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SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
WILSHIRE SERVICING CORPORATION
Master Servicer
and
BANKERS TRUST COMPANY
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1998
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Mortgage Pass-Through Certificates
Series 1998-WFC1
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS
1.01. Defined Terms..................................................................................4
Accrued Certificate Interest...................................................................4
Adjustment Date................................................................................4
Affiliate......................................................................................4
Aggregate Subordinate Percentage...............................................................5
Agreement......................................................................................5
Assignment.....................................................................................5
Bankruptcy Amount..............................................................................5
Bankruptcy Code................................................................................5
Bankruptcy Loss................................................................................5
Book-Entry Certificate.........................................................................5
Book-Entry Custodian...........................................................................5
BPO .......................................................................................5
Business Day...................................................................................5
Certificate....................................................................................6
Certificate Balance............................................................................6
Certificate Factor.............................................................................6
Certificate Notional Amount....................................................................6
Certificate Owner..............................................................................6
Certificate Register" and "Certificate Registrar...............................................6
Certificateholder" or "Holder..................................................................6
Class .......................................................................................7
Class A-1 Certificate..........................................................................7
Class A-1 Percentage...........................................................................7
Class A-1 Prepayment Percentage................................................................7
Principal Distribution Amount..................................................................9
Class A-2 Certificate.........................................................................10
Class A-2 Cross-Collateralization Entitlement Amount..........................................11
Class A-2 Principal Distribution Amount.......................................................11
Class B Certificate...........................................................................11
Class B Percentage............................................................................11
Class B-1 Certificate.........................................................................11
Class B-2 Certificate.........................................................................11
Class B-3 Certificate.........................................................................11
Class B-4 Certificate.........................................................................11
Class B-5 Certificate.........................................................................12
Class B-6 Certificate.........................................................................12
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SECTION PAGE
Class Certificate Balance.....................................................................12
Class Notional Amount.........................................................................12
Class PO Certificate..........................................................................12
Class PO Cross-Collateralization Entitlement Amount...........................................12
Class PO Principal Distribution Amount........................................................12
Class R-I Certificate.........................................................................13
Class R-II Certificate........................................................................13
Class XS Certificate..........................................................................13
Closing Date..................................................................................13
Code ......................................................................................13
Collection Account............................................................................13
Commission....................................................................................13
Component.....................................................................................13
Component Notional Amount.....................................................................13
Corporate Trust Office........................................................................14
Cross-Collateralization Event.................................................................14
Custodian.....................................................................................14
Cut-off Date..................................................................................14
DCR ......................................................................................14
Debt Service Reduction........................................................................14
Deficient Valuation...........................................................................14
Definitive Certificates.......................................................................14
Deleted Mortgage Loan.........................................................................14
Depositor.....................................................................................14
Depository....................................................................................15
Depository Institution........................................................................15
Depository Participant........................................................................15
Determination Date............................................................................15
Directly Operate..............................................................................15
Disqualified Organization.....................................................................15
Distribution Account..........................................................................16
Distribution Date.............................................................................16
Due Date......................................................................................16
Due Period....................................................................................16
Effective Pass-Through Rate...................................................................16
Eligible Account..............................................................................16
ERISA ......................................................................................17
Estate in Real Property.......................................................................17
Excess Bankruptcy Loss........................................................................17
Excess Fraud Loss.............................................................................17
Excess Loss...................................................................................17
Excess Special Hazard Loss....................................................................17
Extraordinary Loss............................................................................17
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SECTION PAGE
Extraordinary Trust Fund Expenses.............................................................18
FDIC ......................................................................................18
FHA ......................................................................................18
FHLMC ......................................................................................18
Final Recovery Determination..................................................................18
FNMA ......................................................................................18
Fraud Loss....................................................................................18
Fraud Loss Amount.............................................................................18
Gross Margin..................................................................................19
Independent...................................................................................19
Independent Contractor........................................................................19
Index ......................................................................................19
Initial Class Certificate Balance.............................................................20
Insurance Proceeds............................................................................20
Interest Accrual Period.......................................................................20
Interest Distribution Amount..................................................................20
Late Collections..............................................................................20
Liquidation Event.............................................................................20
Liquidation Proceeds..........................................................................20
Loan-to-Value Ratio...........................................................................21
Master Servicer...............................................................................21
Master Servicer Event of Default..............................................................21
Master Servicer Remittance Date...............................................................21
Maximum Mortgage Rate.........................................................................21
Monthly Payment...............................................................................21
Xxxxx'x ......................................................................................21
Mortgage......................................................................................21
Mortgage File.................................................................................21
Mortgage Loan.................................................................................21
Mortgage Loan Purchase Agreement..............................................................21
Mortgage Loan Schedule........................................................................22
Mortgage Loan Seller..........................................................................23
Mortgage Note.................................................................................23
Mortgage Pool.................................................................................23
Mortgage Rate.................................................................................23
Mortgaged Property............................................................................23
Mortgagor.....................................................................................23
Net Mortgage Rate.............................................................................23
New Lease.....................................................................................24
Non-PO Mortgage Loan..........................................................................24
Non-PO Percentage.............................................................................24
Nonrecoverable Payment Advance................................................................24
Non-United States Person......................................................................24
iii
SECTION PAGE
Officers' Certificate.........................................................................24
Opinion of Counsel............................................................................24
Original Mortgage Loan........................................................................24
Original Sub-Pool 1 Loan......................................................................24
Original Sub-Pool 2 Loan......................................................................24
Ownership Xxxxxxxx............................................................................00
X&X Certificates..............................................................................24
Pass-Through Rate.............................................................................25
Payment Advance...............................................................................26
Percentage Interest...........................................................................26
Periodic Rate Cap.............................................................................26
Permitted Investments.........................................................................26
Permitted Transferee..........................................................................27
Person ......................................................................................27
Plan ......................................................................................27
Plurality Residual Certificateholder..........................................................28
Prepayment Assumption.........................................................................28
Prepayment Diversion Event....................................................................28
Prepayment Interest Shortfall.................................................................28
Prepayment Period.............................................................................28
Principal Prepayment..........................................................................28
Purchase Price................................................................................28
Qualified Substitute Mortgage Loan............................................................29
Rating Agency or Rating Agencies..............................................................30
Realized Loss.................................................................................30
Record Date...................................................................................31
Regular Interest..............................................................................31
Relief Act....................................................................................31
Relief Act Interest Shortfall.................................................................31
REMIC ......................................................................................31
REMIC I ......................................................................................31
REMIC I Regular Interest......................................................................32
REMIC I Remittance Rate.......................................................................32
REMIC II......................................................................................32
REMIC II Certificate..........................................................................32
REMIC II Regular Certificate..................................................................32
REMIC Provisions..............................................................................32
Remittance Report.............................................................................32
Rents from Real Property......................................................................33
REO Account...................................................................................33
REO Disposition...............................................................................33
REO Imputed Interest..........................................................................33
REO Principal Amortization....................................................................33
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SECTION PAGE
REO Property..................................................................................33
Request for Release...........................................................................33
Residential Dwelling..........................................................................33
Residual Certificate..........................................................................33
Residual Interest.............................................................................34
Responsible Officer...........................................................................34
Scheduled Principal Balance...................................................................34
Senior P&I Certificates.......................................................................34
Servicing Account.............................................................................34
Servicing Advances............................................................................35
Servicing Fee.................................................................................35
Servicing Fee Rate............................................................................35
Servicing Officer.............................................................................35
Single Certificate............................................................................35
Special Hazard Amount.........................................................................35
Special Hazard Loss...........................................................................36
Startup Day...................................................................................36
Stated Principal Balance......................................................................36
Stayed Funds..................................................................................37
Subordinate Percentage........................................................................37
Subordinate Prepayment Percentage.............................................................37
Subordinate Principal Distribution Amount.....................................................37
Available Distribution Amount.................................................................39
Sub-Pool 1....................................................................................39
Sub-Pool 2....................................................................................39
Sub-Servicer..................................................................................40
Sub-Servicing Account.........................................................................40
Sub-Servicing Agreement.......................................................................40
Tax Returns...................................................................................40
Termination Price.............................................................................40
Transfer......................................................................................40
Transferee....................................................................................40
Transferor....................................................................................40
Trust Fund....................................................................................40
Trustee ......................................................................................40
Trustee's Fee.................................................................................40
Trustee's Fee Rate............................................................................41
Uncertificated Accrued Interest...............................................................41
Uncertificated Balance........................................................................41
Uninsured Cause...............................................................................41
United States Person..........................................................................41
Value ......................................................................................41
Voting Rights.................................................................................41
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SECTION PAGE
1.02. Allocation of Certain Interest Shortfalls.....................................................42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans..................................................................43
2.02. Acceptance of REMIC I by Trustee..............................................................45
2.03. Cure of Breaches; Repurchase or Substitution of Mortgage Loans................................46
2.04. Representations and Warranties of the Depositor...............................................48
2.05. Execution, Authentication and Delivery of Class R-I Certificates; Creation of
REMIC I Regular Interests.....................................................................50
2.06. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by Trustee....................50
2.07. Execution, Authentication and Delivery of REMIC II Certificates...............................51
2.08. Representations, Warranties and Covenants of the Master Servicer..............................51
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Master Servicer to Act as Master Servicer.....................................................54
3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers;
Enforcement of Sub-Servicing Agreements and the Mortgage Loan Purchase
Agreement.....................................................................................55
3.03. Successor Sub-Servicers.......................................................................57
3.04. Liability of the Master Servicer..............................................................57
3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders............................................................................57
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee..............................58
3.07. Collection of Certain Mortgage Loan Payments..................................................58
3.08. Sub-Servicing Accounts........................................................................59
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................59
3.10. Collection Account and Distribution Account...................................................60
3.11. Withdrawals from the Collection Account and Distribution Account..............................62
3.12. Investment of Funds in the Collection Account and the Distribution Account....................64
3.13. [intentionally omitted].......................................................................65
3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage................66
3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................67
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SECTION PAGE
3.16. Realization Upon Defaulted Mortgage Loans.....................................................68
3.17. Trustee to Cooperate; Release of Mortgage Files...............................................70
3.18. Servicing Compensation........................................................................71
3.19. Reports to the Trustee; Collection Account Statements.........................................72
3.20. Statement as to Compliance....................................................................72
3.21. Independent Public Accountants' Servicing Report..............................................72
3.22. Access to Certain Documentation...............................................................73
3.23. Title, Management and Disposition of REO Property.............................................73
3.24. Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls...............77
3.25. Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
Payments......................................................................................77
4.01. Distributions.................................................................................78
4.02. Statements to Certificateholders..............................................................83
4.03. Remittance Reports; Payment Advances..........................................................87
4.04. Allocation of Extraordinary Trust Fund Expenses and Realized Losses...........................88
4.05. Commission Reporting..........................................................................89
4.06. Compliance with Withholding Requirements......................................................90
ARTICLE V
THE CERTIFICATES
5.01. The Certificates..............................................................................91
5.02. Registration of Transfer and Exchange of Certificates.........................................93
5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................99
5.04. Persons Deemed Owners.........................................................................99
5.05. Certain Available Information................................................................100
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.01. Liability of the Depositor and the Master Servicer...........................................101
6.02. Merger or Consolidation of the Depositor or the Master Servicer..............................101
6.03. Limitation on Liability of the Depositor, the Master Servicer and Others.....................101
6.04. Limitation on Resignation of the Master Servicer.............................................102
6.05. Rights of the Depositor in Respect of the Master Servicer....................................103
ARTICLE VII
DEFAULT
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SECTION PAGE
7.01. Master Servicer Events of Default............................................................104
7.02. Trustee to Act; Appointment of Successor.....................................................106
7.03. Notification to Certificateholders...........................................................107
7.04. Waiver of Master Servicer Events of Default..................................................107
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee............................................................................109
8.02. Certain Matters Affecting the Trustee........................................................110
8.03. Trustee Not Liable for Certificates or Mortgage Loans........................................111
8.04. Trustee May Own Certificates.................................................................111
8.05. Trustee's Fees and Expenses..................................................................112
8.06. Eligibility Requirements for Trustee.........................................................112
8.07. Resignation and Removal of the Trustee.......................................................112
8.08. Successor Trustee............................................................................113
8.09. Merger or Consolidation of Trustee...........................................................114
8.10. Appointment of Co-Trustee or Separate Trustee................................................114
8.11. Appointment of Custodians....................................................................115
8.12. Appointment of Office or Agency..............................................................115
8.13. Representations and Warranties of the Trustee................................................116
ARTICLE IX
SPECIAL FORECLOSURE PROCEDURES
AT OPTION OF THE HOLDER OF THE MAJORITY
IN PERCENTAGE INTEREST IN THE CLASS B-4,
CLASS B-5 OR CLASS B-6 CERTIFICATES
9.01. General......................................................................................117
9.02. Reports and Notices..........................................................................118
9.03. Election to Delay Foreclosure Proceedings....................................................119
9.04. Election to Commence Foreclosure Proceedings.................................................121
9.05. Termination..................................................................................123
9.06. Collateral Account...........................................................................123
9.07. Collateral Account Permitted Investments.....................................................124
9.08. Grant of Security Interest...................................................................124
9.09. Collateral Shortfalls........................................................................125
ARTICLE X
TERMINATION
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SECTION PAGE
10.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................126
10.02. Additional Termination Requirements..........................................................128
ARTICLE XI
REMIC PROVISIONS
11.01. REMIC Administration.........................................................................129
11.02. Prohibited Transactions and Activities.......................................................132
11.03. Master Servicer and Trustee Indemnification..................................................132
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Amendment....................................................................................133
12.02. Recordation of Agreement; Counterparts.......................................................134
12.03. Limitation on Rights of Certificateholders...................................................134
12.04. Governing Law................................................................................135
12.05. Notices......................................................................................135
12.06. Severability of Provisions...................................................................136
12.07. Notice to Rating Agencies....................................................................136
12.08. Article and Section References...............................................................137
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EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class XS Certificate
Exhibit A-4 Form of Class PO Certificate
Exhibit A-5 Form of Class B-1 Certificate
Exhibit A-6 Form of Class B-2 Certificate
Exhibit A-7 Form of Class B-3 Certificate
Exhibit A-8 Form of Class B-4 Certificate
Exhibit A-9 Form of Class B-5 Certificate
Exhibit A-10 Form of Class B-6 Certificate
Exhibit A-11 Form of Class R-I Certificate
Exhibit A-12 Form of Class R-II Certificate
Exhibit B [Reserved]
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Final Certification
Exhibit D Form of Mortgage Loan Purchase Agreement
Exhibit E Request for Release
Exhibit F-1 Form of Transferor Certificate
Exhibit F-2A Form I of Transferee Certificate
Exhibit F-2B Form II of Transferee Certificate
Exhibit F-3 Form of Transfer Certificate in Connection with ERISA
Exhibit G-1 File Layout for Master Servicer Remittance Report to
Trustee
Exhibit H-1 Form of Transfer Affidavit and Agreement for Transfer
of Residual Certificates
Exhibit H-2 Form of Transferor Certificate for Transfers of
Residual Certificates
Schedule 1 Mortgage Loan Schedule with respect to Sub-Pool 1
Schedule 2 Mortgage Loan Schedule with respect to Sub-Pool 2
This Pooling and Servicing Agreement, is dated and effective
as of June 1, 1998, among Salomon Brothers Mortgage Securities VII, Inc., as
Depositor, Wilshire Servicing Corporation, as Master Servicer and Bankers Trust
Company, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell the Certificates, to be issued
hereunder in multiple classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Trust Fund created hereunder.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a REMIC (as defined herein) for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." The Class R-I Certificates will be issued with an
initial Certificate Principal Balance of $100.00 and will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein).
The following table irrevocably sets forth the designation,
the REMIC I Remittance Rate, the initial Uncertificated Balance and, solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
latest possible maturity date for each of the REMIC I Regular Interests. None of
the REMIC I Regular Interests will be certificated.
REMIC I Initial Uncertificated Latest Possible
Designation Remittance Rate Balance Maturity Date (3)
----------- --------------- ------- -----------------
A-1 Variable(1) $104,182,170 May 25, 2037
A-2 Variable(1) $ 23,968,035 May 25, 2037
B-1 Variable(1) $ 9,293,000 May 25, 2037
B-2 Variable(1) $ 7,603,000 May 25, 2037
B-3 Variable(1) $ 5,069,000 May 25, 2037
B-4 Variable(1) $ 8,871,000 May 25, 2037
B-5 Variable(1) $ 2,534,000 May 25, 2037
B-6 Variable(1) $ 7,181,287 May 25, 2037
PO N/A(2) $ 258,895 May 25, 2037
----------------------
(1) Calculated in accordance with the definition of "REMIC I Remittance Rate."
(2) REMIC I Regular Interest PO does not accrue interest.
(3) Designated as the first Distribution Date following the stated maturity date
of the Mortgage Loan with the longest remaining term to scheduled maturity.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Certificates will be issued with an
initial Certificate Principal Balance of $100.00 and will be the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial Class Certificate Balance and,
solely for purposes of satisfying Treasury regulation Section
-2-
1.860G-1(a)(4)(iii), the latest possible maturity date for each of the Classes
of Certificates or Components thereof representing "regular interests" in REMIC
II.
Class Pass-Through Initial Class Latest Possible
Designation Rate Certificate Balance Maturity Date(6)
----------- ------ ------------------- ----------------
Component A1-XS(1) 1.29% per annum N/A(5) May 25, 2037
Component A2-XS(1) Variable(2) N/A(5) May 25, 2037
Component B1-XS(1) 0.875% per annum N/A(5) May 25, 2037
Component B2-XS(1) 0.875% per annum N/A(5) May 25, 2037
Component B3-XS(1) 0.60% per annum N/A(5) May 25, 2037
Class A-1 Variable(2) $104,182,070 May 25, 2037
Class A-2 6.50% per annum(3) $23,968,035 May 25, 2037
Class B-1 Variable(2) $9,293,000 May 25, 2037
Class B-2 Variable(2) $7,603,000 May 25, 2037
Class B-3 Variable(2) $5,069,000 May 25, 2037
Class B-4 Variable(2) $8,871,000 May 25, 2037
Class B-5 Variable(2) $2,534,000 May 25, 2037
Class B-6 Variable(2) $7,181,287 May 25, 2037
Class PO N/A(4) $258,895 May 25, 2037
---------------------------------
(1) Constitutes a separate "regular interest" in REMIC II represented by the
Class XS Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate."
(3) Subject to reduction as set forth herein in the definition of "Pass-Through
Rate."
(4) The Class PO Certificates are not entitled to distributions of interest.
(5) Component A1-XS, Component A2-XS, Component B1-XS, Component B2-XS and
Component B3-XS will not have stated amounts. Rather each will accrue
interest as provided herein on a Component Notional Amount equal to: (i) in
the case of Component A1-XS, the Uncertificated Balance of REMIC I Regular
Interest A-1 outstanding from time to time; (ii) in the case of Component
A2-XS, the Uncertificated Balance of REMIC I Regular Interest A-2
outstanding from time to time; (iii) in the case of Component B1-XS, the
Uncertificated Balance of REMIC I Regular Interest B-1 outstanding from time
to time; (iv) in the case of Component B2-XS, the Uncertificated Balance of
REMIC I Regular Interest B-2 outstanding from time to time and (v) in the
case of Component B3-XS, the Uncertificated Balance of REMIC I Regular
Interest B-3 outstanding from time to time.
(6) Designated as the first Distribution Date following the stated maturity date
of the Mortgage Loan with the longest remaining term to scheduled maturity.
-3-
As of the Cut-off Date, the Original Sub-Pool 1 Loans had an
aggregate Scheduled Principal Balance equal to $144,733,556.89. As of the
Cut-off Date, the Original Sub-Pool 2 Loans had an aggregate Scheduled Principal
Balance equal to $24,226,930.28.
