpaid assumption fees, late payment charges or other Mortgagor
charges on the related Mortgage Loan and to retain any excess remaining
thereafter as additional servicing compensation, it being understood, in
the case of any such reimbursement or payment, that such Master
Servicer's or Servicer's right thereto shall be prior to the rights of
the Certificateholders;
(iv) in the event it has elected not to pay itself the Master
Servicing Fee out of any Mortgagor payment on account of interest or
other recovery with respect to a particular Mortgage Loan prior to the
deposit of such Mortgagor payment or recovery in the Collection Account,
to pay to itself the Master Servicing Fee, as reduced pursuant to
Section 5.06, from any Mortgagor payment as to interest or such other
recovery with respect to that Mortgage Loan, as is permitted by this
Agreement;
(v) to reimburse itself or any Servicer for expenses incurred by
and recoverable by or reimbursable to it or such Servicer pursuant to
Section 9.04, 9.06, 9.16 or 9.22(a), and to reimburse itself for any
expenses reimbursable to it pursuant to Section 10.01(c);
(vi) to pay to the Depositor (or to itself) with respect to each
Mortgage Loan or REO Property acquired in respect thereof that has been
repurchased by the Depositor (or by itself) pursuant to this Agreement,
all amounts received thereon and not distributed on the date on which
the related repurchase was effected, and to pay to the applicable Person
any Advances to the extent specified in the definition of Purchase
Price;
(vii) subject to Section 5.04, to pay to itself income earned on the
investment of funds deposited in the Collection Account;
(viii) to make payments to the Trustee for deposit into the
Certificate Account in the amounts and in the manner provided for in
Section 4.04;
(ix) to make payment to itself and others pursuant to any provision
of this Agreement;
(x) to withdraw funds deposited in error in the Collection
Account;
(xi) to clear and terminate any Collection Account pursuant to
Section 7.02; and
(xii) to reimburse a successor Master Servicer (solely in its
capacity as successor Master Servicer), for any fee or advance
occasioned by a termination of the Master Servicer, and the assumption
of such duties by the Trustee or a successor Master Servicer appointed
by the Trustee pursuant to Section 6.14, in each case to the extent not
reimbursed by the terminated Master Servicer, it being understood, in
the case of any such reimbursement or payment, that the right of the
Master Servicer or the Trustee thereto shall be prior to the rights of
the Certificateholders.
In connection with withdrawals pursuant to subclauses (i), (ii), (iii),
(iv) and (vi) above, the Master Servicer's or Servicer's entitlement thereto
is limited to collections or other recoveries on the related Mortgage Loan.
The Master Servicer shall therefore keep and maintain a separate accounting
for each Mortgage Loan it master services for the purpose of justifying any
withdrawal from the Collection Account it maintains pursuant to such
subclause (i), (ii), (iii), (iv) and (vi).
Section 4.03. Reports to Certificateholders. (a) On each
-----------------------------
Distribution Date, the Trustee shall deliver or cause to be delivered by
first class mail to each Certificateholder a written report setting forth the
following information, by Mortgage Pool and Certificate Group, which
information the Master Servicer will determine (on the basis of information
obtained from the Servicers) and deliver to the Trustee no later than one
Business Day prior to such Distribution Date:
(i) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (and in
respect of any Component), other than any Class of Notional Certificates
(and any Notional Component), allocable to principal on the Mortgage
Loans, including Liquidation Proceeds and Insurance Proceeds, stating
separately the amount attributable to scheduled principal payments and
unscheduled payments in the nature of principal;
(ii) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (other
than any Class of Principal Only Certificates) allocable to interest,
including any Accrual Amount added to the Class Certificate Principal
Amount of any Class of Accrual Certificates;
(iii) the amount, if any, of any distribution to the Holders of the
Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to be made
by or on behalf of the Master Servicer and any Servicer with respect to
such Distribution Date, (B) the aggregate amount of such Advances
actually made, and (C) the amount, if any, by which (A) above exceeds
(B) above;
(v) the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the close of business on the last day of the related Due
Period, after giving effect to payments allocated to principal reported
under clause (i) above;
(vi) the Class Certificate Principal Amount (or Aggregate Notional
Amount) of each Class of Certificates as of such Distribution Date after
giving effect to payments allocated to principal reported under clause
(i) above (and to the addition of any Accrual Amount in the case of any
Class of Accrual Certificates), separately identifying any reduction of
any of the foregoing Certificate Principal Amounts due to Realized
Losses:
(vii) any Realized Losses realized with respect to the Mortgage
Loans (x) in the applicable Prepayment Period and (y) in the aggregate
since the Cut-off Date, stating separately the amount of Special Hazard
Losses, Fraud Losses and Bankruptcy Losses and the aggregate amount of
such Realized Losses, and the remaining Special Hazard Loss Amount,
Fraud Loss Amount and Bankruptcy Loss Amount;
(viii) the amount of the Master Servicing Fees, Servicing Fees and
Trustee Fee paid during the Due Period to which such distribution
relates;
(ix) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Trustee by the Master Servicer, (a)
remaining outstanding (b) delinquent one month, (c) delinquent two
months, (d) delinquent three or more months, and (e) as to which
foreclosure proceedings have been commenced as of the close of business
on the last Business Day of the calendar month immediately preceding the
month in which such Distribution Date occurs;
(x) the deemed principal balance of each REO Property as of the
close of business on the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the principal balance of such
Mortgage Loan and the number of such Mortgage Loans as of the close of
business on the Distribution Date in such preceding month;
(xii) with respect to substitution of Mortgage Loans in the
preceding calendar month, the Scheduled Principal Balance of each
Deleted Mortgage Loan, and of each Qualifying Substitute Mortgage Loan;
(xiii) the aggregate outstanding Interest Shortfalls and Net
Prepayment Interest Shortfalls, if any, for each Class of Certificates,
after giving effect to the distribution made on such Distribution Date;
(xiv) the Certificate Interest Rate applicable to such Distribution
Date with respect to each Class of Certificates;
(xv) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient
available amounts in the Certificate Account and the amounts actually
distributed); and
(xvi) any other "loan-level" information for any Mortgage Loans that
are delinquent three or more months and any REO Property held by the
Trust that is reported by the Master Servicer to the Trustee.
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall be expressed as a dollar amount per
$1,000 of original principal amount of Certificates.
(b) Upon the reasonable advance written request of any
Certificateholder that is a savings and loan, bank or insurance company,
which request, if received by the Trustee, will be promptly forwarded to the
Master Servicer, the Master Servicer shall provide, or cause to be provided,
(or, to the extent that such information or documentation is not required to
be provided by a Servicer under the applicable Servicing Agreement, shall use
reasonable efforts to obtain such information and documentation from such
Servicer, and provide) to such Certificateholder such reports and access to
information and documentation regarding the Mortgage Loans as such
Certificateholder may reasonably deem necessary to comply with applicable
regulations of the Office of Thrift Supervision or its successor or other
regulatory authorities with respect to investment in the Certificates;
provided, however, that the Master Servicer shall be entitled to be
reimbursed by such Certificateholder for such Master Servicer's actual
expenses incurred in providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trustee shall
send to each Person who at any time during the calendar year was a
Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable
such Holders to prepare their federal income tax returns. Such information
shall include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund. The
Master Servicer shall provide the Trustee with such information as is
necessary for the Trustee to prepare such reports.
Section 4.04. Certificate Account. (a) The Trustee shall establish
-------------------
and maintain in its name, as trustee, a special deposit trust account (the
"Certificate Account"), to be held in trust for the benefit of the
Certificateholders until disbursed pursuant to the terms of this Agreement.
The Certificate Account shall be an Eligible Account. If the existing
Certificate Account ceases to be an Eligible Account, the Trustee shall
establish a new Certificate Account that is an Eligible Account within 20
Business Days and transfer all funds on deposit in such existing Certificate
Account into such new Certificate Account. The Certificate Account shall
relate solely to the Certificates issued hereunder and funds in the
Certificate Account shall be held separate and apart from and shall not be
commingled with any other monies including, without limitation, other monies
of the Trustee held under this Agreement.
(b) The Trustee shall cause to be deposited into the Certificate
Account on the day on which, or, if such day is not a Business Day, the
Business Day immediately following the day on which, any monies are remitted
by the Master Servicer to the Trustee, all such amounts. The Trustee shall
make withdrawals from the Certificate Account only for the following
purposes:
(i) to withdraw amounts deposited in the Certificate Account in
error;
(ii) to pay itself any investment income earned with respect to
funds in the Certificate Account invested in Eligible Investments as set
forth in subsection (c) below;
(iii) to make payments of the Master Servicing Fee (to the extent
not already withheld or withdrawn from the Collection Account by the
Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders pursuant to
Article V; and
(v) to clear and terminate the Certificate Account pursuant to
Section 7.02.
(c) The Trustee shall invest, or cause to be invested, funds held in
the Certificate Account in Eligible Investments (which may be obligations of
the Trustee). All such investments must mature no later than the next
Distribution Date, and shall not be sold or disposed of prior to their
maturity. All such Eligible Investments will be made in the name of the
Trustee (in its capacity as such) or its nominee. All income and gain
realized from any such investment shall be compensation for the Trustee and
shall be subject to its withdrawal on order from time to time. The amount of
any losses incurred in respect of any such investments shall be paid by the
Trustee for deposit in the Certificate Account out of its own funds, without
any right of reimbursement therefor, immediately as realized.
(d) Not later than the fifth Business Day prior to each Distribution
Date, the Master Servicer shall provide to the Trustee in writing the amount,
if any, of the Master Servicing Fee payable to the Master Servicer as of such
Distribution Date out of funds held in the Certificate Account.
Section 4.05. Determination of LIBOR. (a) If the outstanding
----------------------
Certificates include any LIBOR Certificates, then on each LIBOR Determination
Date the Trustee shall determine LIBOR on the basis of the offered LIBOR
quotations of the Reference Banks as of 11:00 a.m. London time on such LIBOR
Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the
Reference Banks provide such offered quotations, LIBOR for the next
Interest Accrual Period will be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/16%);
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period will be whichever is the higher of (x) LIBOR as
determined on the previous LIBOR Determination Date or (y) the Reserve
Interest Rate. The "Reserve Interest Rate" will be either (A) the rate
per annum which the Trustee determines to be the arithmetic mean
(rounding such arithmetic mean upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month Eurodollar lending rates that New
York City banks selected by the Trustee are quoting, on the relevant
LIBOR Determination Date, to the principal London offices of leading
banks in the London interbank market or (B) in the event that the
Trustee can determine no such arithmetic mean, the lowest one-month
Eurodollar lending rate that the New York City banks selected by the
Trustee are quoting on such LIBOR Determination Date to leading European
banks; and
(iii) If on any LIBOR Determination Date the Trustee is required but
is unable to determine the Reserve Interest Rate in the manner provided
in paragraph (ii) above, LIBOR for the next Interest Accrual Period will
be LIBOR as determined on the previous LIBOR Determination Date, or, in
the case of the first LIBOR Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rates applicable to the
LIBOR Certificates for the relevant Interest Accrual Period, in the absence
of manifest error, will be final and binding. In all cases, the Trustee may
conclusively rely on quotations of LIBOR for the Reference Banks as such
quotations appear on the display designated "LIUS01M" on the Bloomberg
Financial Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading
banks engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) whose quotations appear on the "Bloomberg Screen LIUS01M Index
Page" (as described in the definition of LIBOR hereof) on the applicable
LIBOR Determination Date and (iii) which have been designated as such by the
Trustee and are able and willing to provide such quotations to the Trustee on
each LIBOR Determination Date. The Reference Banks initially shall be:
Barclay's plc, Bank of Tokyo, National Westminster Bank and Trust Company and
Bankers Trust Company. If any of the initial Reference Banks should be
removed from the Bloomberg Screen LIUS01M Index Page or in any other way fail
to meet the qualifications of a Reference Bank, the Trustee shall use its
best efforts to designate alternate Reference Banks.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. (a) Subject to Section 7.01
-----------------------
respecting the final distribution on the Certificates, on each Distribution
Date the Trustee or the Paying Agent shall make distributions in accordance
with this Article V. Such distributions shall be made by check mailed to
each Certificateholder's address as it appears on the Certificate Register of
the Certificate Registrar (which shall initially be the Trustee) or, upon
written request made to the Trustee at least three Business Days prior to the
related Distribution Date to any Certificateholder owning an aggregate
initial Certificate Principal Amount of at least $2,500,000, or, in the case
of a Class 2-AX Certificate, a Percentage Interest of at least 50%, by wire
transfer in immediately available funds to an account specified in the
request and at the expense of such Certificateholder; provided, however, that
the final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates,
the Residual Certificates will remain outstanding until the termination of
each REMIC and the payment in full of all other amounts due with respect to
the Residual Certificates and at such time such final payment in retirement
of any Residual Certificates will be made only upon presentation and
surrender of such Certificate at the Corporate Trust Office of the Trustee or
at the office of the New York Presenting Agent. If any payment required to
be made on the Certificates is to be made on a day that is not a Business
Day, then such payment will be made on the next succeeding Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Certificate Principal Amounts
(or initial Notional Amounts).
Section 5.02. Distributions from the Certificate Account. (a) On
------------------------------------------
each Distribution Date the Trustee (or the Paying Agent on behalf of the
Trustee) shall withdraw from the Certificate Account the Available
Distribution Amount with respect to each Mortgage Pool and shall, after
deduction of the Trustee Fee therefrom, distribute such amount to the Holders
of record of each Class of Certificates in the related Certificate Group in
the following order of priority:
(i) from the Available Distribution Amount for the related
Mortgage Pool, to each Class of Senior Certificates in the related
Certificate Group (other than any Class of Principal Only Certificates),
the Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Class's pro rata share (determined on the basis of
Accrued Certificate Interest otherwise distributable thereon) of any Net
Prepayment Interest Shortfalls for the related Mortgage Pool for such
Distribution Date; provided, however, that any shortfall in available
amounts shall be allocated among such Classes in proportion to the
amount of Accrued Certificate Interest (as so reduced) that would
otherwise be distributable thereon;
(ii) from the remaining Available Distribution Amount for the
related Mortgage Pool, to each Class of Senior Certificates in the
related Certificate Group (other than any Class of Principal Only
Certificates), any related Interest Shortfall for such Distribution
Date; provided, however, that any shortfall in available amounts shall
be allocated among such Classes in proportion to the Interest Shortfall
for each such Class on such Distribution Date;
(iii) from the remaining Available Distribution Amount for the
related Mortgage Pool, to the Senior Certificates of each Certificate
Group, as follows:
(A) to the Class 1-A Certificates, the Senior Principal
Distribution Amount for Pool 1 for such Distribution Date, in
reduction of the Class Certificate Principal Amount thereof, until
the Class Certificate Principal Amount thereof has been reduced to
zero; and
(B) to the Group 2 Senior Certificates other than the Class
2-AX Certificates, the Senior Principal Distribution Amount for
Pool 2 for such Distribution Date, in reduction of the Class
Certificate Principal Amounts of the Group 2 Senior Certificates,
concurrently as follows:
(1) to the Class 2-A4 Certificates, the Class 2-A4
Priority Amount for such Distribution Date, until the Class
Certificate Principal Amount thereof has been reduced to zero;
(2) to the Class 2-A1, Class 2-A2, Class 2-A3, Class R
and Class 2-A4 Certificates, the Senior Principal Distribution
Amount for Pool 2 for such Distribution Date less the Class 2-
A4 Priority Amount for such date, in the following order of
priority:
first, to the Class 2-A1 Certificates, until the
Class Certificate Principal Amount thereof has been
reduced to zero;
second, to the Class 2-A2 Certificates, until the
Class Certificate Principal Amount thereof has been
reduced to zero;
third, to the Class 2-A3 Certificates, until the
Class Certificate Principal Amount thereof has been
reduced to zero;
fourth, to the Class R Certificates, until the Class
Certificate Principal Amount thereof has been reduced to
zero; and
fifth, to the Class 2-A4 Certificates, until the
Class Certificate Principal Amount thereof has been
reduced to zero; and
(3) to the Class 2-AP Certificates, the Class 2-AP
Principal Distribution Amount for such Distribution Date,
until the Class Certificate Principal Amount thereof has been
reduced to zero.
(iv) from the remaining Available Distribution Amount for Pool 2,
to the Class 2-AP Certificates, the Class 2-AP Deferred Amount for such
Distribution Date, up to an amount not to exceed the Subordinate
Principal Distribution Amount for Group 2 for such Distribution Date,
until the Class Certificate Principal Amount of such Class has been
reduced to zero; provided, that any amounts distributed to the Class 2-
AP Certificates pursuant to this clause (iv) shall not reduce the Class
Certificate Principal Amount thereof;
(v) from the remaining Available Distribution Amount for the
related Mortgage Pool, to the Components of each Certificate Group, as
follows:
(A) to each Component of the Class B1 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the
basis of Accrued Certificate Interest otherwise distributable
thereon) of any Net Prepayment Interest Shortfalls for the related
Mortgage Pool for such Distribution Date;
(B) to each Component of the Class B1 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
(C) to each Component of the Class B1 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for the related Certificate Group for
such Distribution Date, except as provided in Section 5.02(c),
until the Component Principal Balance of each such Component has
been reduced to zero;
(D) to each Component of the Class B2 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the basis
of Accrued Certificate Interest otherwise distributable thereon) of
any Net Prepayment Interest Shortfalls for the related Mortgage
Pool for such Distribution Date;
(E) to each Component of the Class B2 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
(F) to each Component of the Class B2 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for the related Certificate Group for
such Distribution Date, except as provided in Section 5.02(c),
until the Component Principal Balance of each such Component has
been reduced to zero;
(G) to each Component of the Class B3 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the basis
of Accrued Certificate Interest otherwise distributable thereon) of
any Net Prepayment Interest Shortfalls for the related Mortgage
Pool for such Distribution Date;
(H) to each Component of the Class B3 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
(I) to each Component of the Class B3 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for the related Certificate Group for
such Distribution Date, except as provided in Section 5.02(c),
until the Component Principal Balance of each such Component has
been reduced to zero;
(J) to each Component of the Class B4 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the basis
of Accrued Certificate Interest otherwise distributable thereon) of
any Net Prepayment Interest Shortfalls for the related Mortgage
Pool for such Distribution Date;
(K) to each Component of the Class B4 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
(L) to each Component of the Class B4 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for the related Certificate Group for
such Distribution Date, except as provided in Section 5.02(c),
until the Component Principal Balance of each such Component has
been reduced to zero;
(M) to each Component of the Class B5 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the basis
of Accrued Certificate Interest otherwise distributable thereon) of
any Net Prepayment Interest Shortfalls for the related Mortgage
Pool for such Distribution Date;
(N) to each Component of the Class B5 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
(O) to each Component of the Class B5 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for the related Certificate Group for
such Distribution Date, except as provided in Section 5.02(c),
until the Component Principal Balance of each such Component has
been reduced to zero;
(P) to each Component of the Class B6 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, as
reduced by such Component's pro rata share (determined on the basis
of Accrued Certificate Interest otherwise distributable thereon) of
any Net Prepayment Interest Shortfalls for the related Mortgage
Pool for such Distribution Date;
(Q) to each Component of the Class B6 Certificates, any
Interest Shortfall for such Component on such Distribution Date;
and
(R) to each Component of the Class B6 Certificates, in
reduction of the Component Principal Amount thereof, such
Component's Subordinate Class Percentage of the Subordinate
Principal Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Component Principal Balance
of each such Component has been reduced to zero.
(b) If on any Distribution Date the Component Principal Amounts of each
Component in any Certificate Group have each been reduced to zero, the
Available Distribution Amount with respect to the related Mortgage Pool
remaining after distribution of interest to the related Senior Certificates
on such date shall be distributed among the related Classes of Senior
Certificates pro rata, on the basis of their respective Class Certificate
Principal Amounts immediately prior to such Distribution Date, regardless of
the priorities and amounts set forth in Sections 5.02(a)(iii)(A) and (B).
(c) (i) If on any Distribution Date the Credit Support Percentage for
either Component of the Class B1 Certificates is less than the Original
Credit Support Percentage for such Component, then, notwithstanding anything
to the contrary in Section 5.02(a), no distribution of amounts described in
clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Components of the Class
B2, Class B3, Class B4, Class B5 or Class B6 Certificates in the related
Certificate Group on such Distribution Date. (ii) If on any Distribution
Date the Credit Support Percentage for either Component of the Class B2
Certificates is less than the Original Credit Support Percentage for such
Component, then, notwithstanding anything to the contrary in Section 5.02(a),
no distribution of amounts described in clauses (ii) and (iii) of the
definition of Subordinate Principal Distribution Amount will be made in
respect of the Components of the Class B3, Class B4, Class B5 or Class B6
Certificates in the related Certificate Group on such Distribution Date.
(iii) If on any Distribution Date the Credit Support Percentage for either
Component of the Class B3 Certificates is less than the Original Credit
Support Percentage for such Component, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Components of the Class B4, Class B5 or Class
B6 Certificates in the related Certificate Group on such Distribution Date.
(iv) If on any Distribution Date the Credit Support Percentage for either
Component of the Class B4 Certificates is less than the Original Credit
Support Percentage for such Component, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Components of the Class B5 or Class B6
Certificates in the related Certificate Group on such Distribution Date. (v)
If on any Distribution Date the Credit Support Percentage for either
Component of the Class B5 Certificates is less than the Original Credit
Support Percentage for such Component, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Component of the Class B6 Certificates in the
related Certificate Group on such Distribution Date.
Any amount not distributed in respect of any Component on any
Distribution Date pursuant to the immediately preceding paragraph will be
allocated among the remaining Components of the related Certificate Group in
proportion to their respective Component Principal Amounts.
Section 5.03. Allocation of Realized Losses. (a) On any
-----------------------------
Distribution Date, the principal portion of each Realized Loss (or the
applicable Non-AP Percentage thereof, in the case of Pool 2) other than any
Excess Loss in respect of a Mortgage Loan in either Mortgage Pool shall be
allocated in the following order of priority:
first, to the related Component of the Class B6 Certificates,
until the Component Principal Amount thereof has been reduced to
zero;
second, to the related Component of the Class B5 Certificates,
until the Component Principal Amount thereof has been reduced to
zero;
third, to the related Component of the Class B4 Certificates,
until the Component Principal Amount thereof has been reduced to
zero;
fourth, to the related Component of the Class B3 Certificates,
until the Component Principal Amount thereof has been reduced to
zero;
fifth, to the related Component of the Class B2 Certificates,
until the Component Principal Amount thereof has been reduced to
zero;
sixth, to the related Component of the Class B1 Certificates,
until the Component Principal Amount thereof has been reduced to
zero; and
seventh, to the Classes of Senior Certificates of the related
Certificate Group, pro rata, in accordance with their Class
Certificate Principal Amounts; provided, that any such loss
allocated to any Class of Accrual Certificates (and any Accrual
Component) shall be allocated (subject to Section 5.03(c)) on the
basis of the lesser of (x) the Class Certificate Principal Amount
(or Component Principal Amount) thereof immediately prior to the
applicable Distribution Date and (y) the Class Certificate
Principal Amount (or Component Principal Amount) thereof on the
Closing Date (as reduced by any Realized Losses previously
allocated thereto).
(b) With respect to any Distribution Date, the principal portion of any
Excess Loss in respect of a Mortgage Loan in either Mortgage Pool shall be
allocated among the Classes of Certificates and Components of the related
Certificate Group, pro rata, based on the respective Class Certificate
Principal Amounts and Component Principal Amounts thereof; provided, that any
such loss allocated to any Class of Accrual Certificates (and any Accrual
Component) shall be allocated (subject to Section 5.03(c)) on the basis of
the lesser of (x) the Class Certificate Principal Amount (or Component
Principal Amount) thereof immediately prior to the applicable Distribution
Date and (y) the Class Certificate Principal Amount (or Component Principal
Amount) thereof on the Closing Date (as reduced by any Realized Losses
previously allocated thereto).
(c) Any Realized Losses allocated to a Class of Certificates (or a
Component thereof) pursuant to Section 5.03(a) or (b) shall be allocated
among the Certificates of such Class in proportion to their respective
Certificate Principal Amounts. In addition, any Realized Losses allocated to
any Class of Component Certificates on a Distribution Date shall be allocated
in reduction of the Component Principal Amounts of the related Components
(other than any Notional Component) in proportion to their respective
Component Principal Amounts immediately prior to such Distribution Date. Any
allocation of Realized Losses pursuant to this paragraph (c) shall be
accomplished by reducing the Certificate Principal Amount (or, in the case of
any Component, the Component Principal Amount) of the related Certificates
(or Components) on the related Distribution Date in accordance with Section
5.03(d).
(d) Realized Losses allocated in accordance with this Section 5.03
shall be allocated on the Distribution Date in the month following the month
in which such loss was incurred and, in the case of the principal portion
thereof, after giving effect to distributions made on such Distribution Date,
except that the aggregate amount of Realized Losses to be allocated to the
Class 2-AP Certificates on such Distribution Date will be taken into account
in determining distributions in respect of any Class 2-AP Deferred Amount for
such date.
(e) On each Distribution Date, the Subordinate Certificate Writedown
Amount for each Certificate Group for such date shall effect a corresponding
reduction in the Component Principal Amount of the lowest ranking Component
in such Certificate Group, which reduction shall occur on such Distribution
Date after giving effect to distributions made on such Distribution Date.
(f) In the event that there is a recovery of an amount in respect of
principal of a Mortgage Loan, which amount had previously been allocated as a
Realized Loss to one or more Classes of Certificates and, if applicable, to
one or more Components, each outstanding Class or Component to which any
portion of such Realized Loss had previously been allocated shall be entitled
to receive, on the Distribution Date in the month following the month in
which such recovery is received, its pro rata share (based on the Class
Certificate Principal Amount or Component Principal Amount thereof) of such
recovery, up to the amount of the portion of such Realized Loss previously
allocated to such Class or Component. A Class of Certificates as to which
the applicable Component is no longer outstanding shall not be entitled to
any share of such recovery. In the event that the total amount of such
recovery exceeds the amount of such recovery allocated to the outstanding
Classes and Components in accordance with the preceding provisions, each
outstanding Class of Certificates or Component shall be entitled to receive
its pro rata share of the amount of such excess, up to the amount of any
unrecovered Realized Loss previously allocated to such Class or Component.
Any such amounts not otherwise allocated to any Class of Certificates or
Component pursuant to this subsection shall be treated as Principal
Prepayments for purposes of this Agreement.
Section 5.04. Advances by Master Servicer and Trustee. (a) Advances
---------------------------------------
shall be made in respect of each Determination Date as provided herein. If,
on any Determination Date, the Master Servicer determines that any Scheduled
Payments due during the related Due Period (other than Balloon Payments) have
not been received, the Master Servicer shall, or cause the applicable
Servicer to, advance such amount, less an amount, if any, to be set forth in
an Officer's Certificate to be delivered to the Trustee on such Determination
Date, which if advanced the Master Servicer or the applicable Servicer has
determined would not be recoverable from amounts received with respect to
such Mortgage Loan, including late payments, Liquidation Proceeds, Insurance
Proceeds or otherwise. If the Master Servicer determines that an Advance is
required, it shall on the Deposit Date immediately following such
Determination Date either (i) remit to the Trustee from its own funds (or
funds advanced by the applicable Servicer) for deposit in the Certificate
Account an amount equal to such Advance, (ii) cause to be made an appropriate
entry in the records of the Collection Account that funds in such account
being held for future distribution or withdrawal have been, as permitted by
this Section 5.04, used by the Master Servicer to make such Advance, and
remit such funds to the Trustee for deposit in the Certificate Account or
(iii) make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any funds being held in the
Collection Account for future distribution to Certificateholders and so used
shall be replaced by the Master Servicer from its own funds by remittance to
the Trustee for deposit in the Certificate Account on or before any future
Deposit Date to the extent that funds in the Certificate Account on such
Deposit Date shall be less than payments to Certificateholders required to be
made on the related Distribution Date. The Master Servicer and each Servicer
shall be entitled to be reimbursed from the Collection Account for all
Advances made by it as provided in Section 4.02.
(b) In the event that the Master Servicer fails for any reason to make
an Advance required to be made pursuant to Section 5.04 on or before the
Deposit Date, the Trustee shall, on or before the related Distribution Date,
deposit in the Certificate Account an amount equal to the excess of (a)
Advances required to be made by the Master Servicer or any Servicer that
would have been deposited in such Certificate Account over (b) the amount of
any Advance made by the Master Servicer or any Servicer with respect to such
Distribution Date; provided, however, that the Trustee shall be required to
make such Advance only if it is not prohibited by law from doing so and it
has determined that such Advance would be recoverable from amounts to be
received with respect to such Mortgage Loan, including late payments,
Liquidation Proceeds, Insurance Proceeds, or otherwise. The Trustee shall be
entitled to be reimbursed from the Certificate Account for Advances made by
it pursuant to this Section 5.04 as if it were the Master Servicer.
Section 5.05. Distributions of Principal on Redemption Certificates.
-----------------------------------------------------
(a) Except as provided in subclauses (d) and (f) below, on each Distribution
Date on which distributions in reduction of the Class Certificate Principal
Amount of a Class of Redemption Certificates are made, such distributions
will be made in the following order of priority:
(i) any request by the personal representative of a Deceased
Holder or by a surviving tenant by the entirety, by a surviving joint
tenant or by a surviving tenant in common or other Person empowered to
act on behalf of such Deceased Holder upon his or her death, in an
amount up to but not exceeding $100,000 per request; and
(ii) any request by a Living Holder, in an amount up to but not
exceeding $10,000 per request.
Thereafter, distributions will be made as provided in clauses (i) and
(ii) above up to a second $100,000 and $10,000 per request, respectively.
This sequence of priorities will be repeated for each request for principal
distributions made by the Certificate Owners of a Class of Redemption
Certificates until all such requests have been honored.
Requests for distributions in reduction of the Certificate Principal
Amounts of Redemption Certificates presented on behalf of Deceased Holders in
accordance with the provisions of clause (i) above will be accepted in the
order of their receipt by the Clearing Agency. Requests for distributions in
reduction of the Certificate Principal Amounts of Redemption Certificates
presented in accordance with the provisions of clause (ii) above will be
accepted in the order of priority established by the random lot procedures of
the Clearing Agency after all requests with respect to such Class presented
in accordance with clause (i) have been honored. All requests for
distributions in reduction of the Class Certificate Principal Amount of a
Class of Redemption Certificates with respect to any Distribution Date shall
be made in accordance with Section 4.03(c) below and must be received by the
Clearing Agency and forwarded to, and received by, the Trustee no later than
the close of business on the related Record Date. Requests for distributions
that are received by the Clearing Agency and forwarded to the Trustee after
the related Record Date and requests, in either case, for distributions
timely received but not accepted with respect to any Distribution Date, will
be treated as requests for distributions in reduction of the Class
Certificate Principal Amount of the applicable Class of Redemption
Certificates on the next succeeding Distribution Date, and each succeeding
Distribution Date thereafter, until each such request is accepted or is
withdrawn as provided in Section 5.05(c). Such requests as are not so
withdrawn shall retain their order of priority without the need for any
further action on the part of the appropriate Certificate Owner of the
related Redemption Certificate, all in accordance with the procedures of the
Clearing Agency and the Trustee. Upon the transfer of beneficial ownership
of any Redemption Certificate, any distribution request previously submitted
with respect to such Certificate will be deemed to have been withdrawn only
upon the receipt by the Trustee of notification of such withdrawal using a
form required by the Clearing Agency.
Distributions in reduction of the Certificate Principal Amounts of
Redemption Certificates will be applied, in the aggregate, to such
Certificates in an amount equal to the portion of the Available Distribution
Amount distributable to the Redemption Certificates pursuant to Section
5.02(a)(iv), plus any amounts available for distribution from the applicable
Rounding Account pursuant to Section 5.05(e), provided that the aggregate
distribution in reduction of the Class Certificate Principal Amount of any
Class of Redemption Certificates on any Distribution Date is made in an
integral multiple of $1,000.