Capitalized terms used but not otherwise defined in this
Preliminary Statement, have the meanings assigned thereto in Article I.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accrued Certificate Interest": With respect to any Class of
P&I Certificates for any Distribution Date, one month's interest at the
Pass-Through Rate applicable to such Class of Certificates for such Distribution
Date, accrued on the related Class Certificate Balance outstanding immediately
prior to such Distribution Date. With respect to the Class XS Certificates for
any Distribution Date, the aggregate of: (i) one month's interest at the
Pass-Through Rate applicable to Component A1-XS for such Distribution Date,
accrued on the Component Notional Amount of Component A1-XS outstanding
immediately prior to such Distribution Date; (ii) one month's interest at the
Pass-Through Rate applicable to Component A2-XS for such Distribution Date,
accrued on the Component Notional Amount of Component A2-XS outstanding
immediately prior to such Distribution Date; (iii) one month's interest at the
Pass-Through Rate applicable to Component B1-XS for such Distribution Date,
accrued on the Component Notional Amount of Component B1-XS outstanding
immediately prior to such Distribution Date; (iv) one month's interest at the
Pass-Through Rate applicable to Component B2-XS for such Distribution Date,
accrued on the Component Notional Amount of Component B2-XS outstanding
immediately prior to such Distribution Date and (v) one month's interest at the
Pass-Through Rate applicable to Component B3-XS for such Distribution Date,
accrued on the Component Notional Amount of Component B3-XS outstanding
immediately prior to such Distribution Date. Accrued Certificate Interest for
each Class of REMIC II Regular Certificates (other than the Class PO
Certificates) shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Accrued Certificate Interest with respect to each
Distribution Date, as to any Class of REMIC II Regular Certificates (other than
the Class PO Certificates), shall be reduced by an amount equal to the portion
allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to the extent not covered by payments pursuant to Section 3.24 and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date.
"Adjustment Date": With respect to each Mortgage Loan in
Sub-Pool 1, the first day of the month on which the Mortgage Rate of a Mortgage
Loan in Sub-Pool 1 changes pursuant to the related Mortgage Note. The first
Adjustment Date following the Cut-off Date as to each Mortgage Loan in Sub-Pool
1 is set forth in the Mortgage Loan Schedule.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this
-5-
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 Subordinate Percentage": With respect to each
Distribution Date, the lesser of (i) 100% and (ii) the percentage equal to the
aggregate Certificate Principal Balances of the Subordinate Certificates
immediately prior to such Distribution Date divided by the aggregate of the
Scheduled Principal Balance of each of the Mortgage Loans in both Sub-Pools
immediately prior to such Distribution Date.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Bankruptcy Amount": As of any date of determination, an
amount equal to the excess, if any, of (A) $50,000, over (B) the aggregate
amount of Bankruptcy Losses allocated to the Subordinate Certificates in
accordance with Section 4.04.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": The Senior P&I Certificates, the
Class B-1 Certificates, the Class B-2 Certificates and the Class B-3
Certificates for so long as the Certificates of such Classes shall be registered
in the name of the Depository or its nominee.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"BPO": With respect to each Mortgaged Property relating to a
Mortgage Loan, the drive-by valuation (I.E., the interior of the property is
generally not inspected) prepared by a real estate broker in the community in
which such Mortgaged Property is located who is independent of the Seller,
Master Servicer and their Affiliates, which valuation indicates the expected
proceeds of a sale of such Mortgaged Property on an "as is" basis based upon a
normal marketing time for similar types of Mortgaged Properties in similar
areas, and includes certain assumptions, including those as to the condition of
the interior of the applicable Mortgaged Property.
"Business Day": Any day other than (i) a Saturday or Sunday,
(ii) a day on which the Depository is authorized or obligated by law or
executive order to remain closed, (iii) a day
-6-
on which the banking or savings and loan institutions in the State of New York
or the State of Oregon, or in the city in which the Corporate Trust Office of
the Trustee is located, are authorized or obligated by law or executive order to
be closed or (iv) a day on which the Master Servicer, the Trustee or the
Certificate Registrar is authorized or obligated by law or executive order to be
closed.
"Certificate": Any one of the Depositor's Mortgage
Pass-Through Certificates, Series 1998-WFC1, Class A-1, Class A-2, Class XS,
Class PO, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6,
Class R-I or Class R-II, issued under this Agreement.
"Certificate Balance": With respect to each Certificate (other
than the Class XS Certificates) as of any date of determination, the Certificate
Balance of such Certificate on the Distribution Date immediately prior to such
date of determination, minus all distributions allocable to principal made
thereon and Realized Losses and Extraordinary Trust Fund Expenses allocated
thereto on the immediately preceding Distribution Date (or, in the case of any
date of determination up to and including the first Distribution Date, the
initial Certificate Balance of such Certificate, as stated on the face thereof).
Notwithstanding the foregoing, the Certificate Balance of the most subordinate
Class of Certificate outstanding as of any date of determination shall equal,
the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans immediately following such date of determination over (b) the sum
of the aggregate Certificate Balances of the other classes of Certificates
(other than the Class XS Certificates) as of such date of determination.
"Certificate Factor": With respect to any Class of REMIC II
Regular Certificates as of any Distribution Date, a fraction, expressed as a
decimal carried to six places, the numerator of which is the Class Certificate
Balance or Class Notional Amount, as applicable, of such Class of Certificates
on such Distribution Date (after giving effect to any distributions of principal
and allocations of Realized Losses and Extraordinary Trust Fund Expenses in
reduction of the Class Principal Balance or Class Notional Amount, as
applicable, of such Class of Certificates to be made on such Distribution Date),
and the denominator of which is the Initial Class Certificate Balance or Class
Notional Amount, as applicable, of such Class of Certificates as of the Closing
Date.
"Certificate Notional Amount": The hypothetical or notional
principal amount on which a Class XS Certificate accrues interest equal to the
product of (a) the Percentage Interest evidenced by such Certificate, multiplied
by (b) the Class Notional Amount of the Class XS Certificates outstanding from
time to time.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which
a Depository Participant acts as agent.
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"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 12.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class A-1 Percentage": With respect to any Distribution Date,
the lesser of (a) 100% and (b) a fraction, expressed as a percentage, the
numerator of which is the excess, if any, of the aggregate Certificate Principal
Balance of the Class A-1 Certificates and Residual Certificates for such
Distribution Date (plus any Class A-2 Cross-Collateralization Entitlement Amount
or Class PO Cross-Collateralization Entitlement Amount) minus the aggregate
amount, if any, payable to the Holders of the Class A-1 Certificates and the
Residual Certificates on such date pursuant to clause (d) of the definition of
"Class A-1 Principal Distribution Amount," and the denominator of which is the
sum of (i) the aggregate of the Scheduled Principal Balance of each of the
Mortgage Loans in Sub-Pool 1, plus (ii) the aggregate of the Scheduled Principal
Balance of each of the REO Properties in Sub-Pool 1, in each case before
reduction for any Realized Losses on the Mortgage Loans in Sub-Pool 1 on such
Distribution Date.
"Class A-1 Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
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Distribution Date Senior Prepayment Percentage
------------------------------------------------- --------------------------------------------------------------
July 1998 through June 2008 100%
July 2008 through June 2009 Class A-1 Percentage, plus 70% of the Subordinate
Percentage
July 2009 through June 2010 Class A-1 Percentage, plus 60% of the Subordinate
Percentage
July 2010 through June 2011 Class A-1 Percentage, plus 40% of the Subordinate
Percentage
July 2011 through June 2012 Class A-1 Percentage, plus 20% of the Subordinate
Percentage
July 2012 and thereafter Class A-1 Percentage;
provided, however, no reduction to the Class A-1 Prepayment Percentage described
above shall be made as of any Distribution Date unless (i) the outstanding
principal balance of Mortgage Loans delinquent 60 days or more (including REO
Properties and Mortgage Loans in foreclosure) averaged over the last three
months does not exceed 8% of the average outstanding principal balance of all
the Mortgage Loans and (ii) aggregate Realized Losses on the Mortgage Loans in
Sub-Pool 1 and Sub-Pool 2 to date are less than the then applicable Trigger
Amount. The "Trigger Amount" for any Distribution Date occurring after the first
ten years will be as follows: for any Distribution Date during the eleventh year
after the Closing Date, 25% of the initial sum of the Certificate Principal
Balances of the Subordinate Certificates; for any Distribution Date during the
twelfth year after the Closing Date, 28% of the initial sum of the Certificate
Principal Balances of the Subordinate Certificates; for any Distribution Date
during the thirteenth year after the Closing Date, 30% of the initial sum of the
Certificate Principal Balances of the Subordinate Certificates; for any
Distribution Date during the fourteenth year after the Closing Date, 35% of the
initial sum of the Certificate Principal Balances of the Subordinate
Certificates; and for any Distribution Date during the fifteenth year (or any
year thereafter) after the Closing Date, 40% of the initial sum of the
Certificate Principal Balances of the Subordinate Certificates. Notwithstanding
the foregoing, upon a reduction of the Certificate Principal Balances of the
Class A-1 Certificates to zero, the Class A-1 Prepayment Percentage will equal
0%. In addition, on any Distribution Date on which the Class A-1 Percentage
exceeds the initial Class A-1 Percentage, the Class A-1 Prepayment Percentage
shall be 100%.
Notwithstanding the above, if on any Distribution Date, (a) the
Aggregate Subordinate Percentage equals at least twice the initial Aggregate
Subordinate Percentage, (b) aggregate Realized Losses on the Mortgage Loans up
to such Distribution Date have not exceeded the following amounts: up to and
including month 12, 6%; month 13 up to and including month 36, 10%; month 37 up
to and including month 60, 16%; month 61 up to and including month 84, 22%; and
month 85 up to and including month 120, 25%, in each case of the initial
Certificate Principal Balances of the Subordinate Certificates, (c) aggregate
Realized Losses on the Mortgage
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Loans during the immediately preceding 12 month period have not exceeded the
product of (I) 1.20% multiplied by (II) the principal balance of the Mortgage
Loans as of the Cut-off Date and (d) over the prior 3 months, the average
aggregate outstanding principal balance of Mortgage Loans delinquent 60 days or
more (including for this purpose any Mortgage Loans in foreclosure and Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust Fund) has not exceeded 8% of the average aggregate outstanding
principal balance of all Mortgage Loans, then the Class A-1 Prepayment
Percentage for such Distribution Date will be reduced as follows: as to any such
Distribution Date prior to the third anniversary of the first Distribution Date,
the related Class A-1 Prepayment Percentage for such Distribution Date will be
equal to the sum of (i) the Class A-1 Percentage for such Distribution Date and
(ii) 50% of the Subordinate Percentage for such Distribution Date; as to any
such Distribution Date on or after the third anniversary of the first
Distribution Date, the Class A-1 Prepayment Percentage will be equal to the
Class A-1 Percentage for such Distribution Date. The test described in this
paragraph shall be recalculated on every Distribution Date prior to the
Distribution Date in July 2008 and to the extent any of the tests in clauses
(a)-(d) above are not satisfied, the Class A-1 Prepayment Percentage shall be
100% prior to the Distribution Date in July 2008.
"Class A-1 Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:
(a) the product of (x) the then-applicable Class A-1
Percentage and (y) the sum of the following:
(i) the aggregate of the principal portions of all
Monthly Payments due during the related Due Period in respect
of the Mortgage Loans in Sub-Pool 1 whether or not received;
(ii) the principal portion of all Insurance Proceeds and
Liquidation Proceeds (other than amounts described in clause
(c) below) received in respect of the Mortgage Loans in
Sub-Pool 1 during the related Prepayment Period (other than
any such Mortgage Loan that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01 during the related Prepayment Period),
net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer
pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the Stated Principal Balance (calculated
immediately prior to such Distribution Date) of each Mortgage
Loan in Sub-Pool 1 that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 10.01 during the related Prepayment Period;
(iv) all REO Principal Amortization collected in respect
of any REO Property in Sub-Pool 1 during the related
Prepayment Period; and
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(v) in connection with the substitution of one or more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans in Sub-Pool 1 pursuant to Section 2.03 during
the related Prepayment Period, the excess, if any, of (A) the
aggregate of the Stated Principal Balances (calculated as of
the respective dates of substitution) of such Deleted Mortgage
Loans, net of the aggregate of the principal portions of the
Monthly Payments due during the related Prepayment Period (to
the extent received from the related Mortgagor or advanced by
either Master Servicer and distributed pursuant to Section
4.01 on the Distribution Date in the related Prepayment
Period) in respect of each such Deleted Mortgage Loan that was
replaced prior to the Distribution Date in the related
Prepayment Period, over (B) the Stated Principal Balances
(calculated as of the respective dates of substitution) of
such Qualified Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Class A-1
Prepayment Percentage and (y) all Principal Prepayments received in
respect of the Mortgage Loans in Sub-Pool 1
during the related Prepayment Period;
(c) with respect to any Mortgage Loan in Sub-Pool 1 which was
the subject of a Final Recovery Determination in the related Prepayment
Period, the lesser of (a) the then-applicable Class A-1 Prepayment
Percentage of the net Liquidation Proceeds and Insurance Proceeds
allocable to principal in respect of such Mortgage Loan, and (b) the
then-applicable Class A-1 Percentage of the Scheduled Principal Balance
of such Mortgage Loan at the time of such Final Recovery Determination;
and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Class A-1 Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Class A-1 Certificates on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
which were allocated to the Subordinate Certificates pursuant to
Section 4.04; reduced by
(e) to the extent of any Class A-2 Cross-Collateralization
Entitlement Amount or Class PO Cross-Collateralization Entitlement
Amount, the amount payable in respect of each such entitlement which
shall be determined on a PRO RATA basis based on the Certificate
Balance of the Class A-1 Certificates, on the one-hand, and the Class
A-2 Cross-Collateralization Entitlement Amount and Class PO
Cross-Collateralization
Entitlement Amount, on the other hand.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
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"Class A-2 Cross-Collateralization Entitlement Amount": The
amount payable to the Class A-2 Certificates from Sub-Pool 1 in respect of
Realized Losses on the Mortgage Loans in Sub-Pool 2 which amount equals the
excess, if any, of clause (B)(i) of the definition of "Class A-2 Principal
Distribution Amount" over clause (B)(ii) thereof reduced by (a) amounts
previously paid in respect thereof and (b) Realized Losses applied to the Class
B-6 Certificates to the extent of the Class B-6 Certificates entitlement in
Sub-Pool 2 after a Prepayment Diversion Event.
"Class A-2 Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of (A) Non-PO Percentage of any
payments received in respect of principal on the Mortgage Loans in Sub-Pool 2,
other than in connection with a Final Recovery Determination, (B) with respect
to any Mortgage Loan in Sub-Pool 2 that was the subject of a Final Recovery
Determination in the related Prepayment Period, the lesser of (i) the Non-PO
Percentage of the then Scheduled Principal Balance of such Mortgage Loan and
(ii) the principal portion of all amounts collected in connection with such
final liquidation to the extent not distributed to the Class PO Certificates and
(C) amounts payable to the Class A-2 Certificates from Sub-Pool 1 as provided in
clause (e) of the definition of "Class A-1 Principal Distribution Amount".
"Class B Certificate": Any one of the Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 or Class B-6 Certificates.
"Class B Percentage": With respect to any Distribution Date,
the lesser of (a) 100% and (b) a fraction, expressed as a percentage, the
numerator of which is the aggregate Certificate Balance of the Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates, Class B-5 Certificates or Class B-6 Certificates, as applicable,
and the denominator of which is the sum of the aggregate of the Certificate
Balances of the Class B Certificates of each Class.
"Class B-1 Certificate": Any one of the Class B-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-2 Certificate": Any one of the Class B-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-3 Certificate": Any one of the Class B-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-4 Certificate": Any one of the Class B-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form
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annexed hereto as Exhibit A-8 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class B-5 Certificate": Any one of the Class B-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class B-6 Certificate": Any one of the Class B-6 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class Certificate Balance": The aggregate Certificate Balance
of any Class of REMIC II Regular Certificates outstanding as of any date of
determination. As of the Closing Date, the Class Certificate Balance of each
such Class of Certificates shall equal the Initial Class Certificate Balance
thereof. On each Distribution Date, the Class Certificate Balance of each such
Class of Certificates shall be reduced by the amount of any distributions of
principal made thereon on such Distribution Date pursuant to Section 4.01(a) or
Section 10.01, as applicable, and if and to the extent necessary and
appropriate, shall be further reduced on such Distribution Date as provided in
Section 4.04(a).
"Class Notional Amount": With respect to the Class XS
Certificates and any Distribution Date, the aggregate Certificate Notional
Amount on which the Class XS Certificates accrue interest from time to time,
which, as of any date of determination is equal to the aggregate of the
Component Notional Amounts for Component A1-XS, Component A2-XS, Component B1-
XS, Component B2-XS and Component B3-XS then outstanding (such interest accruing
at the related Pass-Through Rate on the applicable Component Notional Amount) as
of such date of determination.
"Class PO Certificate": Any one of the Class PO Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
"Class PO Cross-Collateralization Entitlement Amount": The
amount payable to the Class PO Certificates from Sub-Pool 1 in respect of
Realized Losses on the Mortgage Loans in Sub-Pool 2 which amount equals any
shortfall in the payment of the amount in clause (B) of the definition of "Class
PO Principal Distribution Amount" reduced by (a) amounts previously paid in
respect thereof and (b) Realized Losses applied to the Class B-6 Certificates to
the extent of the Class B-6 Certificates entitlement in Sub-Pool 2 after a
Prepayment Diversion Event.
"Class PO Principal Distribution Amount": For any Distribution
Date, an amount equal to the sum of (A) the PO Percentage of any payments
received in respect of principal on the
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Mortgage Loans in Sub-Pool 2, other than in connection with a Final Recovery
Determination, (B) with respect to any Mortgage Loan in Sub-Pool 2 that was the
subject of a Final Recovery Determination in the related Prepayment Period, the
PO Percentage of the then Scheduled Principal Balance of such Mortgage Loan and
(C) amounts payable to the Class PO Certificates from Sub-Pool 1 as provided in
clause (e) of the definition of "Class A-1 Principal Distribution Amount".
"Class R-I Certificate": Any one of the Certificates with a
"Class R-I" designation on the face thereof, substantially in the form of
Exhibit A-11 attached hereto, and evidencing the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates with a
"Class R-II" designation on the face thereof, substantially in the form of
Exhibit A-12 attached hereto, and evidencing the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions.
"Class XS Certificate": Any one of the Class XS Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing five separate Regular Interests in REMIC II for purposes of the REMIC
Provisions.
"Closing Date": June 26, 1998.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Wilshire Servicing Corporation, as Master Servicer for the benefit of
the registered holders of Salomon Brothers Mortgage Securities VII, Inc.,
Mortgage Pass-Through Certificates, Series 1998-WFC1." The Collection Account
must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Component": Any of the components of the partial beneficial
ownership interest evidenced by the Class XS Certificates in the Trust Fund,
designated as "Component A1-XS," "Component A2-XS," "Component B1-XS,"
"Component B2-XS" and "Component B3-XS," respectively, each such component
constituting a separate "regular interest" in REMIC II.
"Component Notional Amount": The hypothetical or notional
principal amount on which any of the Components of the Class XS Certificates
accrues interest equal to: (1) in the case of Component A1-XS, the
Uncertificated Balance of REMIC I Regular Interest A-1 outstanding from time to
time; (2) in the case of Component A2-XS, the Uncertificated Balance of REMIC I
Regular Interest A-2 outstanding from time to time; (3) in the case of Component
B1-XS, the Uncertificated Balance of REMIC I Regular Interest B-1 outstanding
from time to time; (4) in the case of Component B2-XS, the Uncertificated
Balance of REMIC I Regular Interest B-2
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outstanding from time to time and (5) in the case of Component B3-XS, the
Uncertificated Balance of REMIC I Regular Interest B-3 outstanding from time to
time.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 0 Xxxx Xxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, Attention: Salomon Brothers Mortgage Securities VII,
Inc., Mortgage Pass-Through Certificates, Series 1998-WFC1, (WM9801), or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor and the Master Servicer.
"Cross-Collateralization Event": Prior to the reduction of the
Certificate Balance of the Class B Certificates to zero, a Realized Loss on a
Mortgage Loan in Sub-Pool 2; other than to the extent such Realized Loss was
applied against the Class B-6 Certificate's entitlement from
Sub-Pool 2 after a Prepayment Diversion Event.
"Custodian": A Person who is at any time appointed by the
Trustee pursuant to Section 8.11 as a document custodian for the Mortgage Files,
which Person shall not be the Depositor, the Master Servicer, the Mortgage Loan
Seller or an Affiliate of any of them.