(b) A "Deceased Holder" is a Certificate Owner of a Redemption
Certificate who was living at the time such interest was acquired and whose
authorized personal representative, surviving tenant by the entirety,
surviving joint tenant or surviving tenant in common or other Person
empowered to act on behalf of such Certificate Owner upon his or her death,
causes to be furnished to the Trustee a certified copy of the death
certificate of such Certificate Owner and any additional evidence of death
required by and satisfactory to the Trustee and any tax waivers requested by
the Trustee. Redemption Certificates beneficially owned by tenants by the
entirety, joint tenants or tenants in common will be considered to be
beneficially owned by a single owner. The death of a tenant by the entirety,
joint tenant or tenant in common will be deemed to be the death of the
Certificate Owner, and any Redemption Certificates so beneficially owned will
be eligible for priority with respect to distributions in reduction of the
Class Certificate Principal Amount of such Class of Redemption Certificates,
subject to the limitations stated above. Redemption Certificates
beneficially owned by a trust will be considered to be beneficially owned by
each beneficiary of the trust to the extent of such beneficiary's beneficial
interest therein, but in no event will a trust's beneficiaries collectively
be deemed to be Certificate Owners of a number of Individual Redemption
Certificates greater than the number of Individual Redemption Certificates of
which such trust is the beneficial owner. The death of a beneficiary of a
trust will be deemed to be the death of a Certificate Owner of the Redemption
Certificates beneficially owned by the trust to the extent of such
beneficiary's beneficial interest in such trust. The death of an individual
who was a tenant by the entirety, joint tenant or tenant in common in a
tenancy that is the beneficiary of a trust will be deemed to be the death of
the beneficiary of the trust. The death of a person who, during his or her
lifetime, was entitled to substantially all of the beneficial ownership
interests in Redemption Certificates will be deemed to be the death of the
Certificate Owner of such Redemption Certificates regardless of the
registration of ownership of such Redemption Certificates, if such beneficial
interest can be established to the satisfaction of the Trustee. Such
beneficial interest will be deemed to exist in typical cases of street name
or nominee ownership, ownership by a trustee, ownership under the Uniform
Gifts to Minors Act and community property or other joint ownership
arrangements between a husband and wife. Beneficial interests shall include
the power to sell, transfer or otherwise dispose of a Redemption Certificate
and the right to receive the proceeds therefrom, as well as interest and
distributions in reduction of the Certificate Principal Amounts of the
Redemption Certificates payable with respect thereto. The Trustee shall not
be under any duty to determine independently the occurrence of the death of
any deceased Certificate Owner. The Trustee may rely entirely upon
documentation delivered to it pursuant to Section 5.05(a) in establishing the
eligibility of any Certificate Owner to receive the priority accorded
Deceased Holders in Section 5.05(a).
(c) Requests for distributions in reduction of the Certificate
Principal Amount of a Redemption Certificate must be made by delivering a
written request therefor to the Clearing Agency Participant or Financial
Intermediary that maintains the account evidencing the Certificate Owner's
interest in such Redemption Certificate. Such Clearing Agency Participant or
Financial Intermediary should in turn make the request of the Clearing Agency
(or, in the case of an Financial Intermediary, such Financial Intermediary
should notify the related Clearing Agency Participant of such request, which
Clearing Agency Participant should make the request of the Clearing Agency)
on a form required by the Clearing Agency and provided to the Clearing Agency
Participant. Upon receipt of such request, the Clearing Agency will date and
time stamp such request and forward such request to the Trustee. The
Clearing Agency may establish such procedures as it deems fair and equitable
to establish the order of receipt of requests for such distributions received
by it on the same day. The Trustee shall not be liable for any delay in
delivery of requests for distributions or withdrawals of such requests by the
Clearing Agency, a Clearing Agency Participant or any Financial Intermediary.
In the event that any requests for distributions in reduction of
the Certificate Principal Amount of Redemption Certificates are rejected by
the Trustee for failure to comply with the requirements of this Section 5.05,
the Trustee shall return such requests to the appropriate Clearing Agency
Participant with a copy to the Clearing Agency with an explanation as to the
reason for such rejection.
The Trustee shall maintain a list of those Clearing Agency
Participants representing the Certificate Owners of Redemption Certificates
that have submitted requests for distributions in reduction of the
Certificate Principal Amount of such Redemption Certificates, together with
the order of receipt and the amounts of such requests. The Trustee shall
notify the Clearing Agency and the appropriate Clearing Agency Participants
as to which requests should be honored on each Distribution Date. Requests
shall be honored by the Clearing Agency in accordance with the procedures,
and subject to the priorities and limitations, described in this Section
5.05. The exact procedures to be followed by the Trustee and the Clearing
Agency for purposes of determining such priorities and limitations shall be
those established from time to time by the Trustee or the Clearing Agency, as
the case may be. The decisions of the Trustee and the Clearing Agency
concerning such matters shall be final and binding on all affected Persons.
Payments in reduction of the Certificate Principal Amounts of
Redemption Certificates shall be made on the applicable Distribution Date and
the Certificate Balances as to which such payments are made shall cease to
bear interest after the last day of the month preceding the month in which
such Distribution Date occurs.
Any Certificate Owner of a Redemption Certificate that has
requested a distribution may withdraw its request by so notifying in writing
the Clearing Agency Participant or Financial Intermediary that maintains such
Certificate Owner's account. In the event that such account is maintained by
a Financial Intermediary, such Financial Intermediary should notify the
related Clearing Agency Participant which in turn should forward the
withdrawal of such request, on a form required by the Clearing Agency, to the
Trustee. If such notice of withdrawal of a request for distribution has not
been received by the Clearing Agency and forwarded to the Trustee on or
before the Record Date for the next Distribution Date, the previously made
request for distribution will be irrevocable with respect to the making of
distributions in reduction of the Certificate Principal Amount of such
Redemption Certificate on such Distribution Date.
(d) To the extent, if any, that amounts available for distribution in
reduction of the Class Certificate Principal Amount of any Class of
Redemption Certificates on a Distribution Date exceed the dollar amount of
requests for distributions with respect to such Class that have been received
by the related Record Date, as provided in Section 5.05(c) above,
distributions in reduction of the Class Certificate Principal Amount of such
Class of Redemption Certificates will be made by mandatory distributions in
reduction thereof. The Trustee shall notify the Clearing Agency of the
aggregate amount of the mandatory distribution in reduction of the Class
Certificate Principal Amount of such Class of Redemption Certificates to be
made on the next Distribution Date. The Clearing Agency shall then allocate
such aggregate amount among its Clearing Agency Participants on a random lot
basis. Each Clearing Agency Participant and, in turn, each Financial
Intermediary, will then select, in accordance with its own procedures,
Individual Redemption Certificates from among those held in its accounts to
receive mandatory distributions in reduction of the Class Certificate
Principal Amount of such Class of Redemption Certificates, such that the
total amount so selected is equal to the aggregate amount of such mandatory
distributions allocated to such Clearing Agency Participant by the Clearing
Agency and to such Financial Intermediary by its related Clearing Agency
Participant, as the case may be. Clearing Agency Participants and Financial
Intermediaries that hold Redemption Certificates selected for mandatory
distributions in reduction of the Class Certificate Principal Amount thereof
should provide notice of such mandatory distributions to the affected
Certificate Owners.
(e) On the Closing Date, a Rounding Account shall be established with
the Trustee for each Class of Redemption Certificates, and ▇▇▇▇▇▇ Brothers
Inc. shall cause to be initially deposited the sum of $999.99 in each
Rounding Account. On each Distribution Date on which a distribution is made
in reduction of the Class Certificate Principal Amount of a Class of
Redemption Certificates, funds on deposit in the applicable Rounding Account
shall be, to the extent needed, withdrawn by the Trustee and applied to round
upward to an integral multiple of $1,000 the aggregate distribution in
reduction of the Class Certificate Principal Amount to be made on such
Redemption Certificates. Rounding of such distribution on such Redemption
Certificates shall be accomplished, on the first such Distribution Date, by
withdrawing from the applicable Rounding Account the amount of funds, if any,
needed to round the amount otherwise available for such distribution in
reduction of the Class Certificate Principal Amount of such Class of
Redemption Certificates upward to the next integral multiple of $1,000. On
each succeeding Distribution Date on which distributions in reduction of the
Class Certificate Principal Amount of such Class of Redemption Certificates
are to be made, the aggregate amount of such distributions allocable to such
Class of Redemption Certificates shall be applied first to repay any funds
withdrawn from the applicable Rounding Account and not previously repaid, and
then the remainder of such allocable amount, if any, shall be similarly
rounded upward and applied as distributions in reduction of the Class
Certificate Principal Amount of such Class of Redemption Certificates; this
process shall continue on succeeding Distribution Dates until the Class
Certificate Principal Amount of such Class of Redemption Certificates has
been reduced to zero. Each Rounding Account shall be an "outside reserve
fund" under the REMIC Provisions that is beneficially owned for all federal
income tax purposes by ▇▇▇▇▇▇ Brothers Inc. ▇▇▇▇▇▇ Brothers Inc. will report
all income, gain, deduction or loss with respect thereto. The Trustee shall
distribute interest earnings, if any, on amounts held in any Rounding Account
as such interest is earned pursuant to written instructions from ▇▇▇▇▇▇
Brothers Inc. to the Trustee.
Notwithstanding anything herein to the contrary, on the Distribution
Date on which distributions in reduction of the Class Certificate Principal
Amount of any Class of Redemption Certificates will reduce the Class
Certificate Principal Amount thereof to zero or in the event that
distributions in reduction of the Class Certificate Principal Amount of such
Class of Redemption Certificates are made in accordance with the provisions
set forth in Section 5.05(f), an amount equal to the difference between
$999.99 and the sum then held in the applicable Rounding Account shall be
paid from the Available Distribution Amount for such Distribution Date to
such Rounding Account. Any funds then on deposit in such Rounding Account
shall be distributed to ▇▇▇▇▇▇ Brothers Inc.
(f) Notwithstanding any provisions herein to the contrary, on each
Distribution Date following the first Distribution Date on or after the
Credit Support Depletion Date, all distributions in reduction of the Class
Certificate Principal Amount of any Class of Redemption Certificates will be
made among the Holders of such Class of Certificates, pro rata, based on
their Certificate Principal Amounts, and will not be made in integral
multiples of $1,000 or pursuant to requested distributions or mandatory
distributions by random lot.
(g) In the event that Definitive Certificates representing any Class of
Redemption Certificates are issued pursuant to Section 3.09(c), all requests
for distributions or withdrawals of such requests relating to such Class must
be submitted to the Trustee, and the Trustee shall perform the functions
described in Section 5.05(a) through (c) using its own procedures, which
procedures shall, to the extent practicable, be consistent with the
procedures described in Section 5.05(a) through (c).
Section 5.06. Compensating Interest Payments. The amount of the
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Aggregate Master Servicing Compensation payable to the Master Servicer in
respect of any Distribution Date shall be reduced by the amount of any
Compensating Interest Payment for such Distribution Date. Such amount shall
not be treated as an Advance and shall not be reimbursable to the Master
Servicer.
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. (a) The Trustee, except during
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the continuance of an Event of Default, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. Any
permissive right of the Trustee provided for in this Agreement shall not be
construed as a duty of the Trustee. If an Event of Default has occurred and
has not otherwise been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and use the same degree
of care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs unless
the Trustee is acting as Master Servicer, in which case it shall use the same
degree of care and skill as the Master Servicer hereunder.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they are in the form required by this Agreement; provided, however,
that the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer, to the Trustee pursuant to
this Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful
misconduct. No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates as provided in
Section 6.19 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not
be deemed to have notice of any Event of Default (other than resulting
from a failure by the Master Servicer (i) to remit funds (or to make
Advances) or (ii) to furnish information to the Trustee when required to
do so) unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office, and
such notice references the Holders of the Certificates and this
Agreement;
(iii) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it; and
(iv) The Trustee shall not be responsible for any act or omission
of the Master Servicer.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which
may be alleged to have been delivered to or served upon it by the parties as
a consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall use its best efforts to remit to the Master
Servicer upon receipt any such complaint, claim, demand, notice or other
document (i) which is delivered to the Corporate Trust Office of the Trustee,
(ii) of which a Responsible Officer has actual knowledge, and (iii) which
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged
Property.
(e) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction (subject to the limitations set forth in
Section 11.15) of Certificateholders of any Class holding Certificates which
evidence, as to such Class, Percentage Interests aggregating not less than
25% as to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.
(f) The Trustee shall pay, out of its own funds, any fees assessed by
the Rating Agencies after the Closing Date in connection with maintaining the
ratings of the Certificates.
Section 6.02. Certain Matters Affecting the Trustee. Except as
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otherwise provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of its
counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by
it hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(iii) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document (provided the same appears
regular on its face), unless requested in writing to do so by Holders of
at least a majority in Class Certificate Principal Amount (or Aggregate
Notional Amount) of each Class of Certificates; provided, however, that,
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability or payment of such estimated expenses as a
condition to proceeding. The reasonable expense thereof shall be paid
by the Holders requesting such investigation; and
(v) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys, which agents or attorneys shall have any or all of the
rights, powers, duties and obligations of the Trustee conferred on them
by such appointment provided that the Trustee shall continue to be
responsible for its duties and obligations hereunder.
Section 6.03. Trustee Not Liable for Certificates. The Trustee
-----------------------------------
makes no representations as to the validity or sufficiency of this Agreement
or of the Certificates (other than the certificate of authentication on the
Certificates) or of any Mortgage Loan, or related document save that the
Trustee represents that, assuming due execution and delivery by the other
parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except that such enforceability may
be subject to (A) applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors generally, and (B)
general principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law. The Trustee shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans to the
Trust Fund by the Depositor or for the use or application of any funds
deposited into the Collection Account, the Certificate Account, any Escrow
Account or any other fund or account maintained with respect to the
Certificates.
Section 6.04. Trustee May Own Certificates. The Trustee and any
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Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may transact banking and
trust with the other parties hereto with the same rights it would have if it
were not Trustee or such agent.
Section 6.05. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be (i) an institution insured by the FDIC and
(ii) a corporation or national banking association, organized and doing
business under the laws of any State or the United States of America,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by federal or state authority. If such
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section,
the combined capital and surplus of such corporation or national banking
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee. (a) The Trustee
----------------------------------
may at any time resign and be discharged from the trust hereby created by
giving written notice thereof to the Depositor and the Master Servicer. Upon
receiving such notice of resignation, the Depositor will promptly appoint a
successor trustee by written instrument, one copy of which instrument shall
be delivered to the resigning Trustee, one copy to the successor trustee and
one copy to the Master Servicer. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)
a tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, or (iv)
the continued use of the Trustee would result in a downgrading of the rating
by the Rating Agencies of any Class of Certificates with a rating, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so
removed, one copy to the successor trustee and one copy to the Master
Servicer.
(c) The Holders of more than 50% of the Class Certificate Principal
Amount (or Aggregate Notional Amount) of each Class of Certificates may at
any time upon 30 days' written notice to the Trustee and to the Depositor
remove the Trustee by such written instrument, signed by such Holders or
their attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor, one copy to the Trustee so removed and one copy
to the Master Servicer; the Depositor shall thereupon use its best efforts to
appoint a mutually acceptable successor trustee in accordance with this
Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.07.
Section 6.07. Successor Trustee. (a) Any successor trustee
-----------------
appointed as provided in Section 6.06 shall execute, acknowledge and deliver
to the Depositor, the Master Servicer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and documents and statements related to each Mortgage Files
held by it hereunder, and shall duly assign, transfer, deliver and pay over
to the successor trustee the entire Trust Fund, together with all necessary
instruments of transfer and assignment or other documents properly executed
necessary to effect such transfer and such of the record or copies thereof
maintained by the predecessor trustee in the administration hereof as may be
requested by the successor trustee and shall thereupon be discharged from all
duties and responsibilities under this Agreement. In addition, the Master
Servicer and the predecessor trustee shall execute and deliver such other
instruments and do such other things as may reasonably be required to more
fully and certainly vest and confirm in the successor trustee all such
rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall
be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Master Servicer shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to the Rating Agencies. The expenses
of such mailing shall be borne by the Master Servicer.
Section 6.08. Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Persons succeeding to the business of the
Trustee, shall be the successor to the Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided
that such Person shall be eligible under the provisions of Section 6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or
----------------------------------------------
Custodian. (a) Notwithstanding any other provisions hereof, at any time,
---------
the Trustee, the Depositor or the Certificateholders evidencing more than 50%
of the Class Certificate Principal Amount (or Aggregate Notional Amount) of
each Class of Certificates shall each have the power from time to time to
appoint one or more Persons to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or advisable
(or the Trustee has been advised by the Master Servicer that such separate
trustee or co-trustee is necessary or advisable) under the laws of any state
in which a property securing a Mortgage Loan is located or for the purpose of
otherwise conforming to any legal requirement, restriction or condition in
any state in which a property securing a Mortgage Loan is located or in any
state in which any portion of the Trust Fund is located. The separate
Trustees, co-trustees, or custodians so appointed shall be trustees or
custodians for the benefit of all the Certificateholders and shall have such
powers, rights and remedies as shall be specified in the instrument of
appointment; provided, however, that no such appointment shall, or shall be
deemed to, constitute the appointee an agent of the Trustee. The obligation
of the Trustee to make Advances pursuant to Section 5.04 and 6.14 hereof
shall not be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall
be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee,
co-trustee, or custodian jointly, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations, including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction, shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable
by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee or the Certificateholders evidencing more than 50%
of the Aggregate Voting Interests of the Certificates may at any time
accept the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal
does not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject
to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.05 hereunder and no notice to Certificateholders of the appointment
shall be required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 6.12 hereof (which compensation shall not reduce any compensation
payable to the Trustee under such Section).
Section 6.10. Authenticating Agents. (a) The Trustee may appoint
---------------------
one or more Authenticating Agents which shall be authorized to act on behalf
of the Trustee in authenticating Certificates. Wherever reference is made in
this Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be a corporation
organized and doing business under the laws of the United States of America
or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.10, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.10.
No Authenticating Agent shall have responsibility or liability for any action
taken by it as such at the direction of the Trustee. Any Authenticating
Agent shall be entitled to reasonable compensation for its services and, if
paid by the Trustee, it shall be a reimbursable expense pursuant to Section
6.12.
Section 6.11. Indemnification of Trustee. The Trustee and its
--------------------------
directors, officers, employees and agents shall be entitled to
indemnification from the Trust Fund for any loss, liability or expense
incurred in connection with any legal proceeding and incurred without
negligence or willful misconduct on their part, arising out of, or in
connection with, the acceptance or administration of the trusts created
hereunder, including the costs and expenses of defending themselves against
any claim in connection with the exercise or performance of any of their
powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given
the Depositor, the Master Servicer and the Holders written notice
thereof promptly after the Trustee shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Depositor in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Depositor,
which consent shall not be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense
under any environmental law.
Section 6.12. Fees and Expenses of Trustee. The Trustee shall be
----------------------------
entitled to receive, and is authorized to pay to itself the amount of income
or gain earned from the investment of funds in the Certificate Account.
Section 6.13. Collection of Monies. Except as otherwise expressly
--------------------
provided in this Agreement, the Trustee may demand payment or delivery of,
and shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold
all such money and property received by it as part of the Trust Fund and
shall distribute it as provided in this Agreement. If the Trustee shall not
have timely received amounts to be remitted with respect to the Mortgage
Loans from the Master Servicer, the Trustee shall request the Master Servicer
to make such distribution as promptly as practicable or legally permitted.
If the Trustee shall subsequently receive any such amount, it may withdraw
such request.
Section 6.14. Trustee To Act; Appointment of Successor. (a) The
----------------------------------------
occurrence of any one or more of the following events shall constitute an
"Event of Default"):
(i) Any failure by the Master Servicer to furnish the Trustee the
Mortgage Loan data sufficient to prepare the reports described in
Section 4.03(a) which continues unremedied for a period of one Business
Day after the date upon which written notice of such failure shall have
been given to such Master Servicer by the Trustee or to such Master
Servicer and the Trustee by the Holders of not less than 25% of the
Class Certificate Principal Amount (or Aggregate Notional Amount) of
each Class of Certificates; or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of such Master Servicer contained in this
Agreement which continues unremedied for a period of 30 days (or 15
days, in the case of a failure to maintain any Insurance Policy required
to be maintained pursuant to this Agreement) after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to such Master Servicer by the Trustee, or to such
Master Servicer and the Trustee by the Holders of not less than 25% of
the Class Certificate Principal Amount (or Aggregate Notional Amount) of
each Class of Certificates; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days or
any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Certificates because of the financial
condition or loan servicing capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to such Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of
all or substantially all of its assets, or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the criteria
for a successor servicer as specified in Section 9.27 hereof; or
(vii) If a representation or warranty set forth in Section 9.14
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of
which such representation or warranty was incorrect shall not have been
eliminated or cured within 60 days after the date on which written
notice of such incorrect representation or warranty shall have been
given to the Master Servicer by the Trustee, or to the Master Servicer
and the Trustee by the Holders of not less than 25% of the Aggregate
Certificate Principal Amount of each Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Class Certificate
Principal Amount (or Aggregate Notional Amount) of each Class of
Certificates; or
(ix) Any Servicer at any time is not either an FNMA- or FHLMC-
approved Seller/Servicer, and the Master Servicer has not terminated the
rights and obligations of such Servicer under the applicable Servicing
Agreement and replaced such Servicer with an FNMA- or FHLMC-approved
servicer within 30 days of the absence of such approval; or
(x) Any failure of the Master Servicer to remit to the Trustee any
payment required to be made to the Trustee for the benefit of
Certificateholders under the terms of this Agreement, including any
Advance, on any Deposit Date.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Certificate
Principal Amount (or Aggregate Notional Amount) of each Class of
Certificates, terminate all of the rights and obligations of the Master
Servicer hereunder and in and to the Mortgage Loans and the proceeds thereof.
If an Event of Default described in clause (x) of this Section 6.14 shall
occur, then, in each and every case, subject to applicable law, the Trustee,
by notice in writing to the Master Servicer, shall promptly terminate all of
the rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer, and only in its capacity as Master Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under the terms of this Agreement; and
the Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the defaulting Master Servicer as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents or otherwise. The
defaulting Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the defaulting Master Servicer's responsibilities and
rights hereunder as Master Servicer including, without limitation, notifying
Mortgagors of the assignment of the master servicing function and providing
the Trustee or its designee all documents and records in electronic or other
form reasonably requested by it to enable the Trustee or its designee to
assume the defaulting Master Servicer's functions hereunder and the transfer
to the Trustee for administration by it of all amounts which shall at the
time be or should have been deposited by the defaulting Master Servicer in
the Collection Account maintained by such defaulting Master Servicer and any
other account or fund maintained with respect to the Certificates or
thereafter received with respect to the Mortgage Loans. The Master Servicer
being terminated shall bear all costs of a master servicing transfer,
including but not limited to those of the Trustee reasonably allocable to
specific employees and overhead, legal fees and expenses, accounting and
financial consulting fees and expenses, and costs of amending the Agreement,
if necessary.
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to
reimbursement to the extent provided in Section 4.02(i), (ii), (iii), (iv),
(v), (vi), (vii), (ix) and (xi) to the extent such reimbursement relates to
the period prior to such Master Servicer's termination.
If any Event of Default shall occur, the Trustee shall promptly notify
the Rating Agencies of the nature and extent of such Event of Default. The
Trustee shall immediately give written notice to the Master Servicer upon
such Master Servicer's failure to remit funds on the Deposit Date.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee
receives the resignation of the Master Servicer evidenced by an Opinion of
Counsel pursuant to Section 9.29, the Trustee, unless another master servicer
shall have been appointed, shall be the successor in all respects to the
Master Servicer in its capacity as such under this Agreement and the
transactions set forth or provided for herein and shall have all the rights
and powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer
hereunder, including the obligation to make Advances; provided, however, that
any failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall
not be considered a default by the Trustee hereunder. In addition, the
Trustee shall have no responsibility for any act or omission of the Master
Servicer prior to the issuance of any notice of termination and shall have no
liability relating to the representations and warranties of the Master
Servicer set forth in Section 9.14. In the Trustee's capacity as such
successor, the Trustee shall have the same limitations on liability herein
granted to the Master Servicer. As compensation therefor, the Trustee shall
be entitled to receive all compensation payable to the Master Servicer under
this Agreement, including the Master Servicing Fee.
(c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less
than $15,000,000 and meeting such other standards for a successor master
servicer as are set forth in this Agreement, as the successor to such Master
Servicer in the assumption of all of the responsibilities, duties or
liabilities of a master servicer, like the Master Servicer. Any entity
designated by the Trustee as a successor master servicer may be an Affiliate
of the Trustee; provided, however, that, unless such Affiliate meets the net
worth requirements and other standards set forth herein for a successor
master servicer, the Trustee, in its individual capacity shall agree, at the
time of such designation, to be and remain liable to the Trust Fund for such
Affiliate's actions and omissions in performing its duties hereunder. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of that permitted to the Master
Servicer hereunder. The Trustee and such successor shall take such actions,
consistent with this Agreement, as shall be necessary to effectuate any such
succession and may make other arrangements with respect to the servicing to
be conducted hereunder which are not inconsistent herewith. The Master
Servicer shall cooperate with the Trustee and any successor master servicer
in effecting the termination of the Master Servicer's responsibilities and
rights hereunder including, without limitation, notifying Mortgagors of the
assignment of the master servicing functions and providing the Trustee and
successor master servicer, as applicable, all documents and records in
electronic or other form reasonably requested by it to enable it to assume
the Master Servicer's functions hereunder and the transfer to the Trustee or
such successor master servicer, as applicable, all amounts which shall at the
time be or should have been deposited by the Master Servicer in the
Collection Account and any other account or fund maintained with respect to
the Certificates or thereafter be received with respect to the Mortgage
Loans. Neither the Trustee nor any other successor master servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in
delivering, cash, documents or records to it, (ii) the failure of the Master
Servicer to cooperate as required by this Agreement, (iii) the failure of the
Master Servicer to deliver the Mortgage Loan data to the Trustee as required
by this Agreement or (iv) restrictions imposed by any regulatory authority
having jurisdiction over the Master Servicer.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
----------------------------------------------------
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to
protect the interests, and enforce the rights and remedies, of the
Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filings of proofs of
claim and debt in connection therewith). Except as otherwise expressly
provided in this Agreement, no remedy provided for by this Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative
and in addition to any other remedy, and no delay or omission to exercise any
right or remedy shall impair any such right or remedy or shall be deemed to
be a waiver of any Event of Default.
Section 6.16. Waiver of Defaults. 35% or more of the Aggregate
------------------
Voting Interests of Certificateholders may waive any default or Event of
Default by the Master Servicer in the performance of its obligations
hereunder, except that a default in the making of any required deposit to the
Certificate Account that would result in a failure of the Trustee to make any
required payment of principal of or interest on the Certificates may only be
waived with the consent of 100% of the affected Certificateholders. Upon any
such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived.
Section 6.17. Notification to Holders. Upon termination of the
-----------------------
Master Servicer or appointment of a successor to the Master Servicer, in each
case as provided herein, the Trustee shall promptly mail notice thereof by
first class mail to the Certificateholders at their respective addresses
appearing on the Certificate Register. The Trustee shall also, within 45
days after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to Certificateholders, unless such Event of Default
shall have been cured or waived prior to the issuance of such notice and
within such 45-day period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
------------------------------------------------------
During Event of Default. Subject to the provisions of Sections 8.01 and
-----------------------
11.15 hereof, during the continuance of any Event of Default, Holders of
Certificates evidencing not less than 25% of the Class Certificate Principal
Amount (or Aggregate Notional Amount) of each Class of Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement; provided, however, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the
trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto and (ii) the terminating of the
Master Servicer or any successor master servicer from its rights and duties
as master servicer hereunder) at the request, order or direction of any of
the Certificateholders, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
-------
that, subject to the provisions of Section 8.01, the Trustee
shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel,
determines that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
Section 6.19. Action Upon Certain Failures of the Master Servicer
---------------------------------------------------
and Upon Event of Default. In the event that the Trustee shall have
-------------------------
actual knowledge of any action or inaction of the Master Servicer that would
become an Event of Default upon the Master Servicer's failure to remedy the
same after notice, the Trustee shall give notice thereof to the Master
Servicer.
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
Section 7.01. Termination of Trust Fund Upon Repurchase or
--------------------------------------------
Liquidation of All Mortgage Loans. (a) The respective obligations and
---------------------------------
responsibilities of the Trustee and the Master Servicer created hereby (other
than the obligation of the Trustee to make payments to Certificateholders as
set forth in Section 7.02, the obligation of the Master Servicer to make a
final remittance to the Trustee for deposit into the Certificate Account
pursuant to Section 4.01 and the obligations of the Master Servicer to the
Trustee pursuant to Sections 9.10 and 9.14), shall terminate on the earlier
of (i) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii)
the sale of the property held by the Trust Fund in accordance with Section
7.01(b) or (c); provided, however, that in no event shall the Trust Fund
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
the late Ambassador of the United States to the Court of St. James's, living
on the date hereof, and (ii) the Latest Possible Maturity Date. Any
termination of the Trust Fund shall be carried out in such a manner so that
the termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.
(b) On any Distribution Date occurring after the date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans is less than 5%
of the Cut-off Date Aggregate Principal Balance, the Depositor may cause the
Trust Fund to adopt a plan of complete liquidation pursuant to Section
7.03(a)(i) hereof to sell all of its property. The property of the Trust
Fund shall be sold at a price (the "Termination Price") equal to: (i) 100% of
the unpaid principal balance of each Mortgage Loan on the day of such
purchase plus interest accrued thereon at the applicable Mortgage Rate with
respect to any Mortgage Loan to the Due Date in the Due Period immediately
preceding the related Distribution Date to the date of such repurchase and
(ii) the fair market value of any REO Property and any other property held by
any REMIC, such fair market value to be determined by an appraiser or
appraisers mutually agreed upon by the Master Servicer and the Trustee.
Section 7.02. Procedure Upon Termination of Trust Fund. (a) Notice
----------------------------------------
of any termination pursuant to the provisions of Section 7.01, specifying the
Distribution Date upon which the final distribution shall be made, shall be
given promptly by the Trustee by first class mail to Certificateholders
mailed (x) no later than five Business Days after the Trustee has received
notice from the Depositor of its intent to exercise its right to cause the
termination of the Trust Fund pursuant to Section 7.01(b) or (y) upon the
final payment or other liquidation of the last Mortgage Loan or REO Property
in the Trust Fund. Such notice shall specify (A) the Distribution Date upon
which final distribution on the Certificates of all amounts required to be
distributed to it pursuant to Section 5.02 will be made upon presentation and
surrender of the Certificates at the Corporate Trust Office, and (B) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distribution being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Master Servicer and the Certificate
Registrar at the time such notice is given to Holders of the Certificates.
Upon any such termination, the duties of the Certificate Registrar with
respect to the Certificates shall terminate and the Trustee shall terminate,
or request the Master Servicer to terminate, the Collection Account it
maintains, the Certificate Account and any other account or fund maintained
with respect to the Certificates, subject to the Trustee's obligation
hereunder to hold all amounts payable to Certificateholders in trust without
interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to
contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice
any Certificates shall not have been surrendered for cancellation, the
Trustee shall, subject to applicable state law relating to escheatment, hold
all amounts distributable to such Holders for the benefit of such Holders.
No interest shall accrue on any amount held by the Trustee and not
distributed to a Certificateholder due to such Mortgage Certificateholder's
failure to surrender its Certificate(s) for payment of the final distribution
thereon in accordance with this Section.