"Cut-off Date": With respect to each Original Mortgage Loan,
June 1, 1998. With respect to any Qualified Substitute Mortgage Loan, the date
of substitution. References herein to the "Cut-off Date," when used with respect
to more than one Mortgage Loan, shall be to the respective Cut-off Dates for
such Mortgage Loans.
"DCR": Duff & Xxxxxx Credit Rating Co. or its successor in
interest.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.
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"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated P-1 by Moody's and D-1 by
DCR (if rated by DCR) or comparable ratings if Moody's and DCR are not the
Rating Agencies.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately succeeding
such 15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust Fund other
than through an Independent Contractor; provided, however, that the Trustee (or
the Master Servicer on behalf of the Trustee) shall not be considered to
Directly Operate an REO Property solely because the Trustee (or the Master
Servicer on behalf of the Trustee) establishes rental terms, chooses tenants,
enters into or renews leases, deals with taxes and insurance, or makes decisions
as to repairs or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for the FHLMC, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person
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so designated by the Trustee based upon an Opinion of Counsel that the holding
of an Ownership Interest in a Residual Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Bankers Trust Company, as Trustee, in trust for registered holders of
Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1998-WFC1." The Distribution Account must be an Eligible
Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in July 1998.
"Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is
generally the day of the month on which the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the calendar month preceding the calendar
month in which such Distribution Date occurs and ending on the related Due Date.
"Effective Pass-Through Rate": With respect to the Class XS
Certificates for any Distribution Date, the rate per annum equal to the weighted
average, expressed as a percentage and rounded to four decimal places, of the
respective Pass-Through Rates for the five Components of such Class of
Certificates for such Distribution Date, weighted on the basis of the respective
Component Notional Amounts of such Components outstanding immediately prior to
such Distribution Date.
"Eligible Account": An account maintained with a federal or
state chartered depository institution (i) either the long term unsecured debt
obligations or short term unsecured debt obligations of which are rated "A1" or
"P-1," as applicable, by Moody's and "A+" or "D-1," as applicable, by DCR (if
rated by DCR) at the time of any deposit therein, or (ii) if such account is
insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee prior to the
establishment of such account, the Certificateholders will have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Instruments) securing such funds that is superior to claims of any other
depositors or general creditors of the depository institution with which such
account is maintained, or (iii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company in its
corporate trust department, or (iv) such
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other account as may be approved in writing by each Rating Agency. Eligible
Accounts may bear interest. In the event an account ceases to be an Eligible
Account, all funds contained therein shall be withdrawn by the Person charged
with maintenance of such account and redeposited into an Eligible Account within
five Business Days of such cessation of eligibility.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Bankruptcy Loss": With respect to either Sub-Pool, any
Bankruptcy Loss, or portion thereof, which exceeds the then applicable
Bankruptcy Amount.
"Excess Fraud Loss": With respect to either Sub-Pool, any
Fraud Loss, or portion thereof, which exceeds the then applicable Fraud Loss
Amount.
"Excess Loss": Any Excess Bankruptcy Loss, Excess Special
Hazard Loss, Excess Fraud Loss or Extraordinary Loss.
"Excess Special Hazard Loss": With respect to either Sub-Pool,
any Special Hazard Loss, or portion thereof, that exceeds the then applicable
Special Hazard Amount.
"Extraordinary Loss": Any Realized Loss or portion thereof
caused by or resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled
or uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual,
impending or expected attack by any government or sovereign
power, DE JURE or DE FACTO, or by any authority maintaining or
using military, naval or air forces, or by military, naval or
air forces, or by an agent of any such government, power,
authority or forces;
(iii) any weapon of war employing atomic fission or radioactive
forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power
or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations,
confiscation by order of any government or public authority,
or risks of contraband
or illegal transactions or trade.
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"Extraordinary Trust Fund Expenses": Any amounts reimbursable
to the Master Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
11.01(h)(iii), any amounts reimbursable to the Trustee by the Trust Fund
pursuant to the indemnification from the Trust Fund set forth in the second
sentence of Section 8.05, and any other costs, expenses, liabilities and losses
borne by the Trust Fund (exclusive of any cost, expense, liability or loss that
is specific to a particular Mortgage Loan or REO Property and is taken into
account in calculating a Realized Loss in respect thereof) for which the Trust
Fund has not and, in the reasonable good faith judgment of the Trustee shall
not, obtain reimbursement or indemnification from any other Person.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration of the United States
Department of Housing and Urban Development and any successor thereto.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Mortgage Loan Seller, the Depositor or the Master Servicer
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
10.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered as certified to the Trustee by a
Servicing Officer. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.
"FNMA": Federal National Mortgage Association or any successor
thereto.
"Fraud Loss": Any Realized Loss or portion thereof sustained
by reason of a default arising from intentional fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan.
"Fraud Loss Amount": With respect to the Mortgage Loans as of
any date of determination after the Cut-off Date, an amount equal to: (X) prior
to the first anniversary of the Cut-off Date, 3.00% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date (initially
$5,068,815) minus the aggregate amount of Fraud Losses on the Mortgage Loans in
such Sub-Pool allocated solely to the Subordinate Certificates in accordance
with Section 4.04 since the Cut-off Date up to such date of determination, (Y)
from the first to the second anniversary of the Cut-off Date, an amount equal to
(1) the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of
the Cut-off Date and (b) 2.00% of the aggregate outstanding principal balance of
the Mortgage Loans as of the most recent anniversary of the Cut-off Date minus
(2) the Fraud Losses on the Mortgage Loans in such Sub-Pool allocated solely to
the Subordinate Certificates in accordance with Section 4.04 since the most
recent anniversary of the Cut-off Date up to such date of determination and (Z)
from the second to the fifth anniversary of
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the Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount
as of the most recent anniversary of the Cut-off Date and (b) 1.00% of the
aggregate outstanding principal balance of the Mortgage Loans as of the most
recent anniversary of the Cut-off Date. On and after the fifth anniversary of
the Cut-off Date the Fraud Loss Amount shall be zero.
"Gross Margin": With respect to each Mortgage Loan in Sub-Pool 1,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Master Servicer
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
"Independent Contractor": Either (i) any Person (other than the
Master Servicer and its Affiliates) that would be an "independent contractor"
with respect to the Trust Fund within the meaning of Section 856(d)(3) of the
Code if the Trust Fund were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to be met by any
Person that owns, directly or indirectly, 35% or more of any Class of
Certificates), so long as the Trust Fund does not receive or derive any income
from such Person and provided that the relationship between such Person and the
Trust Fund is at arm's length, all within the meaning of Treasury Regulation
Section 1.856-4(b)(5), or (ii) any other Person (including the Master Servicer)
if the Trustee has received an Opinion of Counsel to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Mortgage Loan in Sub-Pool 1 and each
related Adjustment Date the weekly average yield on U.S. Treasury securities
adjusted to a constant maturity of one year as published by the Federal Reserve
Board in Statistical Release H.15(519) as of a date specified in the related
Mortgage Note.
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"Initial Class Certificate Balance": With respect to any Class of
REMIC II Regular Certificates, the initial Class Certificate Balance thereof as
of the Closing Date, in each case as specified in the Preliminary Statement.
"Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and any Certificate, the one-month period ending on the last day of the calendar
month preceding the month in which such Distribution Date occurs.
"Interest Distribution Amount": With respect to any Distribution
Date and any Class of REMIC II Regular Certificates (other than the Class PO
Certificates), the aggregate Accrued Certificate Interest on the Certificates of
such Class for such Distribution Date, plus the excess, if any, of the Interest
Distribution Amount for the immediately preceding Distribution Date, if any,
over the aggregate distributions of interest made with respect to such Class on
such immediately preceding Distribution Date.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any Due
Period, whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent for such Due Period
and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from the Trust Fund by reason of its being purchased
pursuant to Section 10.01.
"Liquidation Proceeds": The amount (other than Insurance Proceeds
or amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
10.01.
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"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"Master Servicer": Wilshire Servicing Corporation, a Delaware
Corporation, or any successor master servicer appointed as herein provided, in
its capacity as Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events
described in Section 7.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, 5:00 p.m., New York time, on the Business Day immediately
preceding the Distribution Date.
"Maximum Mortgage Rate": With respect to each Mortgage Loan in
Sub-Pool 1, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note as modified by any payment plan agreement, determined: (a) after giving
effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect
to such Mortgage Loan and (ii) any reduction in the amount of interest
collectible from the related Mortgagor pursuant to the Relief Act; (b) without
giving effect to any extension granted or agreed to by the Master Servicer
pursuant to Section 3.07; and (c) on the assumption that all other amounts, if
any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to
the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Mortgage Loan Seller and the Depositor, regarding the transfer of the Mortgage
Loans by the Mortgage Loan Seller to or at the direction of the Depositor,
substantially in the form of Exhibit D annexed hereto.
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"Mortgage Loan Schedule": The list of Mortgage Loans separately
identifying the Mortgage Loans included in each Sub-Pool on such date attached
hereto as Schedule 1 and Schedule 2 with respect to Sub-Pool 1 and Sub-Pool 2,
respectively. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:
(v) the Mortgage Loan identifying number, the Mortgagor's name and
the street address of the Mortgaged Property including the
state and zip code;
(vi) a code indicating whether the Mortgaged Property is
owner-occupied;
(vii) the months to maturity from modification;
(viii) the stated remaining months to maturity from the Cut-off Date;
(ix) the Loan-to-Value Ratio at modification;
(x) the Mortgage Rate in effect immediately following the Cut-off
Date;
(xi) the Mortgaged Property type;
(xii) the stated maturity date;
(xiii) the amount of the principal and interest payment at
origination;
(xiv) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
(xv) [intentionally omitted];
(xvi) the original principal amount of the Mortgage Loan (if
available);
(xvii) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xviii) [intentionally omitted];
(xix) [intentionally omitted];
(xx) in the case of each Mortgage Loan in Sub-Pool 1, the Gross
Margin;
(xxi) in the case of each Mortgage Loan in Sub-Pool 1, the Maximum
Mortgage Rate;
(xxii) in the case of each Mortgage Loan in Sub-Pool 1, the Periodic
Rate Cap;
(xxiii) in the case of each Mortgage Loan in Sub-Pool 1, the first
Adjustment Date immediately following the Cut-off Date; and
(xxiv) the Value of the Mortgaged Property.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date with respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current principal balance
of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average stated maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the
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Depositor in accordance with the provisions of this Agreement. With respect to
any Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.
"Mortgage Loan Seller": WMFC 1997-4 Inc., or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgage Pool": Collectively, all of the Mortgage Loans
identified on Schedule 1 and Schedule 2 from time to time, and any REO
Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Mortgage Loan in Sub-Pool 2, shall remain constant at the rate
set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect
immediately following the Cut-off Date and (ii) in the case of each Mortgage
Loan in Sub-Pool 1 (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded
as provided in the Mortgage Note, of the Index, as most recently available as of
a date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap and (ii) the related Maximum Mortgage Rate, and shall
never be less than the Mortgage Rate in effect immediately prior to the
Adjustment Date less the Periodic Rate Cap. With respect to each Mortgage Loan
that becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to (i) the then applicable Mortgage Rate for such Mortgage Loan
(or the related REO Property) minus (ii) the sum of (x) the Servicing Fee Rate
and (y) the Trustee's Fee Rate.
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"New Lease": Any lease of REO Property entered into on behalf
of the Trust Fund, including any lease renewed or extended on behalf of the
Trust Fund if the Trust Fund has the right to renegotiate the terms of such
lease.
"Non-PO Mortgage Loan": Each Mortgage Loan in Sub-Pool 2 with
a Net Mortgage Rate equal to or greater than 6.75% per annum.
"Non-PO Percentage": With respect to each Non-PO Mortgage
Loan, 100%. With respect to each PO Mortgage Loan, 100% less the PO Percentage.
"Nonrecoverable Payment Advance": Any Payment Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer (or
the Trustee if such party is required to make a Payment Advance pursuant to the
terms hereof), as certified in writing by a Servicing Officer to the Trustee,
will not or, in the case of a proposed Payment Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated) of the Master Servicer or the Mortgage Loan Seller, as
applicable.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried or in-house counsel for the Depositor or the
Master Servicer, in such form as is reasonably acceptable to the Trustee, except
that any opinion of counsel relating to (a) the qualification of the Trust Fund
as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
Independent counsel.
"Original Mortgage Loan": Any Original Sub-Pool 1 Loan or
Original Sub-Pool 2 Loan and, together, the "Original Mortgage Loans".
"Original Sub-Pool 1 Loan": Any of the Mortgage Loans included
in Sub-Pool 1 as of the Closing Date.
"Original Sub-Pool 2 Loan": Any of the Mortgage Loans included
in Sub-Pool 2 as of the Closing Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"P&I Certificates": Any Class A-1, Class A-2 or Class B
Certificates.
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"Pass-Through Rate": With respect to:
(i) Component A1-XS, for any Distribution Date, 1.29% per annum;
(ii) Component A2-XS, for any Distribution Date, the excess, if
any, of (A) the REMIC I Remittance Rate for REMIC I Regular
Interest A-2 for such Distribution Date over (B) the rate per
annum specified in clause (vii) below;
(iii) Component B1-XS, for any Distribution Date, 0.875% per annum;
(iv) Component B2-XS, for any Distribution Date, 0.875% per annum;
(v) Component B3-XS, for any Distribution Date, 0.60% per annum;
(vi) the Class A-1 Certificates, for any Distribution Date, a
variable rate equal to the excess, if any, of (A) the weighted
average of the Net Mortgage Rate for the Mortgage Loans in
Sub-Pool 1 for such Distribution Date over (B) the rate per
annum specified in clause (i) above;
(vii) the Class A-2 Certificates, for any Distribution Date, a fixed
rate equal to 6.50% per annum; provided, however, that if on
any Distribution Date (x) the Class A-2
Cross-Collateralization Entitlement Amount is greater than
zero and (y) the weighted average of the Net Mortgage Rate for
the Mortgage Loans in Sub-Pool 1 for such Distribution Date is
less than 6.00% per annum then the Pass-Through Rate on the
Class A-2 Certificates, to the extent of the Class A-2 Cross-
Collateralization Entitlement Amount, shall be reduced to the
weighted average of the Net Mortgage Rate for the Mortgage
Loans in Sub-Pool 1 for such Distribution Date;
(viii) the Class B-1 Certificates, for any Distribution Date, a
variable rate equal to the excess, if any, of (A) the weighted
average of the Net Mortgage Rate for the Mortgage Loans in
Sub-Pool 1 for such Distribution Date over (B) the rate per
annum specified in clause (iii) above;
(ix) the Class B-2 Certificates, for any Distribution Date, a
variable rate equal to the excess, if any, of (A) the weighted
average of the Net Mortgage Rate for the Mortgage Loans in
Sub-Pool 1 for such Distribution Date over (B) the rate per
annum specified in clause (iv) above;
(x) the Class B-3 Certificates, for any Distribution Date, a
variable rate equal to the excess, if any, of (A) the weighted
average of the Net Mortgage Rate for the Mortgage Loans in
Sub-Pool 1 for such Distribution Date over (B) the rate per
annum specified in clause (v) above;
(xi) the Class B-4 Certificates, for any Distribution Date, the
REMIC I Remittance Rate for such Distribution Date payable in
respect of REMIC I Regular Interest B-4;
(xii) the Class B-5 Certificates, for any Distribution Date, the
REMIC I Remittance Rate for such Distribution Date payable in
respect of REMIC I Regular Interest B-5;
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(xiii) the Class B-6 Certificates, for any Distribution Date, REMIC I
Remittance Rate for such Distribution Date payable in respect
of REMIC I Regular Interest B-6.
The Class PO Certificates shall have a Pass-Through Rate of 0% per annum and
shall not be entitled to any distributions of interest.
"Payment Advance": With respect to any Mortgage Loan or REO
Property and any Distribution Date, any advance made by the Master Servicer
pursuant to Section 4.03 or by the Trustee pursuant to Section 7.02.
"Percentage Interest": With respect to any REMIC II Regular
Certificate, the undivided percentage ownership in the Class evidenced by such
Certificate, expressed as a percentage, the numerator of which is the initial
Certificate Balance or Certificate Notional Amount, as applicable, represented
by such Certificate and the denominator of which is the aggregate initial
Certificate Balance or Certificate Notional Amount, as applicable, of all of the
Certificates of such Class. The Book-Entry Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Balances $10,000 and increments of $1.00 in excess thereof. The Class XS
Certificates, the Class PO Certificates, the Class B-4 Certificates, the Class
B-5 Certificates and the Class B-6 Certificates will be issuable only in minimum
Percentage Interests corresponding to minimum initial Certificate Notional
Amounts (in the case of the Class XS Certificates) or initial Certificate
Balances (in the case of the Class PO Certificates, the Class B-4 Certificates,
the Class B-5 Certificates and the Class B-6 Certificates) of $10,000 and
integral multiples of $1,000 in excess thereof, except that one Certificate of
each such Class may be issued evidencing a Percentage Interest corresponding to
either (i) the sum of an otherwise authorized denomination thereof plus the
remainder of the aggregate initial Certificate Notional Amount or Certificate
Balance, as applicable, for such class or (ii) such remainder. The Class R-I
Certificates and Class R-II Certificates are issuable only in Percentage
Interests corresponding to initial Certificate Principal balances of $20 and
integral multiples thereof.
"Periodic Rate Cap": With respect to each Mortgage Loan in
Sub-Pool 1 and any Adjustment Date therefor, the fixed percentage set forth in
the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect
immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
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(ii) demand and time deposits in, certificates of
deposit of, or bankers' acceptances issued by, any Depository
Institution;
(iii) repurchase obligations with respect to any
security described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the laws
of the United States of America or any State thereof and that are rated
by each Rating Agency in its highest long-term unsecured rating
category at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than 30
days after the date of acquisition thereof) that is rated by each
Rating Agency in its highest short-term unsecured debt rating category
at the time of such investment;
(vi) units of money market funds that have been rated
"Aaa" by Moody's and "AAA" by DCR (if rated by DCR); and
(viii) if previously confirmed in writing to the
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of any Class of Senior
P&I Certificates;
provided that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan": Any employee benefit plan and certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Xxxxx plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to the prohibited transaction and fiduciary responsibility
provisions of ERISA and Section 4975 of the Code.
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"Plurality Residual Certificateholder": As to any taxable year
of REMIC I or REMIC II, the Holder of Certificates evidencing the largest
Percentage Interest in the Class of Residual Certificates constituting the sole
class of "residual interests" in such REMIC.
"PO Mortgage Loan": Each Mortgage Loan in Sub-Pool 2 with a
Net Mortgage Rate below 6.50% per annum.
"PO Percentage": With respect to each PO Mortgage Loan, the
quotient expressed as a percentage (but not less than 0%) of (i) 6.50% per annum
minus the related Net Mortgage Rate divided by (ii) 6.50% per annum. With
respect to each Non-PO Mortgage Loan, 0%.
"Prepayment Assumption": A prepayment rate for the Mortgage
Loans in Sub-Pool 1 of 15% CPR and a prepayment rate for the Mortgage Loans in
Sub-Pool 2 of 10% CPR. The Constant Prepayment Rate ("CPR") model assumes that
the outstanding principal balance of a pool of mortgage loans prepays at a
specified constant annual rate or CPR. In generating monthly cash flows, this
rate is converted to an equivalent constant monthly rate.
"Prepayment Diversion Event": As defined in Section 4.01(c).