Section 7.03. Additional Trust Fund Termination Requirements. (a)
----------------------------------------------
The Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee seeks (at the request of the
Master Servicer), and subsequently receives, an Opinion of Counsel (at the
expense of the Master Servicer), addressed to the Trustee to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
7.03 will not (i) result in the imposition of taxes on any REMIC under the
REMIC Provisions or (ii) cause any REMIC established hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 89 days prior to the time of the making of the
final payment on the Certificates, the Trustee (upon (x) the sale of the
property of the Trust Fund by the Trustee pursuant to Section 7.01(c) or
(y) notification by the Depositor that it intends to exercise its option
to cause the termination of the Trust Fund) shall adopt a plan of
complete liquidation of the Trust Fund on behalf of each REMIC, meeting
the requirements of a qualified liquidation under the REMIC Provisions;
(ii) The sale of the assets of the Trust Fund pursuant to
Section 7.02 shall be a sale for cash and shall occur at or after the
time of adoption of such a plan of complete liquidation and prior to the
time of making of the final payment on the Certificates;
(iii) On the date specified for final payment of the
Certificates, the Trustee shall make final distributions of principal
and interest on the Certificates in accordance with Section 5.02 and,
after payment of, or provision for any outstanding expenses, distribute
or credit, or cause to be distributed or credited, to the Holders of the
Residual Certificates all cash on hand after such final payment (other
than cash retained to meet claims), and the Trust Fund (and each REMIC)
shall terminate at that time; and
(iv) In no event may the final payment on the Certificates or
the final distribution or credit to the Holders of the Residual
Certificates be made after the 89th day from the date on which the plan
of complete liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder
thereof hereby (i) authorizes the Trustee to take such action as may be
necessary to adopt a plan of complete liquidation of the related REMIC and
(ii) agrees to take such other action as may be necessary to adopt a plan of
complete liquidation of the related REMIC, which authorization shall be
binding upon all successor Residual Certificateholders.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders. (a) The death or
-------------------------------
incapacity of any Certificateholder shall not operate to terminate this
Agreement or this Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of this Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder,
shall have any right to vote or in any manner otherwise control the Master
Servicer or the operation and management of the Trust Fund, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute
the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an
Event of Default and of the continuance thereof, as hereinbefore provided,
and unless also the Holders of Certificates evidencing not less than 25% of
the Class Certificate Principal Amount (or Aggregate Notional Amount) of
Certificates of each 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 cost, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for sixty days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders; it being understood and intended, and
being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing of any provision of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Agreement, except in the manner herein provided
and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 8.02. Access to List of Holders. (a) If the Trustee is not
-------------------------
acting as Certificate Registrar, the Certificate Registrar will furnish or
cause to be furnished to the Trustee, within fifteen days after receipt by
the Certificate Registrar of a request by the Trustee in writing, a list, in
such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders of each Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Trustee, and such
application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicants reasonable
access during the normal business hours of the Trustee to the most recent
list of Certificateholders held by the Trustee or shall, as an alternative,
send, at the Applicants' expense, the written communication proffered by the
Applicants to all Certificateholders at their addresses as they appear in the
Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor,
the Master Servicer, the Certificate Registrar and the Trustee that neither
the Depositor, the Master Servicer, the Certificate Registrar nor the Trustee
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 8.03. Acts of Holders of Certificates. (a) Any request,
-------------------------------
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by Holders or Certificate
Owner, if the Holder is a Clearing Agency, may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where
expressly required herein, to the Master Servicer. Such instrument or
instruments (as the action embodies therein and evidenced thereby) are herein
sometimes referred to as an "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and Master Servicer, if made
in the manner provided in this Section. Each of the Trustee and Master
Servicer shall promptly notify the other of receipt of any such instrument by
it, and shall promptly forward a copy of such instrument to the other.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Master Servicer, nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done
by the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer. The
-----------------------------
Certificateholders, by their purchase and acceptance of the Certificates,
appoint Norwest Bank Minnesota, National Association, as Master Servicer.
For and on behalf of the Depositor, the Trustee and the Certificateholders,
the Master Servicer shall master service the Mortgage Loans in accordance
with the provisions of this Agreement and the provisions of the applicable
Servicing Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer
-------------------------------------------------
Errors and Omissions Insurance Policy. (a) The Master Servicer, at its
-------------------------------------
expense, shall maintain in effect a Master Servicer Fidelity Bond and a
Master Servicer Errors and Omissions Insurance Policy, affording coverage
with respect to all directors, officers, employees and other Persons acting
on such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The Master
Servicer Errors and Omissions Insurance Policy and the Master Servicer
Fidelity Bond shall be in such form and amount that would meet the
requirements of FNMA or FHLMC if it were the purchaser of the Mortgage Loans.
The Master Servicer shall (i) require each Servicer to maintain an Errors and
Omissions Insurance Policy and a Servicer Fidelity Bond in accordance with
the provisions of the applicable Servicing Agreement, (ii) cause each
Servicer to provide to the Master Servicer certificates evidencing that such
policy and bond is in effect and to furnish to the Master Servicer any notice
of cancellation, non-renewal or modification of the policy or bond received
by it, as and to the extent provided in the applicable Servicing Agreement,
and (iii) furnish copies of the certificates and notices referred to in
clause (ii) to the Trustee upon its request.
(b) The Master Servicer shall promptly report to the Trustee any
material changes that may occur in the Master Servicer Fidelity Bond or the
Master Servicer Errors and Omissions Insurance Policy and shall furnish to
the Trustee, on request, certificates evidencing that such bond and insurance
policy are in full force and effect. The Master Servicer shall promptly
report to the Trustee all cases of embezzlement or fraud, if such events
involve funds relating to the Mortgage Loans. The total losses, regardless
of whether claims are filed with the applicable insurer or surety, shall be
disclosed in such reports together with the amount of such losses covered by
insurance. If a bond or insurance claim report is filed with any of such
bonding companies or insurers, the Master Servicer shall promptly furnish a
copy of such report to the Trustee. Any amounts relating to the Mortgage
Loans collected by the Master Servicer under any such bond or policy shall be
promptly remitted by the Master Servicer to the Trustee for deposit into the
Certificate Account. Any amounts relating to the Mortgage Loans collected by
any Servicer under any such bond or policy shall be remitted to the Master
Servicer to the extent provided in the applicable Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
--------------------------------------------------
Information. For each year this Agreement is in effect, the Master
-----------
Servicer shall submit to the Trustee, each Rating Agency and the Depositor a
copy of its annual unaudited financial statements on or prior to May 31 of
each year. Such financial statements shall include a balance sheet, income
statement, statement of retained earnings, statement of additional paid-in
capital, statement of changes in financial position and all related notes and
schedules and shall be in comparative form, certified by a nationally
recognized firm of Independent Accountants to the effect that such statements
were examined and prepared in accordance with generally accepted accounting
principles applied on a basis consistent with that of the preceding year.
Section 9.04. Power to Act; Procedures. (a) The Master Servicer
------------------------
shall master service the Mortgage Loans and shall have full power and
authority, subject to the REMIC Provisions and the provisions of Article X
hereof, and each Servicer shall have full power and authority (to the extent
delegated to such Servicer by the Master Servicer under the applicable
Servicing Agreement) to do any and all things that it may deem necessary or
desirable in connection with the servicing and administration of the Mortgage
Loans, including but not limited to the power and authority (i) to execute
and deliver, on behalf of the Certificateholders and the Trustee, customary
consents or waivers and other instruments and documents, (ii) to consent to
transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages, (iii) to collect any Insurance Proceeds and Liquidation
Proceeds, and (iv) to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan, in each case,
in accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable; provided that the Master Servicer shall not take,
or knowingly permit any Servicer to take, any action that is inconsistent
with or prejudices the interests of the Trust Fund or the Certificateholders
in any Mortgage Loan or the rights and interests of the Depositor, the
Trustee and the Certificateholders under this Agreement. The Master Servicer
shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan
and shall not make or permit any Servicer to make any modification, waiver or
amendment of any term of any Mortgage Loan that would cause the Trust Fund to
fail to qualify as a REMIC or result in the imposition of any tax under
Section 860F(a) or Section 860G(d) of the Code. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the
name of a Servicer, and each Servicer, to the extent such authority is
delegated to such Servicer by the Master Servicer under the applicable
Servicing Agreement, is hereby authorized and empowered by the Trustee when
the Master Servicer or a Servicer, as the case may be, believes it
appropriate in its best judgment and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, to execute and deliver, on
behalf of itself and the Certificateholders, the Trustee or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. The Trustee
shall furnish the Master Servicer, upon request, with any powers of attorney
empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property,
and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with the applicable
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, necessary
or appropriate to enable the Master Servicer to master service and administer
the Mortgage Loans and carry out its duties hereunder, in each case in
accordance with Accepted Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that
it is likely that the laws of the state in which action is to be taken
prohibit such action if taken in the name of the Trustee or that the Trustee
would be adversely affected under the "doing business" or tax laws of such
state if such action is taken in its name, then upon request of the Trustee,
the Master Servicer shall join with the Trustee in the appointment of a
co-trustee pursuant to Section 6.09 hereof. In the performance of its duties
hereunder, the Master Servicer shall be an independent contractor and shall
not, except in those instances where it is taking action in the name of the
Trustee, be deemed to be the agent of the Trustee.
(b) In master servicing and administering the Mortgage Loans, the
Master Servicer shall employ procedures, and shall cause each Servicer to
employ procedures (including, but not limited to, collection procedures),
consistent with the applicable Servicing Agreement. Consistent with the
foregoing, the Master Servicer may, and may permit any Servicer to, in its
discretion (i) waive any late payment charge or any prepayment charge or
penalty interest in connection with the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due on a Mortgage Note for a period
not greater than 120 days; provided, however, that the maturity of any
Mortgage Loan shall not be extended past the date on which the final payment
is due on the latest maturing Mortgage Loan as of the Cut-off Date. In the
event of any extension described in clause (ii) above, the Master Servicer
shall make or cause to be made Advances on the related Mortgage Loan in
accordance with the provisions of Section 5.04 on the basis of the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such extension. Notwithstanding anything to the contrary in this
Agreement, the Master Servicer shall not, unless default by the related
Mortgagor is, in the reasonable judgment of the Master Servicer, imminent,
permit any modification, waiver or amendment of any material term of any
Mortgage Loan (including but not limited to the interest rate, the principal
balance, the amortization schedule, or any other term affecting the amount or
timing of payments on the Mortgage Loan or the collateral therefor) unless
the Master Servicer shall have provided or caused to be provided to the
Trustee an Opinion of Counsel in writing to the effect that such
modification, waiver or amendment would not be treated as giving rise to a
new debt instrument for federal income tax purposes and would not adversely
affect the status of the REMIC.
9.05. Servicing Agreements Between the Master Servicer and
----------------------------------------------------
Servicers; Enforcement of Servicers' Obligations. (a) Each Servicing
------------------------------------------------
Agreement requires the applicable Servicer to service the Mortgage Loans in
accordance with the provisions thereof. References in this Agreement to
actions taken or to be taken by the Master Servicer include actions taken or
to be taken by a Servicer on behalf of the Master Servicer. Any fees paid to
such Servicers shall be paid by the Master Servicer (or deducted from amounts
remitted to the Master Servicer by the applicable Servicer) and shall not be
an obligation of the Trust.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
terminate the rights and obligations of such Servicer thereunder and either
act as servicer of the related Mortgage Loans or enter into a Servicing
Agreement with a successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the
owner of the related Mortgage Loans. The Master Servicer shall pay the costs
of such enforcement at its own expense, and shall be reimbursed therefor only
(i) from a general recovery resulting from such enforcement only to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Section 9.06. Collection of Taxes, Assessments and Similar Items.
--------------------------------------------------
(a) To the extent provided in the applicable Servicing Agreement, the Master
Servicer shall cause each Servicer to establish and maintain one or more
custodial accounts at a depository institution (which may be a depository
institution with which the Master Servicer or any Servicer establishes
accounts in the ordinary course of its servicing activities), the accounts of
which are insured to the maximum extent permitted by the FDIC (each, an
"Escrow Account") and shall deposit therein any collections of amounts
received with respect to amounts due for taxes, assessments, water rates,
Standard Hazard Insurance Policy premiums or any comparable items for the
account of the Mortgagors. Withdrawals from any Escrow Account may be made
(to the extent amounts have been escrowed for such purpose) only in
accordance with the applicable Servicing Agreement. Each Servicer shall be
entitled to all investment income not required to be paid to Mortgagors on
any Escrow Account maintained by such Servicer. The Master Servicer shall
make (or cause to be made) to the extent provided in the applicable Servicing
Agreement advances to the extent necessary in order to effect timely payment
of taxes, water rates, assessments, Standard Hazard Insurance Policy premiums
or comparable items in connection with the related Mortgage Loan (to the
extent that the Mortgagor is required, but fails, to pay such items),
provided that it has determined that the funds so advanced are recoverable
from escrow payments, reimbursement pursuant to Section 4.02(v) or otherwise.
(b) Costs incurred by the Master Servicer or by Servicers in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans may be added to the amount owing under the related Mortgage
Note where the terms of the Mortgage Note so permit; provided, however, that
the addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders. Such costs,
to the extent that they are unanticipated, extraordinary costs, and not
ordinary or routine costs shall be recoverable by the Master Servicer
pursuant to Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor
----------------------------------------------
Servicers. (a) The Master Servicer shall be entitled to terminate any
---------
Servicing Agreement related to Mortgage Loans in accordance with the terms
and conditions of such Servicing Agreement and without any limitation by
virtue of this Agreement; provided, however, that in the event of termination
of any Servicing Agreement by the Master Servicer or the related Servicer,
the Master Servicer shall either act as servicer of the related Mortgage
Loans or enter into a Servicing Agreement with a successor Servicer.
(b) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any,
that it replaces. If the Trustee or the Master Servicer enters into a
Servicing Agreement with a successor Servicer, the Trustee or the Master
Servicer, as applicable, shall use reasonable efforts to have the successor
Servicer assume liability for the representations and warranties made by the
terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business
judgment, release the terminated Servicer from liability for such
representations and warranties.
Section 9.08. Master Servicer Liable for Servicing. Notwithstanding
------------------------------------
any Servicing Agreement, the Master Servicer shall remain obligated and
liable to the Trustee and the Certificateholders in accordance with the
provisions of this Agreement, to the extent of its obligations hereunder,
without diminution of such obligation or liability by virtue of such
Servicing Agreements or arrangements. The Master Servicer shall ensure that
the Mortgage Loans are serviced in accordance with the provisions of this
Agreement and shall enforce the provisions of each Servicing Agreement for
the benefit of the Certificateholders. The Master Servicer shall be entitled
to enter into any agreement with its Servicers for indemnification of the
Master Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.
Section 9.09. No Contractual Relationship Between Servicers and
-------------------------------------------------
Trustee or Depositor. Any Servicing Agreement that may be entered into
--------------------
and any other transactions or services relating to the Mortgage Loans
involving a Servicer in its capacity as such and not as an originator shall
be deemed to be between such Servicer, ▇▇▇▇▇▇ Capital and the Master
Servicer, and the Trustee and the Depositor shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to such Servicer except as set forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Trustee. (a) In
--------------------------------------------
the event the Master Servicer shall for any reason no longer be the Master
Servicer (including by reason of any Event of Default under this Agreement),
the Trustee shall thereupon assume all of the rights and obligations of such
Master Servicer hereunder and under each Servicing Agreement entered into
with respect to the Mortgage Loans. The Trustee, its designee or any
successor master servicer appointed by the Trustee shall be deemed to have
assumed all of the Master Servicer's interest herein and therein to the same
extent as if such Servicing Agreement had been assigned to the assuming
party, except that the Master Servicer shall not thereby be relieved of any
liability or obligations of the Master Servicer under such Servicing
Agreement accruing prior to its replacement as Master Servicer, and shall be
liable to the Trustee, and hereby agrees to indemnify and hold harmless the
Trustee from and against all costs, damages, expenses and liabilities
(including reasonable attorneys' fees) incurred by the Trustee as a result of
such liability or obligations of the Master Servicer and in connection with
the Trustee's assumption (but not its performance, except to the extent that
costs or liability of the Trustee are created or increased as a result of
negligent or wrongful acts or omissions of the Master Servicer prior to its
replacement as Master Servicer) of the Master Servicer's obligations, duties
or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to each Servicing Agreement
and the related Mortgage Loans and an accounting of amounts collected and
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of each Servicing Agreement to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements. To the
--------------------------------------------
extent provided in the applicable Servicing Agreement, to the extent Mortgage
Loans contain enforceable due-on-sale clauses, the Master Servicer shall
cause the Servicers to enforce such clauses in accordance with the applicable
Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance
with the applicable Servicing Agreement, and, as a consequence, a Mortgage
Loan is assumed, the original Mortgagor may be released from liability in
accordance with the applicable Servicing Agreement.
Section 9.12. Release of Mortgage Files. (a) Upon becoming aware
-------------------------
of the payment in full of any Mortgage Loan, or the receipt by the Master
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes for payment to Certificateholders on the next
Distribution Date, the Master Servicer will, or will cause the applicable
Servicer to, promptly notify the Trustee (or the applicable Custodian) by a
certification (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required
to be deposited in the Collection Account maintained by the Master Servicer
pursuant to Section 4.01 have been or will be so deposited) of a Servicing
Officer and shall request the Trustee or the applicable Custodian, to deliver
to the applicable Servicer the related Mortgage File. Upon receipt of such
certification and request, the Trustee or the applicable Custodian (with the
consent, and at the direction of the Trustee), shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee shall have
no further responsibility with regard to such Mortgage File. Upon any such
payment in full, the Master Servicer is authorized, and each Servicer, to the
extent such authority is delegated to such Servicer by the Master Servicer
under the applicable Servicing Agreement, is authorized, to give, as agent
for the Trustee, as the mortgagee under the Mortgage that secured the
Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor
of such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case
may be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, the Trustee shall execute
such documents as shall be prepared and furnished to the Trustee by the
Master Servicer, or by a Servicer (in form reasonably acceptable to the
Trustee) and as are necessary to the prosecution of any such proceedings.
The Trustee or the applicable Custodian, shall, upon request of the Master
Servicer, or of a Servicer, and delivery to the Trustee or the applicable
Custodian, of a trust receipt signed by a Servicing Officer substantially in
the form of Exhibit C, release the related Mortgage File held in its
possession or control to the Master Servicer (or the applicable Servicer).
Such trust receipt shall obligate the Master Servicer or applicable Servicer
to return the Mortgage File to the Trustee or Custodian, as applicable, when
the need therefor by the Master Servicer or applicable Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the trust receipt shall be released by the Trustee or its
custodian, as applicable, to the Master Servicer (or the applicable
Servicer).
Section 9.13. Documents, Records and Funds in Possession of Master
----------------------------------------------------
Servicer To Be Held for Trustee. (a) The Master Servicer shall transmit,
-------------------------------
or cause the applicable Servicer to transmit, to the Trustee such documents
and instruments coming into the possession of the Master Servicer or such
Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee. Any funds received by the Master Servicer or by a
Servicer in respect of any Mortgage Loan or which otherwise are collected by
the Master Servicer or by a Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan shall be held for the benefit of the
Trustee and the Certificateholders subject to the Master Servicer's right to
retain or withdraw from the Collection Account the Master Servicing Fee and
other amounts provided in this Agreement, and to the right of each Servicer
to retain its Servicing Fee as provided in the applicable Servicing
Agreement. The Master Servicer shall, and shall (to the extent provided in
the applicable Servicing Agreement) cause each Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request and during
normal business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and
Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office
of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and
during normal business hours at the offices of the Master Servicer designated
by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, or any Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master
Servicer, or by any Servicer, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee; provided, however, that the Master Servicer and each Servicer
shall be entitled to setoff against, and deduct from, any such funds any
amounts that are properly due and payable to the Master Servicer or such
Servicer under this Agreement or the applicable Servicing Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage
Loans from the Seller to the Depositor not to constitute a sale, the Trustee
shall have a security interest in the Mortgage Loans and in all Mortgage
Files representing such Mortgage Loans and in all funds now or hereafter held
by, or under the control of, a Servicer or the Master Servicer that are
collected by any Servicer or the Master Servicer in connection with the
Mortgage Loans, whether as scheduled installments of principal and interest
or as full or partial prepayments of principal or interest or as Liquidation
Proceeds or Insurance Proceeds or otherwise, and in all proceeds of the
foregoing and proceeds of proceeds (but excluding any fee or other amounts to
which a Servicer is entitled under its Servicing Agreement, or the Master
Servicer or the Depositor is entitled to hereunder); and the Master Servicer
agrees that so long as the Mortgage Loans are assigned to and held by the
Trustee, all documents or instruments constituting part of the Mortgage
Files, and such funds relating to the Mortgage Loans which come into the
possession or custody of, or which are subject to the control of, the Master
Servicer or any Servicer shall be held by the Master Servicer or such
Servicer for and on behalf of the Trustee as the Trustee's agent and bailee
for purposes of perfecting the Trustee's security interest therein as
provided by the applicable Uniform Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not permit
any Servicer to, create, incur or subject any Mortgage Loans, or any funds
that are deposited in any custodial account, Escrow Account or the Collection
Account, or any funds that otherwise are or may become due or payable to the
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on,
or in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer.
-----------------------------------------------------
(a) The Master Servicer hereby represents and warrants to the Depositor and
the Trustee, for the benefit of the Certificateholders, as of the Closing
Date that:
(i) it is validly existing and in good standing under the
laws of the United States of America as a national banking association,
and as Master Servicer has full power and authority to transact any and
all business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized
by all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree
or order to which it is subject or (C) constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or
by which it is bound or to which any of its assets are subject, which
violation, default or breach would materially and adversely affect the
Master Servicer's ability to perform its obligations under this
Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer of
its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is an FNMA- and FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
and
(x) the Master Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond, each of which is in full force and
effect, and each of which provides at least such coverage as is required
hereunder.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 9.14 shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor and the
Trustee and hold them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in Section 9.14(a). It is
understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the Depositor and the Trustee
as provided in this Section constitutes the sole remedy (other than as set
forth in Section 6.14) of the Depositor and the Trustee, respecting a breach
of the foregoing representations and warranties. Such indemnification shall
survive any termination of the Master Servicer as Master Servicer hereunder,
and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer or the Trustee or notice thereof by any one of such parties
to the other parties.
(c) It is understood and agreed that the representations and warranties
of the Depositor set forth in Sections 2.03(a) through (f) shall survive the
execution and delivery of this Agreement. The Depositor shall indemnify the
Master Servicer and hold it harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on
or grounded upon, or resulting from, a breach of the Depositor's representa-
tions and warranties contained in Sections 2.03(a) through (f) hereof. It is
understood and agreed that the enforcement of the obligation of the Depositor
set forth in this Section to indemnify the Master Servicer as provided in
this Section constitutes the sole remedy of the Master Servicer respecting a
breach by the Depositor of the representations and warranties in Sections
2.03(a) through (f) hereof.
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)
through (f) hereof shall accrue upon discovery of such breach by either the
Depositor or the Master Servicer or notice thereof by any one of such parties
to the other parties.
Section 9.15. Closing Certificate and Opinion. On or before the
-------------------------------
Closing Date, the Master Servicer shall cause to be delivered to the
Depositor and ▇▇▇▇▇▇ Brothers Inc. an Opinion of Counsel, dated the Closing
Date, in form and substance reasonably satisfactory to the Depositor and
▇▇▇▇▇▇ Brothers Inc., as to the due authorization, execution and delivery of
this Agreement by the Master Servicer and the enforceability thereof. The
Master Servicer shall also deliver an Officer's Certificate, dated the
Closing Date, to the effect that no Event of Default by the Master Servicer
has occurred hereunder.
Section 9.16. Standard Hazard and Flood Insurance Policies. For
--------------------------------------------
each Mortgage Loan, the Master Servicer shall maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. It is understood and agreed that
such insurance shall be with insurers meeting the eligibility requirements
set forth in the applicable Servicing Agreement and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Pursuant to Section 4.01, any amounts collected by the Master Servicer,
or by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair
of the property subject to the related Mortgage or released to the Mortgagor
in accordance with the applicable Servicing Agreement) shall be deposited
into the Collection Account, subject to withdrawal pursuant to Section 4.02.
Any cost incurred by the Master Servicer or any Servicer in maintaining any
such insurance if the Mortgagor defaults in its obligation to do so shall be
added to the amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by
the Master Servicer or such Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds. The
------------------------------------------------
Master Servicer shall, or shall cause each Servicer (to the extent provided
in the applicable Servicing Agreement) to, prepare and present on behalf of
the Trustee and the Certificateholders all claims under the Insurance
Policies with respect to the Mortgage Loans, and take such actions (including
the negotiation, settlement, compromise or enforcement of the insured's
claim) as shall be necessary to realize recovery under such policies. Any
proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies or bonds shall
be promptly deposited in the Collection Account upon receipt, except that any
amounts realized that are to be applied to the repair or restoration of the
related Mortgaged Property as a condition requisite to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance
---------------------------------------------
Policies. (a) The Master Servicer shall not take, or permit any Servicer
--------
(consistent with the applicable Servicing Agreement) to take, any action that
would result in noncoverage under any applicable Primary Mortgage Insurance
Policy of any loss which, but for the actions of such Master Servicer or
Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to keep in force and effect, or to cause each
Servicer to keep in force and effect (to the extent that the Mortgage Loan
requires the Mortgagor to maintain such insurance), primary mortgage
insurance applicable to each Mortgage Loan in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. The
Master Servicer shall not, and shall not permit any Servicer to, cancel or
refuse to renew any such Primary Mortgage Insurance Policy that is in effect
at the date of the initial issuance of the Certificates and is required to be
kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under
any Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance
-------------------------------------------------
Policies and Documents. The Trustee (or its custodian, if any, as
----------------------
directed by the Trustee), shall retain possession and custody of the
originals of the Primary Mortgage Insurance Policies or certificate of
insurance if applicable and any certificates of renewal as to the foregoing
as may be issued from time to time as contemplated by this Agreement. Until
all amounts distributable in respect of the Certificates have been
distributed in full and the Master Servicer otherwise has fulfilled its
obligations under this Agreement, the Trustee (or its custodian, if any, as
directed by the Trustee) shall also retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions of
this Agreement. The Master Servicer shall promptly deliver or cause to be
delivered to the Trustee (or its custodian, if any, as directed by the
Trustee), upon the execution or receipt thereof the originals of the Primary
Mortgage Insurance Policies and any certificates of renewal thereof, and such
other documents or instruments that constitute portions of the Mortgage File
that come into the possession of the Master Servicer from time to time.
Section 9.20. Realization Upon Defaulted Mortgage Loans. The Master
-----------------------------------------
Servicer shall use its reasonable best efforts to, or to cause each Servicer
to, foreclose upon, repossess or otherwise comparably convert the ownership
of Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments, all in accordance with the applicable
Servicing Agreement.
Section 9.21. Compensation to the Master Servicer. The Master
-----------------------------------
Servicer shall (i) be entitled, at its election, either (a) to pay itself the
Master Servicing Fee, as reduced pursuant to Section 5.06, in respect of the
Mortgage Loans out of any Mortgagor payment on account of interest prior to
the deposit of such payment in the Collection Account it maintains or (b) to
withdraw from the Collection Account, subject to Section 5.06, the Master
Servicing Fee to the extent permitted by Section 4.02(iv). The Master
Servicer shall also be entitled, at its election, either (a) to pay itself
the Master Servicing Fee in respect of each delinquent Mortgage Loan master
serviced by it out of Liquidation Proceeds in respect of such Mortgage Loan
or other recoveries with respect thereto to the extent permitted in Section
4.02 or (b) to withdraw from the Collection Account it maintains the Master
Servicing Fee in respect of each Liquidated Mortgage Loan to the extent of
such Liquidation Proceeds or other recoveries, to the extent permitted by
Section 4.02. Servicing compensation in the form of assumption fees, if any,
prepayment fees, if any, late payment charges, as collected, if any, or
otherwise shall be retained by the Master Servicer (or the applicable
Servicer) and shall not be deposited in the Collection Account. If the
Master Servicer does not retain or withdraw the Master Servicing Fee from the
Collection Account as provided herein, the Master Servicer shall be entitled
to direct the Trustee to pay the Master Servicing Fee to such Master Servicer
by withdrawal from the Certificate Account to the extent that payments have
been received with respect to the applicable Mortgage Loan. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement. Pursuant to Section 4.01(e),
all income and gain realized from any investment of funds in the Collection
Account shall be for the benefit of the Master Servicer as additional
compensation. The provisions of this Section 9.21 are subject to the
provisions of Section 6.14(b).
Section 9.22. REO Property. (a) In the event the Trust Fund
------------
acquires ownership of any REO Property in respect of any Mortgage Loan, the
deed or certificate of sale shall be issued to the Trustee, or to its
nominee, on behalf of the Certificateholders. The Master Servicer shall use
its reasonable best efforts to sell, or, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement and the related Servicing Agreement, as
applicable, but in all events within the time period, and subject to the
conditions set forth in Article X hereof. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall protect and conserve, or cause
the applicable Servicer to protect and conserve, such REO Property in the
manner and to such extent required by the applicable Servicing Agreement,
subject to Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all
funds collected and received in connection with the operation of any REO
Property in the Collection Account it maintains.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances as well as any unpaid Master Servicing Fees or
Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Master Servicing Fees or Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of
any net rental income or other net amounts derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable
Servicer as provided above, shall be deposited in the Collection Account on
or prior to the Determination Date in the month following receipt thereof
(and the Master Servicer shall provide prompt written notice to the Trustee
upon such deposit) and be remitted by wire transfer in immediately available
funds to the Trustee for deposit into the Certificate Account at least one
Business Day prior to the next succeeding Distribution Date.
Section 9.23. Preparation of Tax Returns and Other Reports. (a)
--------------------------------------------
The Master Servicer shall prepare or cause to be prepared on behalf of the
Trust Fund, based upon information calculated in accordance with this
Agreement pursuant to instructions given by the Depositor, and the Trustee
shall file, federal tax returns and appropriate state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and the Trustee shall forward copies to the Depositor of all such
returns and Form 1099 information and such other information within the
control of the Trustee as the Depositor may reasonably request in writing,
and shall forward to each Certificateholder such forms and furnish such
information within the control of the Trustee as are required by the Code and
the REMIC Provisions to be furnished to them, and will prepare and file
annual reports required by applicable state authorities, will file copies of
this Agreement with the appropriate state authorities as may be required by
applicable law, and will prepare and disseminate to Certificateholders Form
1099 (or otherwise furnish information within the control of the Trustee) to
the extent required by applicable law. The Master Servicer will indemnify
the Trustee for any liability of or assessment against the Trustee resulting
from any error in any of such tax or information returns resulting from
errors in the information provided by such Master Servicer.
(b) The Master Servicer shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the Trust Fund, an application on IRS
Form SS-4. The Master Servicer, upon receipt from the IRS of the Notice of
Taxpayer Identification Number Assigned, shall promptly forward a copy of
such notice to the Trustee and the Depositor.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K and thereafter the Master Servicer will prepare or
cause to be prepared Form 10-Ks and Form 10-Qs (if necessary), or monthly
current reports on Form 8-K, on behalf of the Trust Fund, as may be required
by applicable law, for filing with the Securities and Exchange Commission
(the "SEC"). The Trustee will sign each such report on behalf of the Trust.
The Master Servicer will forward a copy of each such report to the Depositor
promptly after such report has been filed with the SEC. The Depositor agrees
to use its best efforts to seek to terminate such filing obligation after the
period during which such filings are required under the Securities Exchange
Act of 1934.
Section 9.24. Reports to the Trustee. (a) Not later than 30 days
----------------------
after each Distribution Date, the Master Servicer shall forward to the
Trustee a statement, deemed to have been certified by a Servicing Officer,
setting forth the status of the Collection Account maintained by the Master
Servicer as of the close of business on the related Distribution Date,
stating that all distributions required by this Agreement to be made by the
Master Servicer have been made (or if any required distribution has not been
made by the Master Servicer, specifying the nature and status thereof) and
showing, for the period covered by such statement, the aggregate of deposits
into and withdrawals from the Collection Account maintained by the Master
Servicer for each category of deposit specified in Section 4.01 and each
category of withdrawal specified in Section 4.02. Copies of such statement
shall be provided by the Master Servicer to the Depositor, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and, upon request, any Certificateholders (or by the
Trustee at the Master Servicer's expense if the Master Servicer shall fail to
provide such copies (unless (i) the Master Servicer shall have failed to
provide the Trustee with such statement or (ii) the Trustee shall be unaware
of the Master Servicer's failure to provide such statement)).
(b) Not later than two Business Days following each Distribution Date,
the Master Servicer shall deliver to the Person designated by the Depositor,
in a format consistent with other electronic loan level reporting supplied by
the Master Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related
Determination Date, to the extent that such information has been provided to
the Master Servicer by the Servicers or by the Depositor.
Section 9.25. Annual Officer's Certificate as to Compliance. (a)
---------------------------------------------
The Master Servicer shall deliver to the Trustee and the Rating Agencies on
or before May 31 of each year, commencing on May 31, 1997, an Officer's
Certificate, certifying that with respect to the period ending December 31:
(i) such Servicing Officer has reviewed the activities of such Master
Servicer during the preceding calendar year or portion thereof and its
performance under this Agreement, (ii) to the best of such Servicing
Officer's knowledge, based on such review, such Master Servicer has performed
and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) such Servicing Officer has conducted an
examination of the activities of each Servicer during the preceding calendar
year and its performance under the related Servicing Agreement, (iv) the
Master Servicer has received from each Servicer such Servicer's annual
certificate of compliance, (v) to the best of such Servicing Officer's
knowledge, based on such examination, each Servicer has performed and
fulfilled its duties, responsibilities and obligations under its Servicing
Agreement in all material respects throughout such year, or, if there has
been a material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at
the Master Servicer's expense if the Master Servicer failed to provide such
copies (unless (i) the Master Servicer shall have failed to provide the
Trustee with such statement or (ii) the Trustee shall be unaware of the
Master Servicer's failure to provide such statement).