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full or in part that was applied
by the Master Servicer to reduce the outstanding principal balance of such loan
on a date preceding the Due Date in the succeeding Prepayment Period, an amount
equal to interest at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the related Prepayment
Period. The obligations of the Master Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the immediately preceding calendar month.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 10.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of: (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 10.01); (ii) in the case of (x) a Mortgage Loan, accrued
interest on the Stated Principal Balance thereof at the applicable Net Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor,
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which payment had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected, and (y) an REO Property, the sum of (1) accrued interest on the
Stated Principal Balance thereof at the applicable Net Mortgage Rate in effect
from time to time from the Due Date as to which interest was last covered by a
payment by the Mortgagor through the end of the calendar month immediately
preceding the calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month commencing
with the calendar month in which such REO Property was acquired and ending with
the calendar month in which such purchase is to be effected, minus the total of
all net rental income, Insurance Proceeds, Liquidation Proceeds and Payment
Advances that had as of the date of purchase been distributed as or to cover REO
Imputed Interest pursuant to Section 4.01; (iii) any unreimbursed Servicing
Advances and Payment Advances and any unpaid Servicing Fees and Trustee Fees
allocable to such Mortgage Loan or REO Property; (iv) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan or REO
Property pursuant to Section 3.11(a)(ix) and Section 3.16(b); and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due in the month of substitution, not in excess of (and not more than $10,000
less than) the outstanding principal balance, after deduction of all scheduled
payments due as of the date of substitution, of the Deleted Mortgage Loan, (ii)
have a Mortgage Rate not less than (and not more than one percentage point in
excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) have a Net
Mortgage Rate not less than (and not more than one percentage point in excess
of) the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (v) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, and (vii) conform to each representation and
warranty set forth in the Mortgage Loan Purchase Agreement applicable to the
Deleted Mortgage Loan, and with respect to the substitution of any Mortgage Loan
in Sub-Pool 1, such mortgage loan must, (viii) have a Maximum Mortgage Rate not
less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (ix) have a
Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (x) have
the same Index as the Deleted Mortgage Loan, and (xi) have a next Adjustment
Date not more than two months later than the next Adjustment Date on the Deleted
Mortgage Loan. In the event that one or more mortgage loans are substituted for
one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof
shall be determined on the basis of aggregate principal balances, the Mortgage
Rates described in clauses (ii), (iii) and (viii) hereof shall be determined on
the basis of weighted average Mortgage Rates, the term described in clause (iv)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratios described in clause (vi) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations
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and warranties described in clause (vii) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
"Rating Agency or Rating Agencies": Xxxxx'x and DCR or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and Master Servicer.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued and unpaid interest from the Due Date as to which
interest was last paid by the Mortgagor through the end of the calendar month in
which such Final Recovery Determination was made, calculated in the case of each
calendar month during such period (A) at an annual rate equal to the annual rate
at which interest was then accruing on such Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of such Mortgage Loan as of the
close of business on the Distribution Date during such calendar month, plus
(iii) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(iv) the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.11(a)(iii).
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the Trust Fund, plus (ii) accrued
and unpaid interest from the Due Date as to which interest was last paid by the
Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during such
period (A) at an annual rate equal to the annual rate at which interest was then
accruing on the related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) REO
Imputed Interest for such REO Property for each calendar month commencing with
the calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all Payment Advances made by the Master Servicer in respect
of such REO Property or the related Mortgage Loan for which the Master Servicer
has been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection
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with such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.23.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected
Monthly Payment.
"Record Date": With respect to each Distribution Date, the
last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase Agreement (including any security interests created
thereby and excluding Section 12 thereof ) and (v) the Collection Account, the
Distribution Account and any REO Account and such assets that are deposited
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto. Notwithstanding the
foregoing, however, REMIC I specifically excludes all payments and other
collections of principal and interest due on the Mortgage Loans on or before the
Cut-off Date.
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"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest,
other than REMIC I Regular Interest PO, shall accrue interest at the related
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto. The designations for the respective REMIC I
Regular Interests are set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest (other than REMIC I Regular Interest PO) for any Distribution Date, a
rate per annum equal to (i) the weighted average, expressed as a percentage of
the Net Mortgage Rates on the Mortgage Loans in Sub-Pool 1 with respect to each
REMIC I Regular Interest (other than REMIC I Regular Interest A- 2) and the
weighted average, expressed as a percentage, of the Net Mortgage Rates on the
Mortgage Loans in Sub-Pool 2 (assuming the Net Mortgage Rate for each PO
Mortgage Loan equals 6.50% per annum) with respect to REMIC I Regular Interest
A-2; provided, however, that to the extent of the Class A-2
Cross-Collaterlization Entitlement Amount, the REMIC I Remittance Rate for REMIC
I Regular Interest A-2 shall equal the weighted average of the Net Mortgage
Rates on the Mortgage Loans in Sub-Pool 1. REMIC I Regular Interest PO shall not
be entitled to distributions of interest.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit
of the Holders of the REMIC II Certificates pursuant to Section 2.08, with
respect to which a separate REMIC election is to be made.
"REMIC II Certificate": Any Class A-1, Class A-2, Class XS,
Class PO, Class B- 1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6 or
Class R-II Certificate.
"REMIC II Regular Certificate": Any REMIC II Certificate other
than a Class R-II Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"Remittance Report": A report in electronic format
substantially in the form attached hereto as Exhibit G-1 prepared by the Master
Servicer pursuant to Section 4.03 with such additions, deletions and
modifications as agreed to by the Trustee and the Master Servicer.
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"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan if appropriate) as of the close of
business on the Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Payment Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a FNMA eligible condominium project, or (iv)
a detached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (as defined in 00 Xxxxxx Xxxxxx Code,
Section 5402(6)).
"Residual Certificate": A Class R-I or Class R-II Certificate.
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"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any officer, including the President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and, with respect to a particular matter, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of such REO Property for all previously ended calendar months; and (b)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such REO Property, zero.
"Senior P&I Certificates": The Class A-1 Certificates and the
Class A-2 Certificates.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
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"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property,
and (iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.14, Section 3.16 and Section 3.23 (in the case of Section 3.23,
including but not limited to the cost of obtaining any Opinion of Counsel of the
kind described in Section 3.23(a)). The Master Servicer shall not be required to
make any Servicing Advance in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Master Servicer, would not be
ultimately recoverable from related Insurance Proceeds, Late Collections or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Fee": For any calendar month, with respect to each
Mortgage Loan and any REO Properties during such calendar month, an amount equal
to one month's interest (or, in the event of any payment of interest which
accompanies a Principal Prepayment in full made by the Mortgagor during such
calendar month, interest for the number of days covered by such payment of
interest) at the applicable Servicing Fee Rate on the same principal amount on
which interest on such Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Balance or Notional Amount, as applicable, of $1,000.
With respect to the Residual Certificates, a hypothetical Certificate of such
Class evidencing a 100% Percentage Interest in such Class.
"Special Hazard Amount": Initially, an amount equal to
$2,213,382. As of each anniversary of the Cut-off Date, an amount equal to the
lesser of (a) the Special Hazard Amount as of the immediately preceding
anniversary of the Cut-off Date minus the aggregate amount of Special Hazard
Losses on the Mortgage Loans allocated solely to the Subordinate Certificates in
accordance with Section 4.04 since such immediately preceding anniversary and
(b) the Adjustment Amount (as defined below) as most recently calculated for
such Sub-Pool. For each anniversary of the Cut-off Date, the Adjustment Amount
for such Sub-Pool shall be equal to the greatest of (i) the product of 1.00%
multiplied by the outstanding principal balance of the Mortgage Loans on the
Distribution Date immediately preceding such anniversary, (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of
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Mortgage Loans secured by Mortgaged Properties located in the same zip code area
in the State of California and (iii) twice the aggregate outstanding principal
balance (as of the immediately
preceding Distribution Date) of the largest Mortgage Loan.
"Special Hazard Loss": Any Realized Loss or portion thereof
not in excess of the lesser of the cost of repair or replacement of a Mortgaged
Property suffered by such Mortgaged Property by reason of damage caused by
certain hazards (including earthquakes, mudflows, and, to a limited extent,
floods) not insured against under the hazard insurance policies or fire or flood
insurance policies required to be maintained in respect of such Mortgaged
Property pursuant to Section 3.14, or by reason of the application of any
co-insurance provision. Special Hazard Losses shall not include any
Extraordinary Loss or any of the following:
(i) wear and tear, deterioration, rust or corrosion,
mold, wet or dry rot; inherent vice or latent defect;
animals, birds, vermin, insects;
(ii) smog, smoke, vapor, liquid or dust discharge from
agricultural or industrial operations; pollution;
contamination;
(iii) settling, subsidence, cracking, shrinkage, bulging or
expansion of pavements, foundations, walls, floors,
roofs or ceilings; and
(iv) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a
part thereof ensues and then only for the ensuing
loss.
"Startup Day": The day designated as such pursuant to Section
11.01(c) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer or the Trustee pursuant to Section 4.03,
Section 7.02 and Section 8.14, respectively, and distributed pursuant to Section
4.01 on or before such date of determination, (ii) all Principal Prepayments
received after the Cut-off Date, to the extent distributed pursuant to Section
4.01 on or before such date of determination, (iii) all Liquidation Proceeds and
Insurance Proceeds applied by the Master Servicer as recoveries of principal in
accordance with the provisions of Section 3.16(d), to the extent distributed
pursuant to Section 4.01 on or before such date of determination, and (iv) any
Realized Loss incurred with respect thereto as a result of a Deficient Valuation
made during or prior to the Prepayment Period for the most recent Distribution
Date coinciding with or preceding such date of determination; and (b) as of any
date of determination coinciding with or subsequent to the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, zero. With respect to any REO Property: (a) as of any
date of determination up to but not including the
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Distribution Date on which the proceeds, if any, of a Liquidation Event with
respect to such REO Property would be distributed, an amount (not less than
zero) equal to the Stated Principal Balance of the related Mortgage Loan as of
the date on which such REO Property was acquired on behalf of the Trust Fund,
minus the sum of (i) if such REO Property was acquired before the Distribution
Date in any calendar month, the principal portion of the Monthly Payment due on
the Due Date in the calendar month of acquisition, to the extent advanced by the
Master Servicer and the Trustee pursuant to Section 4.03 or Section 7.02 and
distributed pursuant to Section 4.01 on or before such date of determination,
and (ii) the aggregate amount of REO Principal Amortization in respect of such
REO Property for all previously ended calendar months, to the extent distributed
pursuant to Section 4.01 on or before such date of determination; and (b) as of
any date of determination coinciding with or subsequent to the Distribution Date
on which the proceeds, if any, of a Liquidation Event with respect to such REO
Property would be distributed, zero.
"Stayed Funds": As defined in Section 7.02(b).
"Subordinate Percentage": With respect to any Distribution
Date, a percentage equal to 100% minus the Class A-1 Percentage for such
Distribution Date.
"Subordinate Prepayment Percentage": With respect to any
Distribution Date, a percentage equal to 100% minus the Class A-1 Prepayment
Percentage.
"Subordinate Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:
(a) the product of (x) the then-applicable Subordinate
Percentage and (y) the sum of the following:
(i) the aggregate of the principal portions of all
Monthly Payments due during the related Due Period in respect
of the Mortgage Loans in Sub-Pool 1 whether or not received;
(ii) the principal portion of all Insurance Proceeds and
Liquidation Proceeds (other than amounts described in clause
(c) below) received in respect of the Mortgage Loans in
Sub-Pool 1 during the related Prepayment Period (other than
any such Mortgage Loan that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01 during the related Prepayment Period),
net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer
pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the Stated Principal Balance (calculated
immediately prior to such Distribution Date) of each Mortgage
Loan in Sub-Pool 1 that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01 during the related Prepayment Period;
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(iv) all REO Principal Amortization collected in respect
of any REO Property in Sub-Pool 1 during the related
Prepayment Period; and
(v) in connection with the substitution of one or more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans in Sub-Pool 1 pursuant to Section 2.03 during
the related Prepayment Period, the excess, if any, of (A) the
aggregate of the Stated Principal Balances (calculated as of
the respective dates of substitution) of such Deleted Mortgage
Loans, net of the aggregate of the principal portions of the
Monthly Payments due during the related Prepayment Period (to
the extent received from the related Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01
on the Distribution Date in the related Prepayment Period) in
respect of each such Deleted Mortgage Loan that was replaced
prior to the Distribution Date in the related Prepayment
Period, over (B) the aggregate of the Stated Principal
Balances (calculated as of the respective dates of
substitution) of such Qualified Substitute Mortgage Loans;
(b) the then-applicable Subordinate Prepayment Percentage of
all Principal Prepayments received in respect of the Mortgage Loans in
Sub-Pool 1 during the related Prepayment Period; provided that as
described herein in Section 4.01(c), amounts payable to the Class B-6
Certificates will be paid to the Class A-2 Certificates upon the
occurrence of a Prepayment Diversion Event;
(c) with respect to any Mortgage Loans in Sub-Pool 1 which
were the subject of a Final Recovery Determination in the related
Prepayment Period, the amount, if any, by which the net Liquidation
Proceeds and Insurance Proceeds allocable to principal in respect of
such Mortgage Loans exceed the amount distributable to the Class A-1
Certificates pursuant to clause (c) of the definition of "Class A-1
Principal Distribution Amount";
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Subordinate Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Subordinate Certificates on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
that were allocated to the Subordinate Certificates pursuant to Section
4.04; and
(e) with respect to the Class B-6 Certificates, any amounts
payable out of Sub- Pool 2 after a Prepayment Diversion Event as
described in Section 4.01(c).
"Sub-Pool": Either Sub-Pool 1 or Sub-Pool 2.
"Sub-Pool Available Distribution Amount": With respect to
either Sub-Pool and any Distribution Date, an amount equal to (1) the sum of (a)
the aggregate of the amounts on
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deposit in the Collection Account and Distribution Account as of the close of
business on the related Determination Date allocable to such Sub-Pool, (b) the
aggregate of any amounts received in respect of an REO Property in such Sub-Pool
withdrawn from any REO Account and deposited in the Distribution Account for
such Distribution Date pursuant to Section 3.23, (c) the aggregate of any
amounts deposited in the Distribution Account by the Master Servicer in respect
of Prepayment Interest Shortfalls allocable to such Sub-Pool for such
Distribution Date pursuant to Section 3.24, (d) the aggregate of any Payment
Advances allocable to such Sub-Pool made by the Master Servicer for such
Distribution Date pursuant to Section 4.03, and (e) the aggregate of any
advances allocable to such Sub-Pool made by the Trustee for such Distribution
Date pursuant to Section 7.02, reduced (to not less than zero) by (2) the sum of
(x) the portion of the amount described in clause (1)(a) hereof that represents
(i) Monthly Payments on the Mortgage Loans received from a Mortgagor on or prior
to the Determination Date but due during any Due Period subsequent to the
related Due Period, (ii) Principal Prepayments on the related Mortgage Loans
received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the related Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Mortgage Loans after the related
Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the
Master Servicer, the Trustee, the Mortgage Loan Seller or any Sub-Servicer
pursuant to Section 3.11 or Section 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses in respect of such Sub-Pool, (v) Stayed Funds
in respect of such Sub-Pool and (vi) amounts in respect of such Sub-Pool
deposited in the Collection Account or the Distribution Account, as the case may
be, in error, and (y) amounts in respect of such Sub-Pool reimbursable to the
Trustee for an advance made pursuant to Section 7.02(b) which advance the
Trustee, as the case may be, has determined to be nonrecoverable from the Stayed
Funds in respect of which it was made. Notwithstanding the foregoing, as
provided herein, the Sub-Pool Available Distribution Amount with respect to
Sub-Pool 1 may be reduced after a Cross-Collateralization Event and may be
increased or decreased after a Prepayment Diversion Event and the Sub-Pool
Available Distribution Amount with respect to Sub-Pool 2 may be increased after
a Cross-Collateralization Event and may be increased or decreased after a
Prepayment Diversion Event, in each case as provided in Section 4.01.
"Sub-Pool 1": The Sub-Pool consisting of adjustable-rate
Mortgage Loans and designated on the Mortgage Loan Schedule as Sub-Pool 1. With
respect to the Class A-1 Certificates, Sub-Pool 1 is sometimes referred to
herein as the related Sub-Pool and the Mortgage Loans in such Sub-Pool are
sometimes referred to herein as the related Mortgage Loans.
"Sub-Pool 2": The Sub-Pool consisting of fixed-rate Mortgage
Loans and designated on the Mortgage Loan Schedule as Sub-Pool 2. With respect
to the Class A-2 Certificates and the Class PO Certificates, Sub-Pool 2 is
sometimes referred to herein as the related Sub-Pool and the Mortgage Loans in
such Sub-Pool are sometimes referred to herein as the related Mortgage Loans.
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"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I and REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trust Fund": Collectively, all of the assets of REMIC I and
REMIC II.
"Trustee": Bankers Trust Company, its successor in interest,
or any successor trustee appointed as herein provided.
"Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate principal balance of the Mortgage Loans and any
REO Properties as of the second preceding Due Date (or, in the case of the
initial Distribution Date, as of the Cut-off Date).
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"Trustee's Fee Rate": 0.015% per annum.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, other than REMIC I Regular Interest PO, for any Distribution
Date, one month's interest at the REMIC I Remittance Rate applicable to such
REMIC I Regular Interest for such Distribution Date, accrued on the
Uncertificated Balance of such REMIC I Regular Interest outstanding immediately
prior to such Distribution Date. Uncertificated Accrued Interest in respect of
any REMIC I Regular Interest, other than REMIC I Regular Interest PO, shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Accrued Interest with respect to each Distribution Date as to any
REMIC I Regular Interest, other than REMIC I Regular Interest PO shall be
reduced as provided in Section 1.02 hereof.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal
deemed to have been made on such REMIC I Regular Interest on such Distribution
Date pursuant to Section 4.01(g)
and, if and to the extent necessary and appropriate, shall be further reduced
on such Distribution Date as provided in Section 4.04(c).
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations),
or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States Persons have the authority to control all substantial
decisions of the trust. The term "United States" shall have the meaning set
forth in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the value
thereof as determined by a BPO obtained by an Affiliate of the Mortgage Loan
Seller.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, (i) 98% of all of the Voting Rights shall be allocated
to the Regular Certificates, other than the Class XS Certificates, in proportion
to their then outstanding Certificate Principal Balances, (ii) 1% of all of the
Voting Rights shall be allocated to the Class XS Certificates, in proportion to
their then outstanding Certificate Notional Amounts and (iii) 1% of all of the
Voting Rights shall be allocated to the Residual Certificates, in proportion to
their Percentage Interests in such Class. All Voting
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Rights allocated to any Class of Certificates shall be allocated among such
Certificates PRO RATA in accordance with the respective Percentage Interests
evidenced thereby.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for each Class of
REMIC II Regular Certificates (and the amount of Uncertificated Accrued Interest
with respect to any REMIC I Regular Interest for any Distribution Date with
respect to either Sub-Pool), the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans in such Sub-Pool for any Distribution Date shall
be allocated among the REMIC II Regular Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Class Certificate Balance or Class Notional
Amount, as the case may be, of each such Certificate.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 12 thereof), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date).
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee or a Custodian on its
behalf the following documents or instruments with respect to each Mortgage Loan
(a "Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of Bankers Trust Company, as
Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., under the applicable Pooling
and Servicing Agreement, without recourse," with all prior and
intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to
the Trustee;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment of the Mortgage executed in
the following form: "Bankers Trust Company, as Trustee for the
registered holders of Salomon Brothers Mortgage Securities
VII, Inc., under the applicable Pooling and Servicing
Agreement";
(iv) the original recorded Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee
as contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any; and
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(vi) the original or copies of each lender's title
insurance policy, together with all endorsements or riders
which were issued with or subsequent to the issuance of such
policy, or a commitment or a binder to issue the same insuring
the priority of the Mortgage as a first lien on the Mortgaged
Property represented therein as a fee interest vested in the
Mortgagor.
The Master Servicer shall promptly submit or cause to be
submitted for recording, at the Mortgage Loan Seller's expense but at no expense
to the Trust Fund, the Custodian or the Trustee, in the appropriate public
office for real property records, each Assignment referred to in Sections
2.01(iii) and, to the extent not already done, (iv) above. In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Master Servicer shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded.
If any original Mortgage Note referred to in Section 2.01(i)
cannot be located, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee or a Custodian on
its behalf of a photocopy of the original of such Mortgage Note, if available,
with a lost note affidavit to follow within five Business Days. If any of the
documents referred to in Sections 2.01(ii), (iii) or (iv) above has as of the
Closing Date been submitted for recording but either (x) has not been returned
from the applicable public recording office or (y) has been lost or such public
recording office has retained the original of such document, the obligations of
the Depositor to deliver such documents shall be deemed to be satisfied upon (1)
delivery to the Trustee or a Custodian on its behalf of a copy of each such
document certified by the Mortgage Loan Seller in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Mortgage Loan Seller, delivery to the Trustee or a
Custodian on its behalf promptly upon receipt thereof of either the original or
a copy of such document certified by the applicable public recording office to
be a true and complete copy of the original. Notice shall be provided to the
Trustee, any Custodian and the Rating Agencies by the Mortgage Loan Seller if
delivery pursuant to clause (2) above will be made more than 180 days after the
Closing Date. The Depositor shall deliver or cause to be delivered to the
Trustee or a Custodian on its behalf promptly upon receipt thereof any other
original documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee or a Custodian on its behalf are and shall be held
by or on behalf of the Mortgage Loan Seller, the Depositor or the Master
Servicer, as the case may be, in trust for the benefit of the Trustee on behalf
of the Certificateholders. In the event that any such original document is
required pursuant to the terms of this Section to be a part of a Mortgage File,
such document shall be delivered promptly to the Trustee or a Custodian on its
behalf. Any such original document delivered to or held by the Depositor that is
not required pursuant to the terms of this Section to be a part of a Mortgage
File, shall be delivered promptly to the Master Servicer.