Section 9.26. Annual Independent Accountants' Servicing Report. If
------------------------------------------------
the Master Servicer has, during the course of any fiscal year, directly
serviced any of the Mortgage Loans, then the Master Servicer at its expense
shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and
the Depositor on or before May 31 of each year, commencing on May 31, 1997 to
the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to
this Agreement and to each other and that, on the basis of such examination
conducted substantially in compliance with the audit program for mortgages
serviced for FHLMC or the Uniform Single Attestation Program for Mortgage
Bankers, such firm is of the opinion that the Master Servicer's activities
have been conducted in compliance with this Agreement, or that such
examination has disclosed no material items of noncompliance except for (i)
such exceptions as such firm believes to be immaterial, (ii) such other
exceptions as are set forth in such statement and (iii) such exceptions that
the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages Serviced by FHLMC requires it to report. Copies of
such statements shall be provided to any Certificateholder upon request by
the Master Servicer, or by the Trustee at the expense of the Master Servicer
if the Master Servicer shall fail to provide such copies. If such report
discloses exceptions that are material, the Master Servicer shall advise the
Trustee whether such exceptions have been or are susceptible of cure, and
will take prompt action to do so.
Section 9.27. Merger or Consolidation. Any Person into which the
-----------------------
Master Servicer may be merged or consolidated, or any Person resulting from
any merger, conversion, other change in form or consolidation to which the
Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or resulting Person to
the Master Servicer shall be a Person that shall be qualified and approved to
service mortgage loans for FNMA or FHLMC and shall have a net worth of not
less than $15,000,000.
Section 9.28. Resignation of Master Servicer. Except as otherwise
------------------------------
provided in Sections 9.27 and 9.29 hereof, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it unless it or the
Trustee determines that the Master Servicer's duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be
cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel that shall be
Independent to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee shall have assumed, or a successor
master servicer shall have been appointed by the Trustee and until such
successor shall have assumed, the Master Servicer's responsibilities and
obligations under this Agreement. Notice of such resignation shall be given
promptly by the Master Servicer to the Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master
------------------------------------------------
Servicer. Except as expressly provided herein, the Master Servicer shall
--------
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder; provided, however, that the
Master Servicer shall have the right without the prior written consent of the
Trustee, the Depositor or the Rating Agencies to delegate or assign to or
subcontract with or authorize or appoint an Affiliate of the Master Servicer
to perform and carry out any duties, covenants or obligations to be performed
and carried out by the Master Servicer hereunder. In no case, however, shall
any such delegation, subcontracting or assignment to an Affiliate of the
Master Servicer relieve the Master Servicer of any liability hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor
master servicer, the entire amount of the Master Servicing Fees and other
compensation payable to the Master Servicer pursuant hereto, including
amounts payable to or permitted to be retained or withdrawn by the Master
Servicer pursuant to Section 9.21 hereof, shall thereafter be payable to such
successor master servicer.
Section 9.30. Limitation on Liability of the Master Servicer and
--------------------------------------------------
Others. Neither the Master Servicer nor any of the directors, officers,
------
employees or agents of the Master Servicer shall be under any liability to
the Trustee or the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or
for errors in judgment; provided, however, that this provision shall not
protect the Master Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in its performance of its duties or by reason of reckless
disregard for its obligations and duties under this Agreement. The Master
Servicer and any director, officer, employee or agent of the Master Servicer
may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising
hereunder. The Master Servicer shall be under no obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties to
master service the Mortgage Loans in accordance with this Agreement and that
in its opinion may involve it in any expenses or liability; provided,
however, that the Master Servicer may in its sole discretion undertake any
such action that it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund and the Master Servicer shall be
entitled to be reimbursed therefor out of the Collection Account it maintains
as provided by Section 4.02.
Section 9.31. Indemnification; Third-Party Claims. The Master
-----------------------------------
Servicer agrees to indemnify the Depositor and the Trustee, and hold them
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liability, fees
and expenses that the Depositor and the Trustee may sustain as a result of
the failure of the Master Servicer to perform its duties and master service
the Mortgage Loans in compliance with the terms of this Agreement. The
Depositor and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans entitling the Depositor or the Trustee to indemnification hereunder,
whereupon the Master Servicer shall assume the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration. (a) An election will be made
--------------------
by the Trustee to treat the Trust Fund as a REMIC under the Code. Such
election will be made on Form 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. For the purposes of such
election, each Class A Certificate and each Component of a Class B
Certificate shall be designated as the "regular interests" in the REMIC and
the Class R Certificate shall be designated as the "residual interest" in the
REMIC.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 86OG(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Master Servicer in fulfilling
its duties hereunder (including its duties as tax return preparer). The
Master Servicer shall be entitled to reimbursement of expenses to the extent
provided in clause (i) above from the Collection Account.
(d) The Master Servicer shall prepare, and the Trustee shall sign and
file, all of each REMIC's federal and state tax and information returns as
such REMIC's direct representative. The expenses of preparing and filing
such returns shall be borne by the Master Servicer.
(e) The Master Servicer shall act as Tax Matters Person for each REMIC.
The Master Servicer or its designee shall perform on behalf of each REMIC all
reporting and other tax compliance duties that are the responsibility of such
REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing
authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Master Servicer shall provide (i) to
the Treasury or other governmental authority such information as is necessary
for the application of any tax relating to the transfer of a Residual
Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause the REMIC to take any action necessary to
create or maintain the status of such REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain
such status. Neither the Trustee, the Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause the REMIC to take any
action or fail to take (or fail to cause to be taken) any action that, under
the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of such REMIC as a REMIC or (ii) result in the imposition
of a tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event,
an "Adverse REMIC Event") unless the Trustee and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger
such status or result in the imposition of such a tax. In addition, prior to
taking any action with respect to the REMIC or the assets therein, or causing
such REMIC to take any action, which is not expressly permitted under the
terms of this Agreement, any Holder of a Residual Certificate will consult
with the Trustee and the Master Servicer, or their respective designees, in
writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to such REMIC, and no such Person shall take any
such action or cause such REMIC to take any such action as to which the
Trustee or the Master Servicer has advised it in writing that an Adverse
REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in such REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case
may be.
(h) The Master Servicer shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and
on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 1997, the
Master Servicer shall deliver to the Trustee and each Rating Agency an
Officer's Certificate stating the Master Servicer's compliance with the
provisions of this Section 10.01.
Section 10.02. Prohibited Transactions and Activities. Neither the
--------------------------------------
Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust
Fund, (iii) the termination of each REMIC pursuant to Article VII of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement or
(v) a repurchase of Mortgage Loans pursuant to Article II of this Agreement,
nor acquire any assets for any REMIC, nor sell or dispose of any investments
in the Certificate Account for gain, nor accept any contributions to the
REMIC after the Closing Date, unless it has received an Opinion of Counsel
(at the expense of the party causing such sale, disposition, or substitution)
that such disposition, acquisition, substitution, or acceptance will not (a)
affect adversely the status of such REMIC as a REMIC or of the Certificates
(or of the Components, in the case of the Class B Certificates) other than
the Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions
pursuant to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and
-------------------------------------------------
Loss of REMIC Status. (a) In the event that any REMIC fails to qualify
--------------------
as a REMIC, loses its status as a REMIC, or incurs federal, state or local
taxes as a result of a prohibited transaction or prohibited contribution
under the REMIC Provisions due to the negligent performance by the Master
Servicer of its duties and obligations set forth herein, the Master Servicer
shall indemnify the Holder of the related Residual Certificate against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that the Master Servicer shall not
be liable for any such Losses attributable to the action or inaction of the
Trustee, the Depositor, or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Master Servicer has
relied. The foregoing shall not be deemed to limit or restrict the rights
and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Master Servicer have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement,
(2) for any Losses other than arising out of a negligent performance by the
Master Servicer of its duties and obligations set forth herein, and (3) for
any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
Section 10.04. REO Property. (a) Notwithstanding any other
------------
provision of this Agreement, the Master Servicer, acting on behalf of the
Trustee hereunder, shall not, and shall, to the extent provided in the
applicable Servicing Agreement, not permit any Servicer to, rent, lease, or
otherwise earn income on behalf of any REMIC with respect to any REO Property
which might cause such REO Property to fail to qualify as "foreclosure"
property within the meaning of section 860G(a)(8) of the Code or result in
the receipt by any REMIC of any "income from non-permitted assets" within the
meaning of section 860F(a)(2) of the Code or any "net income from foreclosure
property" which is subject to tax under the REMIC Provisions unless the
Master Servicer has advised, or has caused the applicable Servicer to advise,
the Trustee in writing to the effect that, under the REMIC Provisions, such
action would not adversely affect the status of the REMIC as a REMIC and any
income generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Master Servicer shall make, or shall cause the applicable
Servicer to make, reasonable efforts to sell any REO Property for its fair
market value. In any event, however, the Master Servicer shall, or shall
cause the applicable Servicer to, dispose of any REO Property within three
years of its acquisition by the Trust Fund unless the Trustee has received a
grant of extension from the Internal Revenue Service to the effect that,
under the REMIC Provisions and any relevant proposed legislation and under
applicable state law, the REMIC may hold REO Property for a longer period
without adversely affecting the REMIC status of such REMIC or causing the
imposition of a Federal or state tax upon such REMIC. If the Trustee has
received such an extension, then the Trustee, or the Master Servicer, acting
on its behalf hereunder, shall, or shall cause the applicable Servicer to,
continue to attempt to sell the REO Property for its fair market value for
such period longer than three years as such extension permits (the "Extended
Period"). If the Trustee has not received such an extension and the Trustee,
or the Master Servicer acting on behalf of the Trustee hereunder, or the
applicable Servicer is unable to sell the REO Property within 33 months after
its acquisition by the Trust Fund or if the Trustee has received such an
extension, and the Trustee, or the Master Servicer acting on behalf of the
Trustee hereunder, is unable to sell the REO Property within the period
ending three months before the close of the Extended Period, the Master
Servicer shall, or shall cause the applicable Servicer to, before the end of
the three year period or the Extended Period, as applicable, (i) purchase
such REO Property at a price equal to the REO Property's fair market value or
(ii) auction the REO Property to the highest bidder (which may be the Master
Servicer) in an auction reasonably designed to produce a fair price prior to
the expiration of the two-year period or the Extended Period, as the case may
be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties----------------
----------------------- hereto and their respective successors and permitted
assigns.
Section 11.02. Entire Agreement. This Agreement contains the entire
----------------
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof.
Section 11.03. Amendment. (a) This Agreement may be amended from
---------
time to time by the Depositor, the Master Servicer and the Trustee, without
notice to or the consent of any of the Holders, (i) to cure any ambiguity,
(ii) to cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the
Trust Fund or this Agreement in any Offering Document; or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein, (iii) to make any other provisions with respect to matters
or questions arising under this Agreement or (iv) to add, delete, or amend
any provisions to the extent necessary or desirable to comply with any
requirements imposed by the Code and the REMIC Provisions. No such amendment
effected pursuant to the preceding sentence shall, as evidenced by an Opinion
of Counsel, adversely affect the status of any REMIC created pursuant to this
Agreement, nor shall such amendment effected pursuant to clause (iii) of such
sentence adversely affect in any material respect the interests of any
Holder. Prior to entering into any amendment without the consent of Holders
pursuant to this paragraph, the Trustee may require an Opinion of Counsel (at
the expense of the party requesting such amendment) to the effect that such
amendment is permitted under this paragraph. Any such amendment shall be
deemed not to adversely affect in any material respect any Holder, if the
Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce the then current rating
assigned to the Certificates (and any Opinion of Counsel requested by the
Trustee in connection with any such amendment may rely expressly on such
confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the
Holders of not less than 66-2/3% of the Class Certificate Principal Amount
(or Aggregate Notional Amount) of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; provided, however, that no such amendment
shall be made unless the Trustee receives an Opinion of Counsel, at the
expense of the party requesting the change, that such change will not
adversely affect the status of any REMIC as a REMIC or cause a tax to be
imposed on such REMIC; and provided further, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received
on Mortgage Loans which are required to be distributed on any Certificate,
without the consent of the Holder of such Certificate or (ii) reduce the
aforesaid percentages of Class Certificate Principal Amount (or Aggregate
Notional Amount) of Certificates of each Class, the Holders of which are
required to consent to any such amendment without the consent of the Holders
of 100% of the Class Certificate Principal Amount (or Aggregate Notional
Amount) of each Class of Certificates affected thereby. For purposes of this
paragraph, references to "Holder" or "Holders" shall be deemed to include, in
the case of any Class of Book-Entry Certificates, the related Certificate
Owners.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the authorization of
the execution thereof by Holders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 11.04. Voting Rights. Except to the extent that the consent
-------------
of all affected Certificateholders is required pursuant to this Agreement,
with respect to any provision of this Agreement requiring the consent of
Certificateholders representing specified percentages of aggregate
outstanding Certificate Principal Amount (or Notional Amount), Certificates
owned by the Depositor, the Master Servicer, the Trustee or any Servicer or
Affiliates thereof are not to be counted so long as such Certificates are
owned by the Depositor, the Master Servicer, the Trustee or any Servicer or
Affiliates thereof.
Section 11.05. Provision of Information. (a) For so long as any of
------------------------
the Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Depositor and the
Trustee agree to cooperate with each other to provide to any
Certificateholders and to any prospective purchaser of Certificates
designated by such Certificateholder, upon the request of such
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Act. Any reasonable, out-of-pocket
expenses incurred by the Trustee in providing such information shall be
reimbursed by the Depositor.
(b) The Trustee will provide to any person to whom a Prospectus was
delivered, upon the request of such person specifying the document or
documents requested, (i) a copy (excluding exhibits) of any report on Form 8-
K or Form 10-K filed with the Securities and Exchange Commission pursuant to
Section 9.23(c) and (ii) a copy of any other document incorporated by
reference in the Prospectus. Any reasonable out-of-pocket expenses incurred
by the Trustee in providing copies of such documents shall be reimbursed by
the Depositor.
(c) On each Distribution Date, the Trustee shall deliver or cause to be
delivered by first class mail to the Depositor, Attention: Contract Finance,
a copy of the report delivered to Certificateholders pursuant to Section
4.03.
Section 11.06. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
APPLIED IN NEW YORK.
Section 11.07. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given
when received by (a) in the case of the Depositor, Structured Asset
Securities Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇, (b) in the case of the Trustee, First Union
National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Structured Finance, and (c) in the case of the Master
Servicer, Norwest Bank Minnesota, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Vice President of Master
Servicing, or as to each party such other address as may hereafter be
furnished by such party to the other parties in writing. Any notice required
or permitted to be mailed to a Holder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of
--------------------------
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or
of the Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers. Neither the failure nor any
-----------------------
delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power
or privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
Section 11.10. Headings Not To Affect Interpretation. The headings
-------------------------------------
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement. Nothing in this Agreement or
---------------------
in the Certificates, express or implied, shall give to any Person, other than
the parties to this Agreement and their successors hereunder and the Holders
of the Certificates, any benefit or any legal or equitable right, power,
remedy or claim under this Agreement, except to the extent specified in
Sections 11.14 and 11.15.
Section 11.12. Special Notices to the Rating Agencies. (a) The
--------------------------------------
Depositor shall give prompt notice to the Rating Agencies of the occurrence
of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section
11.03;
(ii) any Assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master
Servicer pursuant to Section 6.14 and any resignation of the Master
Servicer hereunder;
(v) the appointment of any successor to any Master
Servicer pursuant to Section 6.14; and
(vi) the making of a final payment pursuant to Section
7.02.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:
If to Fitch, to:
Fitch Investors Service, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgage Surveillance
If to S&P, to:
Standard & Poor's Rating Services
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgages
(c) The Trustee shall deliver to the Rating Agencies reports
prepared pursuant to Section 4.03.