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The Depositor herewith delivers to the Trustee and the initial
Custodian an executed copy of the Mortgage Loan Purchase Agreement.
SECTION 2.02. Acceptance of REMIC I by Trustee.
Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt by it, or a Custodian on its behalf, of the
Mortgage Files (other than such documents described in Section 2.01(vi)) above
and all other assets included in the definition of "REMIC I" under clauses (i),
(iii), (iv) and (v) (to the extent of amounts deposited into the Distribution
Account) and declares that it holds and will hold such documents and the other
documents delivered to it constituting a Mortgage File, and all such assets and
such other assets included in the definition of "REMIC I," in trust for the
exclusive use and benefit of all present and future Certificateholders.
The Trustee or a Custodian on its behalf agrees, for the
benefit of the Certificateholders, to review each Mortgage File on or before the
Closing Date and to certify in substantially the form attached hereto as Exhibit
C-1 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan paid in full or any Mortgage Loan specifically identified
in the exception report annexed thereto as not being covered by such
certification), (i) the Mortgage Note included in each Mortgage File required to
be delivered to it pursuant to this Agreement is in its possession and (ii) such
Mortgage Note has been reviewed by it and appears regular on its face and
relates to such Mortgage Loan. It is herein acknowledged that, in conducting
such review, the Trustee or any Custodian on its behalf is under no duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are valid, legal, genuine,
enforceable, in recordable form or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face, or (ii) to determine whether any Mortgage File
should include any of the documents specified in clauses (ii) through (vi) of
Section 2.01.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
If while in the process of reviewing the Mortgage Files and
making or preparing, as the case may be, the certifications referred to above,
the Trustee or a Custodian on its behalf finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trustee shall so notify
(or cause a Custodian on its behalf to so notify) the Depositor and the Master
Servicer.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released by the Trustee or the Custodian to the Master Servicer
for servicing purposes.
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SECTION 2.03. Cure of Breaches; Repurchase or Substitution of
Mortgage Loans.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
lack of which materially and adversely affects the value of such Mortgage Loan,
or of the breach by the Mortgage Loan Seller of any representation or warranty
under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the party discovering such fact shall
promptly give written notice thereof to the other parties hereto. The Master
Servicer shall promptly notify the Mortgage Loan Seller of such defective or
missing document or breach and request that the Mortgage Loan Seller deliver
such missing document or cure such defect or breach within 60 days from the date
the Mortgage Loan Seller was notified of such defective or missing document. If
the Mortgage Loan Seller does not deliver such missing document or cure such
defect or breach in all material respects during such period, the Master
Servicer (or, in accordance with Section 3.02(b), the Trustee) shall enforce the
Mortgage Loan Seller's obligation under the Mortgage Loan Purchase Agreement (i)
with respect to any such breach that could not reasonably have been cured within
such 60 day period, if the Mortgage Loan Seller shall have commenced to cure
such breach within such 60 day period, to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Mortgage Loan Purchase Agreement and (ii) with respect to any such breach
(subject to clause (i) above) or any such defective or missing document, to
repurchase such Mortgage Loan from the Trust Fund at the Purchase Price within
120 days after the date on which the Mortgage Loan Seller was notified (subject
to Section 2.03(e)) of such defective or missing document or breach, if and to
the extent that the Mortgage Loan Seller is obligated to do so under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account and the Trustee or a
Custodian on its behalf, upon receipt of written certification from the Master
Servicer of such deposit, shall release to the Mortgage Loan Seller the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Mortgage Loan Seller shall
furnish to it and as shall be necessary to vest in the Mortgage Loan Seller any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to the related Mortgage File. In lieu of repurchasing
any such Mortgage Loan as set forth above, as provided in the Mortgage Loan
Purchase Agreement, the Mortgage Loan Seller may cause such Mortgage Loan to be
removed from the Trust Fund (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d). It is
understood and agreed that the obligation of the Mortgage Loan Seller to cure or
to repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee on behalf of
the Certificateholders.
(b) Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of the breach of any
representation or warranty of the Depositor set forth
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in Section 2.04 which materially adversely affects the interest of the
Certificateholders in any Mortgage Loan, the Depositor shall cure such breach in
all material respects.
(c) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.10 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) by the Mortgage Loan
Seller must be effected within two years after the Startup Day for the Trust
Fund.
As to any Deleted Mortgage Loan for which the Mortgage Loan
Seller substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Mortgage Loan Seller delivering to the
Trustee, with respect to each such Qualified Substitute Mortgage Loan or Loans,
the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary prior and other endorsements
thereon, as are required by Section 2.01, together with an Officers' Certificate
providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Trustee or a
Custodian on its behalf shall acknowledge receipt of such Qualified Substitute
Mortgage Loan or Loans and, within ten Business Days thereafter, review such
documents as specified in Section 2.02 and deliver to the Depositor and the
Master Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit C-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor and the Master Servicer
a certification substantially in the form of Exhibit C-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust Fund and
will be retained by the Mortgage Loan Seller. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payments due on
such Deleted Mortgage Loan on or before the Due Date in the month of
substitution, and the Mortgage Loan Seller shall thereafter be entitled to
retain all amounts subsequently received in respect of such Deleted Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including as of the date of substitution all applicable
representations and warranties of the Mortgage Loan Seller under the Mortgage
Loan Purchase Agreement.
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For any month in which the Mortgage Loan Seller substitutes
one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer will determine the amount (the "Substitution
Shortfall Amount"), if any, by which the aggregate Purchase Price of all such
Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified
Substitute Mortgage Loan, the Scheduled Principal Balance thereof as of the date
of substitution, together with one month's interest on the related Scheduled
Principal Balance of each such Qualified Substitute Mortgage Loan at the
applicable Mortgage Rate. On the date of such substitution, pursuant to the
terms of the Mortgage Loan Purchase Agreement, the Mortgage Loan Seller will
deliver or cause to be delivered to the Master Servicer for deposit in the
Collection Account an amount equal to the Substitution Shortfall Amount, if any,
and the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan
or Loans and certification by the Master Servicer of such deposit, shall
release, or cause any Custodian to release on its behalf, to the Mortgage Loan
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Mortgage Loan Seller shall deliver to it and as shall be necessary to vest
therein any Deleted Mortgage Loan released pursuant hereto.
In addition, pursuant to the Mortgage Loan Purchase Agreement,
the Mortgage Loan Seller shall obtain at its own expense and deliver to the
Trustee an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code, or (b) either of REMIC I or REMIC II to fail to
qualify as a REMIC at any time that any Certificate is outstanding.
(e) Upon discovery by the Depositor, the Mortgage Loan Seller,
the Master Servicer, any Custodian or the Trustee that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties hereto and the Mortgage Loan Seller.
In connection therewith, pursuant to the Mortgage Loan Purchase Agreement, the
Mortgage Loan Seller shall repurchase or, subject to the limitations set forth
in Section 2.03(d), substitute one or more Qualified Substitute Mortgage Loans
for the affected Mortgage Loan within 90 days of the earlier of discovery or
receipt of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth in
Section 2.03(a) and Section 2.03(d), respectively. The Trustee shall reconvey to
the Mortgage Loan Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
SECTION 2.04. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the
Trustee for the benefit of each of the Certificateholders and the Master
Servicer that as of the Closing Date or as of such
other date specifically provided herein:
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(i) The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware.
(ii) The execution and delivery of this Agreement by the
Depositor, and the performance and compliance with the terms
of this Agreement by the Depositor, will not violate the
Depositor's certificate of incorporation or by-laws or
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 agreement or other instrument
to which it is a party or which is applicable to it or any of
its assets.
(iii) The Depositor has the full power and authority to
enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery
and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by each of the other parties hereto,
constitutes a valid, legal and binding obligation of the
Depositor, enforceable against the Depositor in accordance
with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and
(B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Depositor is not in violation of, and its
execution and delivery of this Agreement and its performance
and compliance with the terms of this Agreement will not
constitute a violation of, any law, any order or decree of any
court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority,
which violation, in the Depositor's good faith and reasonable
judgment, is likely to affect materially and adversely either
the ability of the Depositor to perform its obligations under
this Agreement or the financial condition of the Depositor.
(vi) The transfer of the Mortgage Loans to the Trust
Fund as contemplated herein requires no regulatory approval,
other than any such approvals as have been obtained, and is
not subject to any bulk transfer or similar law in
effect in any applicable jurisdiction.
(vii) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor that,
if determined adversely to the Depositor, would prohibit the
Depositor from entering into this Agreement or, in the
Depositor's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the
Depositor to perform its obligations under this Agreement or
the financial condition of the Depositor.
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(viii) Immediately prior to the transfer of the Mortgage
Loans to the Trust Fund pursuant to this Agreement, (A) the
Depositor has marketable title to, and is the sole owner and
holder of, each Mortgage Loan, and (B) the Depositor has full
right and authority to sell, assign and transfer the Mortgage
Loans.
(ix) The Depositor is transferring the Mortgage Loans to
the Trust Fund free and clear of any liens, pledges, charges
and security interests.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee or any Custodian on its behalf and shall inure to the
benefit of the Certificateholders and the Trustee. Upon discovery by any Person
of a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the Person discovering such breach shall give
prompt written notice to the other parties, and in no event later than two
Business Days from the date of such discovery. The obligation of the Depositor
set forth in Section 2.03(b) to cure breaches shall constitute the sole remedy
available to the Certificateholders or to the Trustee on their behalf respecting
a breach of the representations and warranties contained in this Section 2.04.
SECTION 2.05. Execution, Authentication and Delivery of Class
R-I Certificates; Creation of REMIC I Regular
Interests.
The Trustee hereby acknowledges the assignment to it of the
assets included in REMIC I. Concurrently with such assignment and in exchange
therefor, the Trustee, pursuant to the written request of the Depositor executed
by an officer of the Depositor, has executed, authenticated and delivered to or
upon the order of the Depositor, the Class R-I Certificates in authorized
denominations. The interests evidenced by the Class R-I Certificates, together
with the REMIC I Regular Interests, constitute the entire beneficial ownership
of REMIC I. The rights of the Class R-I Certificateholders and REMIC II (as
holder of the REMIC I Regular Interests) to receive distributions from the
proceeds of REMIC I in respect of the Class R-I Certificates and the REMIC I
Regular Interests, respectively, and all ownership interests evidenced or
constituted by the Class R-I Certificates and the REMIC I Regular Interests,
shall be as set forth in this Agreement.
SECTION 2.06. Conveyance of REMIC I Regular Interests;
Acceptance of REMIC II by Trustee.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery of this Agreement, does hereby assign without
recourse all the right, title and interest of the Depositor in and to the REMIC
I Regular Interests to the Trustee for the benefit of the Holders of the REMIC
II Certificates. The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of the REMIC II
Certificates.
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SECTION 2.07. Execution, Authentication and Delivery of REMIC
II Certificates.
Concurrently with the assignment to it of the REMIC I Regular
Interests and in exchange therefor, the Trustee, pursuant to the written request
of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, the REMIC II
Certificates in authorized denominations evidencing the entire beneficial
ownership of REMIC II. The rights of the Holders of the respective Classes of
REMIC II Certificates to receive distributions from the proceeds of REMIC II in
respect of their REMIC II Certificates, and all ownership interests evidenced or
constituted by the respective Classes of REMIC II Certificates in such
distributions, shall be as set forth in this Agreement.
SECTION 2.08. Representations, Warranties and Covenants of the
Master Servicer.
(a) The Master Servicer hereby represents, warrants and
covenants to the Trustee, for the benefit of each of the Certificateholders and
the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is duly organized, validly
existing and in good standing as a Delaware corporation under
the laws of the State of Delaware and is and will remain in
compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure, or to
cause a Sub-Servicer to ensure, the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loans in
accordance with the terms of this Agreement.
(ii) The Master Servicer has the full power and
authority to conduct its business as presently conducted by it
and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement.
The Master Servicer has duly authorized the execution,
delivery and performance of this Agreement, has duly executed
and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by each of the other
parties hereto, constitutes a legal, valid and binding
obligation of the Master Servicer, enforceable against it in
accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors' rights generally
and by general principles of equity.
(iii) The execution and delivery of this Agreement by the
Master Servicer and the performance of and compliance with the
terms of this Agreement will not (a) violate the Master
Servicer's charter or by-laws or any law, rule, regulation,
order, judgment, award, administrative interpretation,
injunction, writ, decree or the like affecting the Master
Servicer or by which the Master Servicer is bound or (b)
result in a breach of or constitute a default under any
indenture or other material agreement to which the Master
Servicer is a party or by which the Master
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Servicer is bound, which in the case of either clause (a) or
(b) will have a material adverse effect on the Master
Servicer's ability to perform its obligations under this
Agreement.
(iv) The Master Servicer, or the Affiliate of the Master
Servicer that is sub-servicing the Mortgage Loans, is an
approved servicer for FNMA in good standing. No event has
occurred, including but not limited to a change in insurance
coverage, which would make such party unable to comply with
FHLMC or FNMA (as applicable) eligibility requirements or
which would require notification to FHLMC or FNMA (as
applicable).
(v) The Master Servicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform
each and every covenant contained in this Agreement.
(vi) With respect to each Mortgage Loan, the Master
Servicer is in possession of a complete Mortgage File, except
with respect to such documents as have been delivered to the
Trustee or the Custodian.
(vii) There are no actions or proceedings against or
investigations known to the Master Servicer before any court,
administrative or other tribunal that (A) might prohibit its
entering into this Agreement, (B) seek to prevent the
consummation of the transactions contemplated by this
Agreement or (C) might prohibit or materially and adversely
affect the performance by the Master Servicer of its
obligations under, or the validity or enforceability of, this
Agreement.
(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 the compliance by the Master Servicer with, this Agreement
or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations
or orders, if any, that have been obtained prior to the
Closing Date;
(ix) No litigation is pending or, to the best of the
Master Servicer's knowledge, threatened against the Master
Servicer which would prohibit the Master Servicer from
entering into this Agreement or, in the Master Servicer's good
faith reasonable judgment, is likely to materially and
adversely affect either the ability of the Master Servicer to
perform its obligations under this Agreement or the financial
condition of the Master Servicer.
(b) It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.08 shall survive delivery
of the Mortgage Files to the Trustee or any Custodian on its behalf and shall
inure to the benefit of the Trustee, the Depositor and the Certificateholders.
Upon discovery by any Person of a breach of any of the foregoing
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representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than five Business Days following such discovery)
to the Trustee. The obligation of the Master Servicer set forth in Section
2.03(c) to cure breaches shall constitute the sole remedy available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations, warranties and covenants contained in this Section 2.08.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders and loan servicers administering similar
mortgage loans but without regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with any Mortgagor;
(ii) the ownership of any Certificate by the Master
Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Payment
Advances or Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right
to receive compensation for its services hereunder or with
respect to any particular transaction.
The Master Servicer will not foreclose on any Mortgage Loan based on the
delinquency circumstances in existence on the Closing Date. To the extent
consistent with the foregoing, the Master Servicer shall seek to maximize the
timely and complete recovery of principal and interest on the Mortgage Notes.
Subject only to the above-described servicing standards and the terms of this
Agreement and of the respective Mortgage Loans, the Master Servicer shall have
full power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Master Servicer believes it appropriate in its best judgment,
to execute and deliver, on behalf of the Certificateholders and the Trustee or
any of them, and any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and the Certificateholders. The Master
Servicer shall service and administer the
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Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall execute, at the
written request of the Master Servicer, and furnish to the Master Servicer and
any Sub-Servicer, any special or limited powers of attorney and other documents
necessary or appropriate to enable the Master Servicer or any Sub-Servicer to
carry out their servicing and administrative duties hereunder and the Trustee
shall not be liable for the actions of the Master Servicer or any Sub-Servicers
under such powers of attorney.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3.09, and
further as provided in Section 3.11. Any cost incurred by the Master Servicer or
by Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan and the Master Servicer shall not (i) permit any modification with respect
to any Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan or (ii) permit any modification, waiver or amendment of any term
of any Mortgage Loan that would both (A) effect an exchange or reissuance of
such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause the Trust
Fund to fail to qualify as a REMIC under the Code or the imposition of any tax
on "prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions.
The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers; Enforcement of Sub-Servicing
Agreements and the Mortgage Loan Purchase
Agreement.
(a) The Master Servicer may enter into Sub-Servicing
Agreements for the servicing and administration of the Mortgage Loans; provided,
however, that such agreements
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would not result in a withdrawal or a downgrading by any Rating Agency of the
rating on any Class of Certificates.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts in which
are insured by the FDIC and (iii) at all times, a FHLMC or FNMA approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub- Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the Sub-
Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the Trustee copies of all Sub- Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement and of the Mortgage Loan Seller under the Mortgage Loan Purchase
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a Mortgage Loan on account of missing or defective documentation or on
account of a breach of a representation, warranty or covenant, as described in
Section 2.03. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, and
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, or (ii) from a specific recovery
of costs, expenses or attorneys' fees against the party against whom such
enforcement is directed. Notwithstanding the first sentence of this Section
3.02(b), enforcement of the Mortgage Loan Purchase Agreement
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against the Mortgage Loan Seller shall be effected by the Master Servicer to the
extent it is not the Mortgage Loan Seller or an Affiliate of the Mortgage Loan
Seller, and otherwise by the Trustee, in accordance with the foregoing
provisions of this paragraph; provided, however, that if such enforcement is by
the Trustee, the Trustee shall be reimbursed for the costs of such enforcement
(A) first (i) from a general recovery resulting from such enforcement, to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed and
(B) second, to the extent amounts described in clause (A) above are insufficient
for such reimbursement and to the extent such costs of enforcement are
reasonable, from the Trust Fund.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer shall either
service directly the related Mortgage Loans or enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub- Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or Certificateholders.
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Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and any related insurance policy, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing and subject to Section 3.01,
the Master Servicer may in its discretion (i) waive any late payment charge or,
if applicable, any penalty interest or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Master Servicer shall make timely advances on
such Mortgage Loan during such extension pursuant to Section 4.03 and in
accordance with the amortization schedule of such
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Mortgage Loan without modification thereof by reason of such arrangement.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the standards set forth in
Section 3.01, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan (such
payment, a "Short Pay-off"), or consent to the postponement of strict compliance
with any such term or otherwise grant indulgence to any Mortgagor if in the
Master Servicer's determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the Certificateholders
(taking into account any estimated Realized Loss that might result absent such
action).
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer will be required to deposit into the Sub-Servicing
Account no later than the first Business Day after receipt all proceeds of
Mortgage Loans received by the Sub-Servicer, less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and to remit such proceeds
to the Master Servicer for deposit in the Collection Account not later than the
first Business Day thereafter. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Sub- Servicer receives such payments.
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of taxes,
assessments, hazard insurance premiums and comparable items for the account of
the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
Servicing Accounts on a daily basis, and retain therein, all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting the
timely payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
timely payment of taxes, assessments, hazard insurance premiums and comparable
items; (ii) reimburse the Master Servicer (or a Sub-Servicer to the extent
provided in the related Sub-Servicing Agreement) out of related collections for
any advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.14 (with respect to hazard insurance); (iii) refund
to Mortgagors any sums as may be determined to be overages; (iv) pay interest,
if required and as described below, to Mortgagors on balances in the Servicing
Account;
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or (v) clear and terminate the Servicing Account at the termination of the
Master Servicer's obligations and responsibilities in respect of the Mortgage
Loans under this Agreement in accordance with Article XI. As part of its
servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law or the related Mortgage Loan Documents and, to the extent that interest
earned on funds in the Servicing Accounts is insufficient, to pay such interest
from its or their own funds, without any reimbursement therefor. To the extent
such interest is not required by law or the related Mortgage Loan Documents to
be paid to the related Mortgagors, the Master Servicer may retain such interest
as additional servicing compensation.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more trust accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the Collection Account on a daily basis in
immediately available funds, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the
related Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds
(other than proceeds collected in respect of any particular
REO Property and amounts paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on
Permitted Investments with respect to funds held in the
Collection Account;
(v) any amounts required to be deposited by the Master
Servicer pursuant to the second paragraph of Section 3.14(a)
in respect of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 10.01;
and
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(vii) all amounts required to be deposited in connection
with shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Section 2.03.
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of prepayment
or 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 as
additional compensation as provided in Section 3.18. In the event the Master
Servicer shall deposit in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more trust accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 5:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Sub-Pool Available Distribution
Amount for each Sub-Pool (calculated without regard to the references in clause
(2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, and (ii) on each Business Day as of the commencement of
which the balance on deposit in the Collection Account exceeds $75,000 following
any withdrawals pursuant to the next succeeding sentence, the amount of such
excess, but only if the Collection Account constitutes an Eligible Account
solely pursuant to clause (ii) of the definition of "Eligible Account";
provided, however, that the Master Servicer in accordance with Section 3.12(b)
shall be entitled to any income or gain realized from the investment of such
funds so delivered to the Trustee for deposit in the Distribution Account
pursuant to clause (ii) above for the period commencing on the date of such
delivery and ending on the Master Servicer Remittance Date.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request in
writing certified by a Servicing Officer that the Trustee withdraw such amount
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from the Distribution Account and remit to it any such amount, any provision
herein to the contrary notwithstanding. In addition, the Master Servicer shall
deliver to the Trustee from time to time for deposit, and the Trustee shall so
deposit, in the Distribution Account:
(i) any Payment Advances, as required pursuant to
Section 4.03;
(ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01;
(iv) any amounts required to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest
Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the
federal bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes,
without priority, or as described in Section
4.03:
(i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted
pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer or the Trustee for Payment Advances, but only to the
extent of amounts received which represent Late Collections
(net of the related Servicing Fees) of Monthly Payments on
Mortgage Loans with respect to which such Payment Advances
were made in accordance with the provisions of Section 4.03 or
Section 7.02; provided that, unless the Master Servicer has
been terminated hereunder, no such Payment Advances shall be
reimbursed to the Master Servicer until all Payment Advances,
if any, made by the Trustee have been reimbursed to the
Trustee;
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(iii) subject to Section 3.16(d), to pay the Master
Servicer or any Sub- Servicer any unpaid Servicing Fees and
reimburse any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Liquidation
Proceeds, Late Collections and Insurance Proceeds received
with respect to such Mortgage Loan (provided, however, that if
in the good faith business judgment of the Master Servicer,
any unreimbursed Servicing Advance will not be ultimately
recoverable from related Late Collections, Liquidation
Proceeds or Insurance Proceeds on such Mortgage Loan, then
withdrawal from the general funds in the Collection Account,
without regard to the limitation set forth above, will be
permitted);
(iv) subject to Section 3.12(b), to pay to the Master
Servicer as servicing compensation (in addition to the
Servicing Fee) on the first Business Day and no later than the
fifth Business Day of the succeeding month, any interest
income earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer or the Mortgage Loan
Seller, as the case may be, with respect to each Mortgage Loan
that has previously been purchased or replaced pursuant to
Section 2.03 or Section 3.16(c) all amounts received thereon
subsequent to the date of purchase or substitution, as the
case may be;
(vi) to reimburse the Master Servicer or the Trustee for
any Payment Advance previously made which the Master Servicer
or the Trustee has determined to be a Nonrecoverable Payment
Advance in accordance with the provisions of
Section 4.03;
(vii) to reimburse the Master Servicer or the Depositor
for expenses incurred by or reimbursable to the Master
Servicer or the Depositor, as the case may be, pursuant to
Section 6.03;
(viii) to reimburse the Trustee for expenses reasonably
incurred in respect of the breach or defect giving rise to the
purchase obligation under Section 2.03 of this Agreement that
were included in the Purchase Price of the Mortgage Loan,
including any expenses arising out of the enforcement of the
purchase obligation;
(ix) to pay, or to reimburse the Master Servicer for
advances in respect of, expenses incurred in connection with
any Mortgage Loan pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account
pursuant to Section 10.01.
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The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (v), (vi), (viii) and (ix)
above. The Master Servicer shall provide written notification to the Trustee
certified by a Servicing Officer, on or prior to the next succeeding Master
Servicer Remittance Date, upon making any withdrawals from the Collection
Account pursuant to subclauses (vi) and (vii) above.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions to Certificateholders in
accordance with Section 4.01;
(ii) to pay itself the Trustee's Fee pursuant to Section
8.05;
(iii) to pay itself any interest income earned on funds
deposited in the Distribution Account pursuant to Section
3.12(c);
(iv) to reimburse itself pursuant to Section 7.02;
(v) to pay any amounts in respect of taxes pursuant to
Section 11.01(h)(iii); and
(vi) to clear and terminate the Distribution Account
pursuant to Section 10.01.
SECTION 3.12. Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to hold such funds uninvested
or to invest the funds in such Investment Account in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Trustee is the obligor thereon, and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Trustee is the obligor thereon.
All such Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account shall be made in the
name of the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Trustee shall be entitled to sole possession (except with respect
to investment direction of funds held in the Collection Account and any income
or gain realized thereon) over each such investment, and any certificate or
other instrument
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evidencing any such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Trustee or its nominee. In the event amounts on deposit
in an Investment Account are at any time invested in
a Permitted Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11(a). The Master Servicer shall deposit
in the Collection Account the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
SECTION 3.13. [intentionally omitted]
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SECTION 3.14. Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the lesser of the current
principal balance of such Mortgage Loan and the amount necessary to fully
compensate for any damage or loss to the improvements which are a part of such
property on a replacement cost basis, in each case in an amount not less than
such amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. The Master Servicer shall also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Master Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Master Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the Master Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).
In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer acceptable to FNMA against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.14, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with the first two sentences of this Section 3.14,
and there shall have been one or more losses which would have been covered by
such policy, deposit to the Collection Account from its own funds the amount not
otherwise
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payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of FHLMC or FNMA if it were the purchaser of the Mortgage
Loans, unless the Master Servicer has obtained a waiver of such requirements
from FHLMC or FNMA (as applicable). The Master Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of FHLMC
or FNMA, unless the Master Servicer has obtained a waiver of such requirements
from FHLMC or FNMA (as applicable). The Master Servicer shall be deemed to have
complied with this provision if an Affiliate of the Master Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has actual
knowledge of any conveyance or prospective conveyance of any Mortgaged Property
by any Mortgagor (whether by absolute conveyance or by contract of sale, and
whether or not the Mortgagor remains or is to remain liable under the Mortgage
Note and/or the Mortgage), exercise its rights to accelerate the maturity of
such Mortgage Loan under the "due-on-sale" clause, if any, applicable thereto;
provided, however, that the Master Servicer shall not exercise any such rights
if prohibited by law from doing so. If the Master Servicer reasonably believes
it is unable under applicable law to enforce such "due-on-sale" clause, or if
any of the other conditions set forth in the proviso to the preceding sentence
apply, the Master Servicer will enter into an assumption and modification
agreement from or with the person to whom such property has been conveyed or is
proposed to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Master Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The Master Servicer shall not take or enter into any
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assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee or any Custodian on its behalf the
executed original of such substitution or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use its best efforts, consistent
with the servicing standard set forth in Section 3.01, to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.11 and 3.23. The foregoing is subject to
the provision that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself for such
expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action, with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee or the Certificateholders
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would be considered to hold title to, to be a "mortgagee-in-possession" of, or
to be an "owner" or "operator" of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Master
Servicer determines, based on its reasonable judgment and a prudent report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in
the best economic interest of the Trust Fund to take such
actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal
of any hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials for which investigation,
testing, monitoring, containment, clean-up or remediation
could be required under any federal, state or local law or
regulation, or that if any such materials are present for
which such action could be required, that it would be in the
best economic interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of such Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from the
Trust Fund any Mortgage Loan which is 90 days or more delinquent and which the
Master Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price. The Purchase Price for any Mortgage Loan purchased hereunder shall be
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deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release or cause
to be released by the Custodian, to the Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as the Master Servicer shall furnish and as shall
be necessary to vest in the Master Servicer title to any Mortgage Loan released
pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer (or any Sub-Servicer) or the Trustee for any related
unreimbursed Servicing Advances and Payment Advances, pursuant to Section
3.11(a)(ii) or (iii); SECOND, to accrued and unpaid interest on the Mortgage
Loan, to the date of the Final Recovery Determination, or to the Due Date prior
to the Distribution Date on which such amounts are to be distributed if not in
connection with a Final Recovery Determination; THIRD, as a recovery of
principal of the Mortgage Loan and FOURTH, to amounts owing the Master Servicer
pursuant to the first sentence of the second paragraph of Section 3.18. If the
amount of the recovery so allocated to interest is less than the full amount of
accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Master Servicer as follows: FIRST, to unpaid
Servicing Fees and Trustee's Fees; and SECOND, to the balance of the interest
then due and owing. The portion of the recovery so allocated to unpaid Servicing
Fees shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(a)(iii). The portion of the recovery allocated to interest (net of
unpaid Servicing Fees and Trustee's Fees) and the portion of the recovery
allocated to principal of the Mortgage Loan shall be applied as follows: FIRST,
to reimburse the Master Servicer or the Trustee, as applicable, for any related
unreimbursed Payment Advances in accordance with Section 3.11(a)(ii), and
SECOND, as part of the amounts to be transferred to the Distribution Account in
accordance with Section 3.10(b).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by a certification in the form of Exhibit E (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, the Trustee shall
promptly release or cause the related Custodian to release the related Mortgage
File to the Master Servicer. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account or the Distribution Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the
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Mortgage Loans, the Trustee or the Custodian, upon request of the Master
Servicer and delivery to the Trustee of a Request for Release in the form of
Exhibit E, shall release the related Mortgage File to the Master Servicer, and
the Trustee shall, at the direction of the Master Servicer, execute such
documents as shall be necessary to the prosecution of any such proceedings. Such
Request for Release shall obligate the Master Servicer to return each and every
document previously requested from the Mortgage File to the Trustee or any
related Custodian on its behalf when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation which are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or the Custodian on its behalf to the Master Servicer.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds, Late Collections or Liquidation Proceeds to the extent permitted by
Section 3.11(a)(iii) and out of amounts derived from the operation and sale of
an REO Property to the extent permitted by Section 3.23. The right to receive
the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement.
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Additional servicing compensation in the form of prepayment
charges, assumption fees, late payment charges or otherwise shall be retained by
the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account
and pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12 and Section 3.24. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder (including premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer
and servicing compensation of each Sub-Servicer) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee and the Depositor a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.10(a) and each category of withdrawal specified in Section 3.11(a).
Such statement shall also include information as to the aggregate of the
outstanding principal balances of all of the Mortgage Loans as of the last day
of the calendar month immediately preceding such Distribution Date. Copies of
such statement shall be provided by the Trustee to any Certificateholder and to
any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Master Servicer will deliver to the Trustee and the
Depositor not later than April 30 of each year an Officers' Certificate stating,
as to each signatory thereof, that (i) a review of the activities of the Master
Servicer during the preceding year and of performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. Copies of any
such statement shall be provided by the Trustee to any Certificateholder and to
any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than 120 days following the end of each fiscal year
of the Master Servicer, the Master Servicer, at its expense, shall cause a
nationally recognized firm of independent
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certified public accountants to furnish to the Master Servicer a report to the
effect that, on the basis of an examination by such firm conducted substantially
in compliance with either the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America or the Audit
Program for Mortgages serviced for FHLMC, the servicing by or on behalf of the
Master Servicer of mortgage loans under agreements substantially similar to each
other (including this Agreement) was conducted in compliance with the terms of
such agreements except for any significant exceptions or errors in records that,
in the opinion of the firm, the Audit Program for Mortgages serviced for FHLMC
or the Uniform Single Attestation Program for Mortgage Bankers requires it to
report with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the expense of the requesting party, provided
that such statement is delivered by the Master Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee and to any Person identified to the Master Servicer as a prospective
transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the
Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within two years after the Trust Fund acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal Revenue Service, more than 60 days before the day on
which the two-year grace period would otherwise expire, an extension of the
two-year grace period, unless the Master Servicer shall have delivered to the
Trustee an Opinion of Counsel, addressed to the
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Trustee and the Master Servicer, to the effect that the holding by the Trust
Fund of such REO Property subsequent to two years after its acquisition will not
result in the imposition on the Trust Fund of taxes on "prohibited transactions"
thereof, as defined in Section 860F of the Code, or cause the Trust Fund to fail
to qualify as a REMIC under Federal law at any time that any Certificates are
outstanding. The Master Servicer shall manage, acquire, conserve, protect and
operate each REO Property for the Certificateholders solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the Trust Fund of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited, on a daily basis in the REO Account all revenues
received by it with respect to an REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:
(i) all insurance premiums due and payable in respect of
such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property that may result in the imposition of a lien
thereon; and
(iii) all costs and expenses necessary to maintain such
REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds as a Servicing Advance such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such
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advances if the Master Servicer owned the REO Property and if in the Master
Servicer's judgment, the payment of such amounts will be recoverable from the
rental or sale of the REO Property.
Notwithstanding the foregoing, the Master Servicer shall not:
(i) permit the Trust Fund to enter into, renew or
extend any New Lease with respect to any REO Property, if the
New Lease by its terms will give rise to any income that does
not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under
any New Lease other than amounts that will constitute Rents
from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other
improvement thereon, and then only if more than ten percent of
the construction of such building or other improvement was
completed before default on the related Mortgage Loan became
imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
(iv) allow any Person to Directly Operate any REO
Property on any date more than 90 days after its date of
acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall
not be inconsistent herewith;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay
all costs and expenses incurred in connection with the
operation and management of such REO Property, including those
listed above and remit all related revenues (net of such costs
and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c)
relating to any such contract or to actions taken through any
such Independent Contractor shall be deemed to relieve the
Master Servicer of any of its duties and obligations to the
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Trustee on behalf of the Certificateholders with respect to
the operation and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all
duties and obligations in connection with the operation and
management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Payment
Advances made in respect of such REO Property or the related Mortgage Loan. On
the Master Servicer Remittance Date, the Master Servicer shall withdraw from
each REO Account maintained by it and deposit into the Distribution Account in
accordance with Section 3.10(d)(ii), for distribution on the related
Distribution Date in accordance with Section 4.01, the income from the related
REO Property received during the prior calendar month, net of any withdrawals
made pursuant to Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
(f) The proceeds from the REO Disposition, net of (i) any
amount required by law to be remitted to the Mortgagor under the related
Mortgage Loan, (ii) any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above and (iii) brokers' commissions and closing costs
customary for the locale of the related REO Property, shall be deposited in the
Distribution Account in accordance with Section 3.10(d)(ii) on the Master
Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports
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shall be in form and substance sufficient to meet the reporting requirements
imposed by such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting solely from Principal Prepayments in full during the related
Prepayment Period and (ii) the total amount of its servicing compensation for
the most recently ended calendar month. Any amounts paid by the Master Servicer
pursuant to this Section 3.24 shall not be reimbursed by the Trust Fund.
SECTION 3.25. Obligations of the Master Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. As provided in Section 3.11, the Master Servicer is entitled to
withdraw any amounts deposited in error.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the sum of the Sub-Pool Available
Distribution Amount for Sub-Pool 1 and the Sub-Pool Available Distribution
Amount for Sub-Pool 2 and distribute to the Certificateholders the following
amounts by 10:00 a.m. New York City time, in the following order of priority:
(i) to pay interest to the holders of the Senior P&I
Certificates, the Class XS Certificates and, on the first
Distribution Date, the Class R-I Certificates and the Class
R-II Certificates, PRO RATA based on entitlement, up to an
amount equal to the Interest Distribution Amount in respect of
each such Class of Certificates for such Distribution Date;
(ii) to pay principal to the holders of the Senior P&I
Certificates and the Class PO Certificates up to an amount
equal to the Class A-1 Principal Distribution Amount, the
Class A-2 Principal Distribution Amount and the Class PO
Principal Distribution Amount and to pay to the holders of the
Class R-I and Class R-II Certificates on the first
Distribution Date $100 each;
(iii) to pay interest to the holders of the Class B-1
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
(iv) to pay interest to the holders of the Class B-2
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
(v) to pay interest to the holders of the Class B-3
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
(vi) to pay interest to the holders of the Class B-4
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
(vii) to pay interest to the holders of the Class B-5
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
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(viii) to pay interest to the holders of the Class B-6
Certificates up to an amount equal to the Interest
Distribution Amount in respect of each such Class of
Certificates for such Distribution Date;
(ix) to the holders of the Class B Certificates, an
aggregate amount equal to the Subordinate Principal
Distribution Amount for such Distribution Date (applied to
reduce the Class Certificate Balances of such Certificates),
allocable among the Classes of Class B Certificates PRO RATA
in accordance with the respective amounts payable as to each
such Class pursuant to the priorities and amounts set forth in
Section 4.01(b); and
(x) to reimburse the holders of the REMIC II Regular
Certificates for any amount previously allocated thereto
pursuant to Section 4.04 hereof, in the following order:
first, to the Senior P&I Certificates and Class PO
Certificates on a PRO RATA basis based on the amounts so
previously allocated thereto; second, to the Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates,
Class B-4 Certificates, Class B-5 Certificates and Class B-6
Certificates in that order.
All references above to the Class Certificate Balance of any
Class of Certificates shall be to the Class Certificate Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses and Extraordinary Trust Fund Expenses, in each case to be
allocated to such Class of Certificates on such Distribution Date pursuant to
Section 4.04.
(b)(i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Class B Certificates pursuant
to Section 4.01(a)(ix) above shall be applied among the various Classes thereof,
in an order of priority from the Class of Class B Certificates with the lowest
numerical class designation to the Class of Class B Certificates with the
highest numerical class designation, in each case to the extent of remaining
available funds up to the amount allocable to such Class for such Distribution
Date and in each case until the Class Certificate Balance of each such Class is
reduced to zero, in an amount with respect to each such Class equal to the sum
of (A) the related Class B Percentage of the amounts described in clause (a) of
the definition of Subordinate Principal Distribution Amount, (B) the portion of
the amounts described in clauses (b) and (c) of the definition of Subordinate
Principal Distribution Amount allocable to the such Class pursuant to Section
4.01(b)(ii) below and (C) the excess, if any, of the amount required to be
distributed to such Class pursuant to this Section 4.01(b)(i) for the
immediately preceding Distribution Date, over the aggregate distributions of
principal made in respect of such Class of Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that any such
excess is not attributable to Realized Losses which were allocated to Class B
Certificates with a lower priority pursuant to Section 4.04.