Section 11.13. Counterparts. This Agreement may be executed in one
------------
or more counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
Section 11.14. Transfer of Servicing. ▇▇▇▇▇▇ Capital agrees that it
---------------------
shall provide written notice to the Trustee and the Master Servicer thirty
days prior to any transfer or assignment by ▇▇▇▇▇▇ Capital of its rights
under any Servicing Agreement or of the servicing thereunder or delegation of
its rights or duties thereunder or any portion thereof to any Person other
than the initial Servicer under such Servicing Agreement. In addition, the
ability of ▇▇▇▇▇▇ Capital to transfer or assign its rights and delegate its
duties under any Servicing Agreement or to transfer the servicing thereunder
to a successor servicer shall be subject to the following conditions:
(i) Such successor servicer must be qualified to service loans for
FNMA or FHLMC;
(ii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the applicable Servicing Agreement, exclusive
of any experience in mortgage loan origination, and must be reasonably
acceptable to the Master Servicer, whose approval shall not be
unreasonably withheld;
(iii) Such successor servicer must execute and deliver to the
Trustee and the Master Servicer an agreement, in form and substance
reasonably satisfactory to the Trustee and the Master Servicer, that
contains an assumption by such successor servicer of the due and
punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer under the applicable Servicing
Agreement;
(iv) There must be delivered to the Trustee a letter from each
Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates;
(v) ▇▇▇▇▇▇ Capital shall, at its cost and expense, take such
steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including,
but not limited to, the following: (A) to the extent required by the
terms of the Mortgage Loans and by applicable federal and state laws and
regulations, ▇▇▇▇▇▇ Capital shall cause the prior Servicer to timely
mail to each obligor under a Mortgage Loan any required notices or
disclosures describing the transfer of servicing of the Mortgage Loans
to the successor servicer; (B) prior to the effective date of such
transfer of servicing, ▇▇▇▇▇▇ Capital shall cause the prior Servicer to
transmit to any related insurer notification of such transfer of
servicing; (C) on or prior to the effective date of such transfer of
servicing, ▇▇▇▇▇▇ Capital shall cause the prior Servicer to deliver to
the successor servicer all Mortgage Loan Documents and any related
records or materials; (D) on or prior to the effective date of such
transfer of servicing, ▇▇▇▇▇▇ Capital shall cause the prior Servicer to
transfer to the successor servicer, or, if such transfer occurs after a
Remittance Date but before the next succeeding Deposit Date, to the
Master Servicer, all funds held by the Servicer in respect of the
Mortgage Loans; (E) on or prior to the effective date of such transfer
of servicing, ▇▇▇▇▇▇ Capital shall cause the prior Servicer to, after
the effective date of the transfer of servicing to the successor
servicer, continue to forward to such successor servicer, within one
Business Day of receipt, the amount of any payments or other recoveries
received by the prior Servicer, and to notify the successor servicer of
the source and proper application of each such payment or recovery; and
(F) ▇▇▇▇▇▇ Capital shall cause the prior Servicer to, after the
effective date of transfer of servicing to the successor servicer,
continue to cooperate with the successor servicer to facilitate such
transfer in such manner and to such extent as the successor servicer may
reasonably request.
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer
have caused their names to be signed hereto by their respective officers
hereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:
-----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Trustee
By:
-----------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Master Servicer
By:
-----------------------------
Name:
Title:
Solely for purposes of Section 11.14,
accepted and agreed to by:
▇▇▇▇▇▇ CAPITAL, A DIVISION OF
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By:___________________________________
Name:
Title:
EXHIBIT A
---------
FORMS OF CERTIFICATES
EXHIBIT B-1
-----------
FORM OF INITIAL CERTIFICATION
-----------------
Date
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of October 1,
---------------
1997 among Structured Asset Securities Corporation, as Depositor, First Union
National Bank, as Trustee, and Norwest Bank Minnesota, National Association,
as Master Servicer, with respect to Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 1997-2
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Trustee, hereby certifies
that it (or its custodian) has received the documents listed in Section
2.01(b) of the Trust Agreement for each Mortgage File pertaining to each
Mortgage Loan listed on Schedule A, to the Trust Agreement, subject to any
exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Trust Agreement and the Trust Agreement sections
cross-referenced therein.
((Custodian), on behalf of)
FIRST UNION NATIONAL BANK,
as Trustee
By:______________________________
Name:
Title:
EXHIBIT B-2
-----------
FORM OF INTERIM CERTIFICATION
--------------------
(date)
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of October 1,
1997 among Structured Asset Securities Corporation, as Depositor,
First Union National Bank, as Trustee, and Norwest Bank Minnesota,
National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1997-2
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust 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 listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01(b) of the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement including, but
not limited to, Section 2.02(b).
((Custodian), on behalf of)
FIRST UNION NATIONAL BANK,
as Trustee
By:_______________________________
Name:
Title:
EXHIBIT B-3
-----------
FORM OF FINAL CERTIFICATION
----------------------
(Date)
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of October 1,
1997 among Structured Asset Securities Corporation, as Depositor,
First Union National Bank, as Trustee, and Norwest Bank Minnesota,
National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1997-2
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust 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 listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01(b) of the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement.
((Custodian), on behalf of)
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT B-4
-----------
FORM OF ENDORSEMENT
Pay to the order of First Union National Bank, as trustee (the
"Trustee") under the Trust Agreement dated as of October 1, 1997, among
Structured Asset Securities Corporation, as Depositor, the Trustee and the
Master Servicer relating to Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 1997-2, without recourse.
__________________________________
(current signatory on note)
By:_______________________________
Name:
Title:
EXHIBIT C
---------
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
----------------------
(Date)
(Addressed to Trustee
or, if applicable, custodian)
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of October 1, 1997 among
Structured Asset Securities Corporation, as Depositor, Norwest Bank
Minnesota, National Association, as Master Servicer, and you, as Trustee (the
"Trust Agreement"), the undersigned Master Servicer hereby requests a release
of the Mortgage File held by you as Trustee with respect to the following
described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The Master Servicer hereby certifies
that all amounts received in connection with the loan have been or will be
credited to the Collection Account or the Certificate Account (whichever is
applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The Master Servicer hereby certifies that
a Qualifying Substitute Mortgage Loan has been assigned and delivered to you
along with the related Mortgage File pursuant to the Trust Agreement.)
4. Mortgage Loan repurchased. (The Master Servicer hereby certifies that
the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust
Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Trust Agreement
and will be returned to you within ten (10) days of our receipt of the
Mortgage File, except if the Mortgage Loan has been paid in full, or
repurchased or substituted for a Qualifying Substitute Mortgage Loan (in
which case the Mortgage File will be retained by us permanently) and except
if the Mortgage Loan is being foreclosed (in which case the Mortgage File
will be returned when no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them
in the Trust Agreement.
__________________________________
(Name of Master Servicer)
By:_______________________________
Name:
Title: Servicing Officer
EXHIBIT D-1
-----------
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
(NAME OF OFFICER), _________________ being first duly sworn,
deposes and says:
1. That he (she) is (title of officer) ___________
_____________ of (name of Purchaser) ________________________
_________________ (the "Purchaser"), a _______________________ (description
of type of entity) duly organized and existing under the laws of the (State
of __________) (United States), on behalf of which he (she) makes this
affidavit.
2. That the Purchaser's Taxpayer Identification Number is
( ).
3. That the Purchaser is not a "disqualified organization" within
the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as
amended (the "Code") and will not be a "disqualified organization" as of
(date of transfer), and that the Purchaser is not acquiring a Residual
Certificate (as defined in the Agreement) for the account of, or as agent
(including a broker, nominee, or other middleman) for, any person or entity
from which it has not received an affidavit substantially in the form of this
affidavit. For these purposes, a "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of
any of the foregoing (other than an instrumentality if all of its activities
are subject to tax and a majority of its board of directors is not selected
by such governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural areas as
described in Code Section 1381(a)(2)(C), or any organization (other than a
farmers' cooperative described in Code Section 521) that is exempt from
federal income tax unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511.
4. That the Purchaser is not, and on __________ (insert date of
transfer of Residual Certificate to Purchaser) will not be, and is not and on
such date will not be investing the assets of, an employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan subject to Code Section 4975 or a person or entity that
is using the assets of any employee benefit plan or other plan to acquire a
Residual Certificate.
5. That the Purchaser hereby acknowledges that under the terms of
the Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, First Union National Bank, as Trustee and Norwest Bank
Minnesota, National Association, as Master Servicer, dated as of October 1,
1997, no transfer of the Residual Certificates shall be permitted to be made
to any person unless the Trustee has received a certificate from such
transferee to the effect that such transferee is not an employee benefit plan
subject to ERISA or a plan subject to Section 4975 of the Code and is not
using the assets of any employee benefit plan or other plan to acquire
Residual Certificates.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations
(such entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally
required to be paid with respect to such Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate to
any person or entity (i) as to which the Purchaser has actual knowledge that
the requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof
are not satisfied or that the Purchaser has reason to believe does not
satisfy the requirements set forth in paragraph 7 hereof, and (ii) without
obtaining from the prospective Purchaser an affidavit substantially in this
form and providing to the Trustee a written statement substantially in the
form of Exhibit G to the Agreement.
9. That the Purchaser understands that, as the holder of a
Residual Certificate, the Purchaser may incur tax liabilities in excess of
any cash flows generated by the interest and that it intends to pay taxes
associated with holding such Residual Certificate as they become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in connection with the
conduct of a trade or business within the United States and has furnished the
transferor and the Trustee with an effective Internal Revenue Service Form
4224 or successor form at the time and in the manner required by the Code or
(iii) is a Non-U.S. Person that has delivered to both the transferor and the
Trustee an opinion of a nationally recognized tax counsel to the effect that
the transfer of such Residual Certificate to it is in accordance with the
requirements of the Code and the regulations promulgated thereunder and that
such transfer of a Residual Certificate will not be disregarded for federal
income tax purposes. "Non-U.S. Person" means an individual, corporation,
partnership or other person other than a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or
an estate or trust that is subject to U.S. federal income tax regardless of
the source of its income.
11. That the Purchaser agrees to such amendments of the Trust
Agreement as may be required to further effectuate the restrictions on
transfer of any Residual Certificate to such a "disqualified organization,"
an agent thereof, a Book-Entry Nominee, or a person that does not satisfy the
requirements of paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Master
Servicer as its agent to act as "tax matters person" of the Trust Fund
pursuant to the Trust Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its (title of officer) this _____ day of __________, 19__.
_________________________________
(name of Purchaser)
By:______________________________
Name:
Title:
Personally appeared before me the above-named (name of officer)
________________, known or proved to me to be the same person who executed
the foregoing instrument and to be the (title of officer) _________________
of the Purchaser, and acknowledged to me that he (she) executed the same as
his (her) free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________, 19__.
NOTARY PUBLIC
______________________________
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________, 19__.
EXHIBIT D-2
-----------
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
___________________
Date
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates
---------------------------------------
_______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and
has no actual knowledge that such affidavit is not true and has no reason to
believe that the information contained in paragraph 7 thereof is not true,
and has no reason to believe that the Transferee has the intention to impede
the assessment or collection of any federal, state or local taxes legally
required to be paid with respect to a Residual Certificate. In addition, the
Transferor has conducted a reasonable investigation at the time of the
transfer and found that the Transferee had historically paid its debts as
they came due and found no significant evidence to indicate that the
Transferee will not continue to pay its debts as they become due.
Very truly yours,
_______________________________
Name:
Title:
EXHIBIT E
---------
SERVICING AGREEMENTS
EXHIBIT F
---------
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates
Series 1997-2
---------------------------------------
Reference is hereby made to the Trust Agreement dated as of October
1, 1997 (the "Trust Agreement") among Structured Asset Securities
Corporation, as Depositor, Norwest Bank Minnesota, National Association, as
Master Servicer and First Union National Bank, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Trust Agreement.
This letter relates to $_________ initial Certificate Balance of
Class Certificates which are held in the form of Definitive
-----
Certificates registered in the name of
--------------------------------
(the "Transferor"). The Transferor has requested a transfer of such
Definitive Certificates for Definitive Certificates of such Class registered
in the name of (insert name of transferee).
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are
being transferred in accordance with (i) the transfer restrictions set forth
in the Trust Agreement and the Certificates and (ii) Rule 144A under the
Securities Act to a purchaser that the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A purchasing
for its own account or for the account of a "qualified institutional buyer",
which purchaser is aware that the sale to it is being made in reliance upon
Rule 144A, in a transaction meeting the requirements of Rule 144A and in
accordance with any applicable securities laws of any state of the United
States or any other applicable jurisdiction.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Placement Agent and the Depositor.
_____________________________________
(Name of Transferor)
By:__________________________________
Name:
Title:
Dated: ___________, ____
EXHIBIT G
---------
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
----------------------
(Date)
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Mortgage Pass-Through Certificates, Series 1997-2 (the "Privately
Offered Certificates") of Structured Asset Securities Corporation (the
"Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Privately Offered Certificates within three years of the
later of the date of original issuance of the Privately Offered
Certificates or the last day on which such Privately Offered
Certificates are owned by the Depositor or any affiliate of the
Depositor (which includes the Placement Agent) we will do so only (A) to
the Depositor, (B) to "qualified institutional buyers" (within the
meaning of Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act ("QIBs"), (C) pursuant to an exemption
from registration in accordance with Rule 904 of Regulation S under the
Securities Act, (D) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act, or (E) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Trustee under the Trust Agreement dated as of October 1,
1997 among the Depositor, Norwest Bank Minnesota, National Association,
as Master Servicer and First Union National Bank, as Trustee (the
"Trustee"), a signed letter in the form of this letter; and we further
agree, in the capacities stated above, to provide to any person
purchasing any of the Privately Offered Certificates from us a notice
advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Trustee and the Depositor a
certification from such transferee in the form hereof to confirm that
the proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that in
accordance with ERISA, the Code and the Exemption, no Plan as to which
the Purchaser, the Depositor, any Servicer or Master Servicer or the
Trustee is a party in interest or disqualified person, and no person
acting on behalf of such a Plan may acquire such Certificate unless the
acquisition would constitute an exempt transaction under a statutory
exemption or any of the administrative exemptions issued by the U.S.
Department of Labor.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.
You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
__________________________________
(Purchaser)
By________________________________
Name:
Title:
EXHIBIT H
---------
(FORM OF ERISA TRANSFER AFFIDAVIT)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is the ______________________ of (the
"Investor"), a (corporation duly organized) and existing under the laws of
__________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), the Trustee of any such plan
or a person acting on behalf of any such plan nor a person using the assets
of any such plan or (2) if the Investor is an insurance company, such
Investor is purchasing such Certificates with funds contained in an
"Insurance Company General Account" (as such term is defined in Section v(e)
of the Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that
the purchase and holding of such Certificates are covered under PTCE 95-60;
or (y) shall deliver to the Trustee and the Depositor an opinion of counsel
(a "Benefit Plan Opinion") satisfactory to the Trustee and the Depositor, and
upon which the Trustee and the Depositor shall be entitled to rely, to the
effect that the purchase or holding of such Certificate by the Investor will
not result in the assets of the Trust Fund being deemed to be plan assets and
subject to the prohibited transaction provisions of ERISA or the Code and
will not subject the Trustee or the Depositor to any obligation in addition
to those undertaken by such entities in the Trust Agreement, which opinion of
counsel shall not be an expense of the Trustee or the Depositor.
3. The Investor hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, as Depositor, Norwest Bank Minnesota, National Association, as
Master Servicer, and First Union National Bank, as Trustee, dated as of
October 1, 1997, no transfer of the ERISA-Restricted Certificates shall be
permitted to be made to any person unless the Depositor and Trustee have
received a certificate from such transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 199 .
-
_________________________________
(Investor)
By:______________________________
Name:
Title:
ATTEST:
___________________________
STATE OF )
)ss.:
COUNTY OF )
Personally appeared before me the above-named
_________________, known or proved to me to be the same person who executed
the foregoing instrument and to be the _________________ of the Investor, and
acknowledged that he executed the same as his free act and deed and the free
act and deed of the Investor.
Subscribed and sworn before me this _____ day of ___________ 199__.
__________________________________
NOTARY PUBLIC
My commission expires the
____ day of __________, 19__.
EXHIBIT I
---------
MONTHLY REMITTANCE ADVICE
EXHIBIT J
---------
MONTHLY ELECTRONIC DATA TRANSMISSION
EXHIBIT K
---------
CUSTODIAL AGREEMENTS
SCHEDULE A
----------
MORTGAGE LOAN SCHEDULE
SCHEDULE B
----------
PRINCIPAL AMOUNT SCHEDULES
(Not Applicable)