(ii) On any Distribution Date, the portion of (a) all net
Liquidation Proceeds and Insurance Proceeds with respect to any Mortgage Loans
the subject of a Final Recovery Determination in the related Prepayment Period
and (b) all Principal Prepayments received in
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respect of the Mortgage Loans in the related Prepayment Period, allocable to
principal and not included in the Senior Principal Distribution Amount, will be
allocated on a PRO RATA basis among the following Classes of Class B
Certificates (each, an "Eligible Class") in proportion to the respective
outstanding Class Certificate Balances thereof: (A) the Class B-1 Certificates,
(B) the Class B-2 Certificates, if on such Distribution Date the aggregate
percentage interest in the Trust Fund evidenced by the Class B-2 Certificates,
the Class B-3 Certificates, the Class B-4 Certificates, the Class B-5
Certificates and the Class B-6 Certificates equals or exceeds 18.50% before
giving effect to distributions on such Distribution Date, (Ci) the Class B-3
Certificates, if on such Distribution Date the aggregate percentage interest in
the Trust Fund evidenced by the Class B-3 Certificates, the Class B-4
Certificates, the Class B-5 Certificates and the Class B-6 Certificates equals
or exceeds 14.00% before giving effect to distributions on such Distribution
Date, (D) the Class B-4 Certificates, if on such Distribution Date the aggregate
percentage interest in the Trust Fund evidenced by the Class B-4 Certificates,
the Class B-5 Certificates and the Class B-6 Certificates equals or exceeds
11.00% before giving effect to distributions on such Distribution Date, (E) the
Class B-5 Certificates, if on such Distribution Date the aggregate percentage
interest in the Trust Fund evidenced by the Class B-5 Certificates and the Class
B-6 Certificates equals or exceeds 5.75% before giving effect to distributions
on such Distribution Date and (F) the Class B-6 Certificates, if on such
Distribution Date the aggregate percentage interest in the Trust Fund evidenced
by the Class B-6 Certificates equals or exceeds 4.25% before giving effect to
distributions on such Distribution Date. Notwithstanding the foregoing, if the
application of the foregoing on any Distribution Date as provided in Section
4.01 would result in a distribution in respect of principal to any Class or
Classes of Class B Certificates in an amount greater than the remaining Class
Certificate Balance thereof (any such Class, a "Maturing Class") then: (a) the
amount to be allocated to each Maturing Class shall be reduced to a level that,
when applied as described above, would exactly reduce the Class Certificate
Balance of such Class to zero and (b) the total amount of the reductions
pursuant to clause (a) above in the amount to be allocated to the Maturing Class
or Classes shall be allocated among the remaining Eligible Classes on a PRO RATA
basis in proportion to the respective outstanding Class Certificate Balances
thereof prior to the allocation thereto of any of the amounts described in the
preceding sentence.
(c) Notwithstanding the provisions of Section 4.01(b)(ii)(F)
above, on any Distribution Date if the Certificate Principal Balance of the
Class B-6 Certificates, after giving effect to scheduled distributions of
principal on such Distribution Date, as a percentage of the then current
aggregate Certificate Principal Balance of the Class A-2 Certificates and the
Class PO Certificates , after giving effect to scheduled and unscheduled
distributions of principal on such Distribution Date, is less than 25% (a
"Prepayment Diversion Event"), then amounts payable pursuant to Section
4.01(b)(ii)(F) will be paid as additional principal to the Class A-2
Certificates in an amount sufficient to reduce the Certificate Balance of the
Class B-6 Certificates to 25% of the then current Certificate Balance of the
Class A-2 Certificates and Class PO Certificates until such time as the 25%
requirement stated above is satisfied. To the extent of such acceleration of the
payment of the Certificate Principal Balance of the Class A-2 Certificates, the
Class B-6 Certificates shall be entitled to amounts from Sub-Pool 2 on any
subsequent Distribution Date to the extent the then current Certificate
Principal Balance of the Class B-6 Certificates exceeds 25% of the Certificate
Balance of the Class A-2 Certificates and the Class PO Certificates in an amount
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sufficient to reduce the Certificate Balance of the Class B-6 Certificates to
25% of the then current Certificate Balance of the Class A-2 Certificates and
Class PO Certificates.
(d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(f) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Balance that is in excess of the lesser of (i) $5,000,000
or (ii) two-thirds of the initial Certificate Balance (or, in the case of the
Residual Certificates, a 66% Percentage Interest) of such Class of Certificates,
or otherwise by check mailed by first class mail to the address of such Holder
appearing in the Certificate Register. The final distribution on each
Certificate will be made in like manner, but only upon presentment and surrender
of such Certificate at the Corporate Trust Office or such other location
specified in the notice to Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master Servicer shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(f) Except as otherwise provided in Section 10.01, whenever
the Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Certificates a notice to the effect that:
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(i) the Trustee expects that the final distribution with respect
to such Class of Certificates will be made on such Distribution Date
but only upon presentation and surrender of such Certificates at the
office of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from and after
the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
4.01(f) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, contact the remaining non-tendering Certificateholders concerning
surrender of their Certificates in the manner reasonably specified to the
Trustee by the Master Servicer in writing. The costs and expenses of maintaining
the funds in trust and of contacting such Certificateholders shall be paid out
of the assets remaining in the Trust Fund. If within one year after the second
notice any such Certificates shall not have been surrendered for cancellation,
the Master Servicer shall continue to hold any remaining funds for the benefit
of the non-tendering Certificateholders, and such Certificateholders shall
thereafter look solely to the Master Servicer for payment thereof. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Master Servicer as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(f).
(g) All distributions made in respect of the Class A-1
Certificates on each Distribution Date pursuant to Section 4.01(a) or 10.01
shall be deemed to have first been distributed from REMIC I to REMIC II in
respect of REMIC I Regular Interest A-1; all distributions made in respect of
the Class A-2 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest A-2; all distributions made in respect of
the Class PO Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest PO; all distributions made in respect of
the Class B-1 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest B-1; all distributions made in respect of
the Class B-2 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest B-2; all distributions made in respect of
the Class B-3 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest B-3; all distributions made in respect of
the Class B-4 Certificates on each Distribution Date pursuant to Section 4.01(a)
or
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10.01 shall be deemed to have first been distributed from REMIC I to REMIC I in
respect of REMIC I Regular Interest B-4; all distributions made in respect of
the Class B-5 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest B-5; all distributions made in respect of
the Class B-6 Certificates on each Distribution Date pursuant to Section 4.01(a)
or 10.01 shall be deemed to have first been distributed from REMIC I to REMIC II
in respect of REMIC I Regular Interest B-6; all distributions made in respect of
the Class A-XS Certificates on each Distribution Date pursuant to Section
4.01(a) or 10.01, and allocable to Component A1-XS, shall be deemed to have
first been distributed from REMIC I to REMIC II in respect of REMIC I Regular
Interest A-1; all distributions made in respect of the Class A-XS Certificates
on each Distribution Date pursuant to Section 4.01(a) or 10.01, and allocable to
Component A2-XS, shall be deemed to have first been distributed from REMIC I to
REMIC II in respect of REMIC I Regular Interest A-2; all distributions made in
respect of the Class A-XS Certificates on each Distribution Date pursuant to
Section 4.01(a) or 10.01, and allocable to Component B1-XS, shall be deemed to
have first been distributed from REMIC I to REMIC II in respect of REMIC I
Regular Interest B-1; all distributions made in respect of the Class A-XS
Certificates on each Distribution Date pursuant to Section 4.01(a) or 10.01, and
allocable to Component B2-XS, shall be deemed to have first been distributed
from REMIC I to REMIC II in respect of REMIC I Regular Interest B-2; all
distributions made in respect of the Class A-XS Certificates on each
Distribution Date pursuant to Section 4.01(a) or 10.01, and allocable to
Component B3-XS, shall be deemed to have first been distributed from REMIC I to
REMIC II in respect of REMIC I Regular Interest B-3. In each such case, if such
distribution on any such Class of REMIC II Certificates was a distribution of
interest and/or of principal, the corresponding distribution deemed to be made
on a REMIC I Regular Interest pursuant to the preceding sentence shall be deemed
also to be a distribution of interest and/or of principal. The actual
distributions made by the Trustee on each Distribution Date in respect of the
REMIC II Certificates pursuant to Sections 4.01(a) and/or 10.01 shall be deemed
to have been so made from the amounts deemed distributed in respect of the REMIC
I Regular Interests on such Distribution Date pursuant to this Section 4.01(g).
Notwithstanding the deemed distributions on the REMIC II Regular Interests
described in this Section 4.01(), actual distributions of funds from the
Distribution Account shall be made only in accordance with Section 4.01(a) or
Section 10.01, as applicable.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, the Trustee shall prepare and
forward by mail to each Holder of the Regular Certificates a statement as to the
distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such
Distribution Date to the Holders of Certificates of each such
Class allocable to principal;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of Certificates of each such
Class allocable to interest;
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(iii) the aggregate amount of compensation received by
the Master Servicer and the Trustee during the related Due
Period;
(iv) the aggregate amount of Payment Advances for each
Sub-Pool for such Distribution Date, the aggregate amount of
Payment Advances for each Sub- Pool reimbursed during the
calendar month preceding such Distribution Date and the
aggregate amount of unreimbursed Payment Advances for each
Sub-Pool at the
close of business on such Distribution Date;
(v) (a) the aggregate Stated Principal Balance of the
Mortgage Loans and any REO Properties in each Sub-Pool at the
close of business on such Distribution Date and the end of the
immediately preceding calendar month;
(vi) the number, aggregate principal balance, weighted
average remaining term to original maturity and weighted
average Mortgage Rate of the Mortgage Loans in each Sub-Pool
as of the related Due Date;
(vii) the number and aggregate Stated Principal Balance
of Mortgage Loans in each Sub-Pool that are (a) delinquent one
payment, (b) delinquent two payments, (c) delinquent three or
more payments, (d) as to which foreclosure proceedings have
been commenced and (e) with respect to which related Mortgagor
has filed for protection under applicable bankruptcy laws,
with respect to whom bankruptcy proceedings are pending or
with respect to whom bankruptcy protection is in force (it
being understood that for purposes of calculating the
information described in clauses (a), (b), and (c) above, a
Mortgage Loan is delinquent one payment if payment on such
Mortgage Loan is one calendar month past due on a contractual
basis, a Mortgage Loan is delinquent two payments if payment
on such Mortgage Loan is two calendar months past due on a
contractual basis and a Mortgage Loan is delinquent three
payments if payment on such Mortgage Loan is three calendar
months past due on a contractual basis, in each case as of the
end of the immediately preceding Prepayment Period);
(viii) with respect to any Mortgage Loan in each Sub-Pool
purchased by the Master Servicer pursuant to Section 3.16(c),
the loan number of such Mortgage Loan and the Stated Principal
Balance of such Mortgage Loan;
(ix) with respect to any Mortgage Loan in each Sub-Pool
that became an REO Property during the preceding calendar
month, the aggregate number of such Mortgage Loans and the
aggregate Stated Principal Balance of such Mortgage
Loans as of the date they became an REO Property;
(x) with respect to any Mortgage Loan in each Sub-Pool
that was an REO Property as of the last day of the preceding
calendar month, the aggregate
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number of such Mortgage Loans and the aggregate Stated
Principal Balance of such Mortgage Loans as of the last day of
such calendar month;
(xi) with respect to any REO Properties in each Sub-Pool
liquidated during the preceding calendar month, the aggregate
number of such Mortgage Loans, the aggregate Stated Principal
Balance of such Mortgage Loans and the aggregate amount of
Realized Losses incurred with respect to such Mortgage Loans
as of the date they became liquidated REO Properties;
(xii) the aggregate amount of Principal Prepayments made
during the related Prepayment Period by Sub-Pool;
(xiii) the aggregate amount of Realized Losses with
respect to each Sub- Pool incurred during the related
Prepayment Period and since the Closing Date (or, in the case
of Bankruptcy Losses allocable to interest, during the related
Due Period), separately identifying whether such Realized
Losses constituted Fraud Losses, Special Hazard Losses or
Bankruptcy Losses);
(xiv) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account or the
Distribution Account for such Distribution Date and since the
Closing Date;
(xv) the aggregate Certificate Balance of each such
Class of Certificates and the aggregate Certificate Notional
Amount of the Class XS Certificates, after giving effect to
the distributions, and allocations of Realized Losses and
Extraordinary Trust Fund Expenses, made on such Distribution
Date, separately identifying any reduction thereof due to
allocations of Realized Losses and Extraordinary Trust Fund
Expenses;
(xvi) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xvii) the Interest Distribution Amount in respect of each
such Class of Certificates (other than the Class PO
Certificates) for such Distribution Date (separately
identifying any reductions in the case of Subordinate
Certificates resulting from the allocation of Realized Losses
allocable to interest and Extraordinary Trust Fund Expenses on
such Distribution Date) and the respective portions thereof,
if any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date;
(xviii) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not
covered by payments by the Master Servicer pursuant to Section
3.24;
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(xix) the aggregate amount of Relief Act Interest
Shortfalls for such Distribution Date;
(xx) the then-applicable Bankruptcy Amount, Fraud Loss
Amount and Special Hazard Amount;
(xxi) the Pass-Through Rates applicable to the
Certificates for such Distribution Date and the immediately
succeeding Distribution Date;
(xxii) any amount of payments made with respect to a
Cross- Collateralization Event on a Prepayment Diversion
Event; and
(xxiii) any amount of interest shortfall allocated to
Class A-2 Certificates or Class XS Certificates with respect
to a Cross-Collaterlization Event.
In the case of information furnished pursuant to subclauses
(i) and (ii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
On each Distribution Date, the Trustee shall forward to the
Depositor, to each Holder of a Residual Certificate and to the Master Servicer,
a copy of the reports forwarded to the Regular Certificateholders on such
Distribution Date and a statement setting forth the amounts, if any, actually
distributed with respect to the Residual Certificates, respectively, on such
Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions
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as the Certificateholder may provide. For purposes of this Section 4.02, the
Trustee's duties are limited to the extent that the Trustee receives timely
reports as required from the Master Servicer.
The Trustee shall provide such other customary information as
the Trustee deems necessary or desirable, or which a Certificateholder
reasonably requests to enable Certificateholders to prepare their tax returns;
all such requested information to be provided at the expense of the
Certificateholder in accordance with reasonable and explicit directions as the
Certificateholder may provide.
On each Distribution Date, the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") cusip level factors for each Class of
Certificates as of such Distribution Date using a format and media mutually
acceptable to the Trustee and Bloomberg.
SECTION 4.03. Remittance Reports; Payment Advances.
(a) On the first Business Day following each Determination
Date, the Master Servicer shall deliver to the Trustee by electronic format (or
by such other means as the Master Servicer and the Trustee may agree from time
to time) a Remittance Report with respect to the related Distribution Date in
the file layout attached hereto as Exhibit G-1 with such changes as shall be
agreed to between the Master Servicer and the Trustee. For delivery on the same
date, the Master Servicer shall forward to the Trustee by overnight mail or
modem a computer readable magnetic tape or electronic file containing the
information set forth in such Remittance Report with respect to the related
Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer and
shall be entitled to rely conclusively on any such information provided by the
Master Servicer reasonably believed by it to be genuine and to have been signed
or presented by the Master Servicer.
(b) The amount of Payment Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (iii) with respect to each REO
Property, an amount equal to the excess, if any, of the Monthly Payments (with
each interest portion thereof net of the related Servicing Fee) that would have
been due on the related Due Date in respect of the Mortgage Loans, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Payment Advances, if any, to be made in respect of the
Mortgage Loans and REO Properties for the related Distribution Date either (i)
from its own funds or (ii) from the Collection Account, to the extent of funds
held therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this
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Section 4.03, used by the Master Servicer in discharge of any such Payment
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Payment Advances to be made by the Master Servicer with respect
to the Mortgage Loans and REO Properties. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Collection Account on or before any future Master Servicer Remittance Date to
the extent that the Available Distribution Amount for the related Distribution
Date (determined without regard to Payment Advances to be made on the Master
Servicer Remittance Date) shall be less than the total amount that would be
distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make Payment Advances. The Trustee will provide, pursuant to
Section 7.02, notice to the Master Servicer by facsimile by the close of
business on any Master Servicer Remittance Date in the event that the amount
remitted by the Master Servicer to the Trustee on such date is less than the
Payment Advances required to be made by the Master Servicer for the related
Distribution Date.
(c) The obligation of the Master Servicer to make such Payment
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Fund pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no
Payment Advance shall be required to be made hereunder by the Master Servicer if
such Payment Advance would, if made, constitute a Nonrecoverable Payment
Advance. The determination by the Master Servicer that it has made a
Nonrecoverable Payment Advance or that any proposed Payment Advance, if made,
would constitute a Nonrecoverable Payment Advance, shall be evidenced in writing
certified by a Servicing Officer to the Depositor and the Trustee on or before
the related Determination Date.
SECTION 4.04. Allocation of Extraordinary Trust Fund Expenses
and Realized Losses.
(a) Prior to each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determination made during the related Prepayment Period; (ii) whether and to the
extent to which such Realized Losses constitued Fraud Losses or Special Hazard
Losses; and (iii) the respective portion of such Realized Losses allocable to
interest and allocable to principal. Prior to each Determination Date, the
Master Servicer shall also determine as to each Mortgage Loan: (i) the total
amount of Realized Losses, if any, incurred in connection with any Deficient
Valuation made during the related Prepayment Period; and (ii) the total amount
of Realized Losses, if any, incurred in connection with any Debt Service
Reduction in respect of scheduled payments due during the related Due Period.
The information described in the two preceding sentences that is to be supplied
by the Master Servicer shall be evidenced by an Officers' Certificate delivered
to the Trustee by the Master Servicer prior to the
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Determination Date immediately following the end of (i) in the case of
Bankruptcy Losses allocable to interest, the Due Period during which any such
Realized Loss was incurred, and (ii) in the case of all other Realized Losses,
the Prepayment Period during which any such Realized Loss was incurred.
(b) All Realized Losses on the Mortgage Loans (other than
Excess Losses) and all Extraordinary Trust Fund Expenses shall be allocated on
each Distribution Date as follows: first, to the Class B-6 Certificates; second,
to the Class B-5 Certificates; third, to the Class B-4 Certificates; fourth, to
the Class B-3 Certificates; fifth, to the Class B-2 Certificates; sixth, to the
Class B-1 Certificates, in each case, until the Certificate Balance thereof has
been reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balance of the Subordinate Certificates to zero, all Realized Losses
and Extraordinary Trust Fund Expenses shall be allocated to the related Class A
Certificates and, with respect to Sub-Pool 2, to the Class PO Certificates on a
PRO RATA basis. To the extent of a Prepayment Diversion Event, Realized Losses
allocated to the Class B-6 Certificates shall be allocated to the Class B-6
Certificate's entitlement in Sub-Pool 2. Any Excess Losses attributable to any
Mortgage Loan shall be allocated among all the Certificates (other than the
Class XS Certificates) on a PRO RATA basis including in the event of a Cross-
Collateralization Event, to the extent of the Class A-2 Cross-Collateralization
Entitlement Amount and Class PO Cross-Collateralization Entitlement Amount and
in the event of any Prepayment Diversion Event, to the extent of the Class B-6
Certificates' entitlement to principal in Sub-Pool 2. Any allocation of a
Realized Loss to a Certificate will be made by reducing the Class Certificate
Balance thereof by the amount so allocated as of the Distribution Date in the
month following the calendar month in which such Realized Loss was incurred.
As used herein, an allocation of a Realized Loss on a "PRO RATA basis"
among two or more specified Classes of Certificates means an allocation on a PRO
RATA basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Class Certificate Balances
and after a Cross-Collateralization Event, the Class A-2 Cross-
Collateralization Entitlement Amount and Class PO Cross-Collateralization
Entitlement Amount and after a Prepayment Diversion Event, to the extent of the
Class B-6 Certificates' entitlement to principal in Sub-Pool 2 prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.
(c) On each Distribution Date, prior to the distributions
deemed to be made in respect of the REMIC I Regular Interests on such date
pursuant to Section 4.01(g), the Trustee shall, with respect to any Realized
Losses or Extraordinary Trust Fund Expenses allocated to any Class of
Certificates, allocate such Realized Losses or Extraordinary Trust Fund Expenses
to the REMIC I Regular Interest bearing the same alphanumeric designation as
such Class by reducing the Uncertificated Balance of such REMIC I Regular
Interest. All such reductions shall be deemed to be an allocation of Realized
Losses and Extraordinary Trust Fund Expenses.
SECTION 4.05. Commission Reporting.
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Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System
("XXXXX"), a Form 8-K with a copy of the statement to Certificateholders for
such Distribution Date as an exhibit thereto. Prior to January 30, 1999, the
Trustee shall file a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable and unless otherwise instructed by the Depositor. Prior to
March 30, 1999, the Trustee shall file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust Fund. The Depositor hereby grants
to the Trustee a limited power of attorney to execute and file each such
document on behalf of the Depositor. Such power of attorney shall continue until
the earlier of (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. At least three Business Days prior to filing any Form 8-K or Form 10-K
pursuant to this Section 4.05, the Trustee shall deliver a copy of such Form 8-K
or Form 10-K, as the case may be, to the Depositor.
SECTION 4.06. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in the Trust Fund.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-12. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and
delivered by the Trustee and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Certificate Registrar by manual
signature, and such certificate of authentication shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
(b) The Book-Entry Certificates shall initially be issued as
Certificates held by the Book-Entry Custodian or, if appointed to hold such
Certificates as provided below, the Depository and registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Trustee is hereby initially appointed as the Book-Entry
Custodian and hereby agrees to act as such in accordance herewith and in
accordance with the agreement that it has with the Depository authorizing it to
act as such.
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The Book-Entry Custodian may, and, if it is no longer qualified to act as such,
the Book-Entry Custodian shall, appoint, by a written instrument delivered to
the Depositor, the Master Servicer and, if the Trustee is not the Book-Entry
Custodian, the Trustee, any other transfer agent (including the Depository or
any successor Depository) to act as Book-Entry Custodian under such conditions
as the predecessor Book-Entry Custodian and the Depository or any successor
Depository may prescribe, provided that the predecessor Book-Entry Custodian
shall not be relieved of any of its duties or responsibilities by reason of any
such appointment of other than the Depository. If the Trustee resigns or is
removed in accordance with the terms hereof, the successor trustee or, if it so
elects, the Depository shall immediately succeed to its predecessor's duties as
Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) 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 Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of each of the Classes of the Book-Entry Certificates advise the
Trustee through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Book-Entry
Custodian or the Depository, as applicable, and the delivery of registration
instructions from the Depository for registration of transfer (which surrender
and delivery the Trustee shall use reasonable efforts to cause to occur), the
Trustee shall issue the Definitive Certificates. Such Definitive Certificates
will be issued in minimum denominations of $10,000, except that any beneficial
ownership that was represented by a Book-Entry Certificate in an amount less
than $10,000 immediately prior to the issuance of a Definitive Certificate shall
be issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate. None of the Depositor, the Master Servicer or the
Trustee shall be liable for any delay in the delivery of such instructions and
may
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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 Depository 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.
SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering, transferring and exchanging Certificates as
herein provided. The Certificate Registrar may appoint, by a written instrument
delivered to the Master Servicer and the Depositor, any other bank or trust
company to act as Certificate Registrar under such conditions as the predecessor
Certificate Registrar may prescribe, provided that the predecessor Certificate
Registrar shall not be relieved of any of its duties or responsibilities
hereunder by reason of such appointment. If the Trustee shall at any time not be
the Certificate Registrar, the Trustee shall have and maintain the right to
inspect the Certificate Register or to obtain a copy thereof at all reasonable
times, and to rely conclusively upon a certificate of the Certificate Registrar
as to the information set forth in the Certificate Register.
(b) No transfer of any Class B-4, Class B-5 or Class B-6
Certificate or interest therein shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. If a
transfer of any Definitive Certificate is to be made without registration under
the Securities Act (other than in connection with the initial issuance thereof
or a transfer thereof by the Depositor or one of its Affiliates), then the
Certificate Registrar shall refuse to register such transfer unless it receives
(and upon receipt, may conclusively rely upon) either: (i) a certificate from
such Certificateholder substantially in the form attached as Exhibit F-1 hereto
or such other certification reasonably acceptable to the Trustee and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit F-2A or Exhibit F-2B hereto or such other
certification reasonably acceptable to the Trustee; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Trustee or the Certificate Registrar in their respective capacities as
such), together with the written certification(s) as to the facts surrounding
such transfer from the Certificateholder desiring to effect such transfer and/or
such Certificateholder's prospective transferee on which such Opinion of Counsel
is based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify any Class of Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under this Agreement to permit the transfer of any Certificate or interest
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therein without registration or qualification. Any Certificateholder or
Certificate Owner desiring to effect such a transfer shall, and does hereby
agree to, indemnify the Depositor, the Trustee and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) In the case of any Class A-1, Class A-2, Class B-1, Class
B-2 or Class B-3 Certificate, any Person acting, directly or indirectly, on
behalf of any Plan subject to ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments) or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 shall be deemed to
have represented one of the following: (i) the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Depositor, the Master Servicer, the Trustee or the Trust
Fund to any obligation in addition to those undertaken in the Agreement; (ii)
the purchase of such Certificates by or on behalf of such Plan is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, will not subject the
Depositor, the Trustee, the Master Servicer or the Trust Fund to any obligation
in addition to those undertaken in the Agreement and the following conditions
are met: (a) the source of funds used to purchase such Certificates is an
"insurance company general account" (as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60), (b) the conditions set forth in
PTCE 95-60 have been satisfied and will continue to be satisfied and (c) there
is no Plan with respect to which the amount of such general account's reserves
and liabilities for contracts held by or on behalf of such Plan and all other
Plans maintained by the same employer (or any "affiliate" thereof, as defined in
PTCE 95-60) or by the same employee organization exceed 10% of the total of all
reserves and liabilities of such general account (as determined under PTCE
95-60) as of the date of the acquisition of such Certificates; (iii) the
purchase of such Certificates by or on behalf of such Plan is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, will not subject the
Depositor, the Trustee, the Master Servicer or the Trust Fund to any obligation
in addition to those undertaken in the Agreement and the following conditions
are met: (a) the purchaser is an "investment fund" described in PTCE 84-14, (b)
the conditions set forth in PTCE 84-14 have been satisfied and will continue to
be satisfied and (c) the purchase and holding of Certificates by or on behalf of
the purchaser are exempt under PTCE 84-14; or (iv) the purchase of such
Certificates by or on behalf of such Plan is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code, will not subject the Depositor, the Trustee, the
Master Servicer or the Trust Fund to any obligation in addition to those
undertaken in the Agreement and the following conditions are met: (a) the
investment is being made by an insurance company, insurance service or insurance
organization (an "Insurer") qualified to do business in the applicable state;
and (b) the Insurer has issued to the Plan a "guaranteed benefit policy" within
the meaning of Section 401(b)(2) of ERISA such that the assets of the Plan are
deemed to include such policy but are not deemed to include any assets of such
Insurer pursuant to Section 401(b)(2) of ERISA.
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In the case of any Class XS, Class PO, Class B-4, Class B-5, Class B-6
or Residual Certificate presented for registration in the name of any Plan
subject to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), any Person acting, directly or indirectly, on behalf of
any such Plan or any Person acquiring such Certificates with "Plan Assets" of a
Plan shall provide the Depositor, the Trustee, the Master Servicer and the Trust
Fund with either: (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Depositor, the Trustee, the Master Servicer and
the Trust Fund to the effect that the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, the Trustee, the Master Servicer or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Trustee,
the Master Servicer or the Trust Fund or (ii) in lieu of such Opinion of
Counsel, a certification in the form of Exhibit F-3 to this Agreement, which
provides that the purchase of such Certificates by or on behalf of such Plan is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code, will not subject
the Depositor, the Trustee, the Master Servicer or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement and
one of the following is met: (a) the source of funds used to purchase such
Certificates is an "insurance company general account" (as such term is defined
in Prohibited Transaction Class Exemption ("PTCE") 95-60), the conditions set
forth in PTCE 95-60 have been satisfied and will continue to be satisfied and
there is no Plan with respect to which the amount of such general account's
reserves and liabilities for contracts held by or on behalf of such Plan and all
other Plans maintained by the same employer (or any "affiliate" thereof, as
defined in PTCE 95-60) or by the same employee organization exceed 10% of the
total of all reserves and liabilities of such general account (as determined
under PTCE 95-60) as of the date of the acquisition of such Certificates; (b)
the purchaser is an "investment fund" described in PTCE 84- 14, the conditions
set forth in PTCE 84-14 have been satisfied and will continue to be satisfied
and the purchase and holding of such Certificates by or on behalf of the
purchaser are exempt under PTCE 84-14; or (c) the investment is being made by an
insurance company, insurance service or insurance organization (an "Insurer")
qualified to do business in the applicable state and the Insurer has issued to
the Plan a "guaranteed benefit policy" within the meaning of Section 401(b)(2)
of ERISA such that the assets of the Plan are deemed to include such policy but
are not deemed to include any assets of such Insurer pursuant to Section
401(b)(2) of ERISA. The Depositor, the Trustee, the Master Servicer and the
Trust Fund may rely upon such certification without further inquiry or
investigation.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale.
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The rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be
a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer
of any Ownership Interest in a Residual Certificate,
the Trustee shall require delivery to it, and shall
not register the Transfer of any Residual Certificate
until its receipt of, an affidavit and agreement (a
"Transfer Affidavit and Agreement," in the form
attached hereto as Exhibit H-1) from the proposed
Transferee, in form and substance satisfactory to the
Trustee, representing and warranting, among other
things, that such Transferee is a Permitted
Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the
subject of the proposed Transfer as a nominee,
trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains
its Ownership Interest in a Residual Certificate, it
will endeavor to remain a Permitted Transferee, and
that it has reviewed the provisions of this Section
5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible
Officer of the Trustee who is assigned to this
transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer
of an Ownership Interest in a Residual Certificate to
such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
agree (x) to require a Transfer Affidavit and
Agreement (in the form attached hereto as Exhibit
H-1) from any other Person to whom such Person
attempts to transfer its Ownership Interest in a
Residual Certificate and (y) not to transfer its
Ownership Interest unless it provides a Transferor
Affidavit (in the form attached hereto as Exhibit H-
2) to the Trustee stating that, among other things,
it has no actual knowledge that such other Person is
not a Permitted Transferee.
(E) Each Person holding or acquiring an
Ownership Interest in a Residual Certificate, by
purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is
a "pass-through interest holder" within the meaning
of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it
is, or is holding an
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Ownership Interest in a Residual Certificate on
behalf of, a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any
Residual Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the
Trustee as a condition to such registration. In addition, no
Transfer of a Residual Certificate shall be made unless the
Trustee shall have received a representation letter from the
Transferee of such Certificate to the effect that such
Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(d), then the last preceding
Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive
to the date of registration of such 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
5.02(d) or for making any payments due on such Certificate to
the holder thereof or for taking any other action with respect
to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become
a holder of a Residual Certificate in violation of the
restrictions in this Section 5.02(d) and to the extent that
the retroactive restoration of the rights of the holder of
such Residual Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the
Trustee shall have the right (but not the obligation), without
notice to the holder or any prior holder of such Residual
Certificate, to sell such Residual Certificate to a purchaser
selected by the Trustee on such terms as the Trustee may
choose. Such purported Transferee shall promptly endorse and
deliver each Residual Certificate in accordance with the
instructions of the Trustee. The proceeds of such sale, net of
the commissions (which may include commissions payable to the
Trustee or its Affiliates), expenses and taxes due, if any,
will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of the
Trustee, and the Trustee shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal
Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax
imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5)with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate
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investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Residual Certificate
having as among its record holders at any time any Person
which is a Disqualified Organization. Reasonable compensation
for providing such information may be accepted by the Trustee.
(v) The provisions of this Section 5.02(d) set forth
prior to this subsection (v) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Trustee at the expense of the party seeking to modify, add
to or eliminate any such provision the following:
(A) written notification from each Rating
Agency to the effect that the modification, addition
to or elimination of such provisions will not cause
such Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, in form and
substance satisfactory to the Trustee, to the effect
that such modification of, addition to or elimination
of such provisions will not cause the Trust Fund to
cease to qualify as a REMIC and will not cause the
Trust Fund to be subject to an entity-level tax
caused by the Transfer of any Residual Certificate to
a Person that is not a Permitted Transferee or a
Person other than the prospective transferee to be
subject to a REMIC-tax caused by the Transfer of a
Residual Certificate to a Person that is not a
Permitted Transferee.
(e) The Class XS, the Class PO, the Class B-4, the Class B-5,
the Class B-6 and the Residual Certificates shall initially be issued in, and
shall remain in, physical, definitive form.
(f) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(g) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
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(h) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Certificate Registrar in accordance with
its customary procedures.
(j) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in
January and June of each year, commencing January 1999.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
the same Class and of like denomination and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
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 as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.01 and for all other
purposes whatsoever, and none of the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar or any agent of any of them shall be affected
by notice to the contrary.
SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Certificate
to an Independent third party, the Depositor shall provide to the Trustee 10
copies of any private placement memorandum or other disclosure document used by
the Depositor in connection with the offer and sale of the Certificates. In
addition, if any such private placement memorandum or disclosure document is
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revised, amended or supplemented at any time following the delivery thereof to
the Trustee, the Depositor promptly shall inform the Trustee of such event and
shall deliver to the Trustee 10 copies of the private placement memorandum or
disclosure document, as revised, amended or supplemented. The Trustee shall
maintain at its Corporate Trust Office and shall make available free of charge
during normal business hours for review by any Holder of a Certificate or any
Person identified to the Trustee as a prospective transferee of a Certificate,
originals or copies of the following items: (i) in the case of a Holder or
prospective transferee of a Certificate, the private placement memorandum or
other disclosure document relating to the Certificates, in the form most
recently provided to the Trustee; and (ii) in all cases, (A) this Agreement and
any amendments hereof entered into pursuant to Section 12.01, (B) all monthly
statements required to be delivered to Certificateholders pursuant to Section
4.02 since the Closing Date, and all other notices, reports, statements and
written communications delivered to the Certificateholders pursuant to this
Agreement since the Closing Date, (C) all certifications delivered by a
Responsible Officer of the Trustee since the Closing Date pursuant to Section
11.01(i), (D) any and all Officers' Certificates delivered to the Trustee by the
Master Servicer since the Closing Date to evidence the Master Servicer's
determination that any Payment Advance was, or if made, would be a
Nonrecoverable Payment Advance and (E) any and all Officers' Certificates
delivered to the Trustee by the Master Servicer since the Closing Date pursuant
to Section 4.04(a). Copies and mailing of any and all of the foregoing items
will be available from the Trustee upon request at the expense of the person
requesting the same.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation, and the Master Servicer, or the Affiliate of the Master Servicer
that is sub-servicing the Mortgage Loans, will keep in full effect its
qualification as an approved conventional servicer for FHLMC or FNMA, in good
standing. The Depositor and the Master Servicer each will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
FHLMC or FNMA; and provided further that the Rating Agencies' ratings of the
Certificates of any Class in effect immediately prior to such merger or
consolidation will not be qualified, reduced or withdrawn as a result thereof
(as evidenced by a letter to such effect from the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others.
None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any
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action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Master Servicer or any such person against any breach of warranties,
representations or covenants made herein, or against any specific liability
imposed on the Master Servicer pursuant hereto, or against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Master Servicer and any
director, officer, employee or agent of the Depositor or the Master Servicer may
rely in good faith on any document of any kind which, PRIMA FACIE, is properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Master Servicer and any director, officer, employee or agent
of the Depositor or the Master Servicer shall be indemnified and held harmless
by the Trust Fund against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Depositor's or Master
Servicer's obligations under this Agreement or any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is incidental to its respective duties under this Agreement
and, in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights, the reasonable legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor and the Master Servicer
shall be entitled to be reimbursed therefor from the Collection Account as and
to the extent provided in Section 3.11, any such right of reimbursement being
prior to the rights of the Certificateholders to receive any amount in the
Collection Account.
SECTION 6.04. Limitation on Resignation of the Master
` Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the Master Servicer and delivered to the Trustee. No resignation of
the Master Servicer shall become effective until the Trustee or a successor
servicer shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
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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. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.
SECTION 6.05. Rights of the Depositor in Respect of the Master
Servicer.
The Master Servicer shall afford the Depositor and the
Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer in respect of its rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish to the
Depositor and the Trustee its, or to the extent it files consolidated financial
statements, an Affiliate's, most recent financial statements and such other
information relating to its capacity to perform its obligations under this
Agreement it possesses. To the extent such information is not otherwise
available to the public, the Depositor and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the Master
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies or (ii) pursuant to
any law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Trustee or the Trust Fund, and in either case, the Depositor or the Trustee, as
the case may be, shall use its best efforts to assure the confidentiality of any
such disseminated non-public information. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer under this Agreement or
exercise the rights of the Master Servicer under this Agreement; provided that
the Master Servicer shall not be relieved of any of its obligations under this
Agreement by virtue of such performance by the Depositor or its designee. The
Depositor shall not have any responsibility or liability for any action or
failure to act by the Master Servicer and is not obligated to supervise the
performance of the Master Servicer under this Agreement or otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein,
means any one of the following events:
(i) any failure by the Master Servicer to remit to the
Trustee for distribution to the Certificateholders any payment
(other than a Payment Advance required to be made from its own
funds on any Master Servicer Remittance Date pursuant to
Section 4.03) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for
a period of one Business Day after the date upon which written
notice of such failure (provided that the Depositor and the
Trustee hereby agree to give prompt written notice upon its
discovery of any such failure), requiring the same to be
remedied, shall have been given to the Master Servicer by the
Depositor or the Trustee (in which case, such notice shall be
provided by facsimile), or to the Master Servicer by the
Holders of Certificates entitled to at least 25% of the Voting
Rights; or
(ii) any failure on the part of the Master Servicer duly
to observe or perform in any material respect any other of the
covenants or agreements on the part of the Master Servicer
contained in the Certificates or in this Agreement which
continues unremedied for a period of 30 days after the earlier
of (i) the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Master Servicer by the Depositor or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the Holders
of Certificates entitled to at least 25% of the Voting Rights
and (ii) actual knowledge of such failure by a Servicing
Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in
an involuntary case under any present or future federal or
state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceeding, 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 90 days; 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 or similar proceedings of or relating to it or of
or relating to all or substantially all of its property; or
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(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) any failure of the Master Servicer to make any
Payment Advance on any Master Servicer Remittance Date
required to be made from its own funds pursuant to Section
4.03 which continues unremedied until 12:00 noon New York time
on the Business Day immediately following the Master Servicer
Remittance
Date.
If a Master Servicer Event of Default described in clauses (i) through (v) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee and
to the Trustee if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vi) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement 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 under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section,
and, without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Master Servicer, 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 Master Servicer agrees promptly (and in any event no later than
ten Business Days subsequent to such notice) to provide the Trustee with all
documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement, and to cooperate with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
under this Agreement, including, without limitation, the transfer within one
Business Day to the Trustee for administration by it of all cash amounts which
at the time shall be or should have been credited by the Master Servicer to the
Collection Account held by or on behalf of the Master Servicer, the Distribution
Account or any REO Account or Servicing Account held by or on behalf of the
Master Servicer or thereafter be received with respect to the Mortgage Loans or
any REO Property serviced by the Master Servicer (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Payment Advances or otherwise, and shall continue to be
entitled to the benefits of Section 6.03 notwithstanding any such termination).
For purposes of this Section 7.01, the Trustee shall not
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be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Asset-Backed Securities Trust Services Group has actual knowledge thereof or
unless written notice of any event which is in fact such a Master Servicer Event
of Default is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.12) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Payment Advances pursuant to Section 4.03; provided, however, that if the
Trustee is prohibited by law or regulation from obligating itself to make
advances regarding delinquent mortgage loans, then the Trustee shall not be
obligated to make Payment Advances pursuant to Section 4.03; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 7.01
shall not be considered a default by the Trustee as successor to the Master
Servicer hereunder. As compensation therefor, the Trustee shall be entitled to
the Servicing Fees and all funds relating to the Mortgage Loans to which the
Master Servicer would have been entitled if it had continued to act hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act or if it is prohibited by law from making
advances regarding delinquent mortgage loans or if the Holders of Certificates
entitled to at least 51% of the Voting Rights so request in writing to the
Trustee, promptly appoint, or petition a court of competent jurisdiction to
appoint, an established mortgage loan servicing institution having a net worth
of not less than $15,000,000 and whose appointment, as confirmed in writing by
each Rating Agency, will not result in a downgrade, qualification or withdrawal
of the ratings of any such Rating Agency on any Class of Certificates, as the
successor to the Master Servicer under this Agreement in the assumption of all
or any part of the responsibilities, duties or liabilities of the Master
Servicer under this Agreement. No appointment of a successor to the Master
Servicer under this Agreement shall be effective until the assumption by the
successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, 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 the Master Servicer as such hereunder. The Depositor, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Pending appointment of a
successor to the Master Servicer under this Agreement, the Trustee shall act in
such capacity as hereinabove provided.
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(b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from funds which are in the custody of the Master
Servicer, a trustee in bankruptcy or a federal bankruptcy court and should have
been the subject of such Remittance absent such prohibition (the "Stayed Funds")
and (ii) the Trustee is not prohibited by law from making such advance or
obligating itself to do so. Upon remittance of the Stayed Funds to the Trustee
or the deposit thereof in the Distribution Account by the Master Servicer, a
trustee in bankruptcy or a federal bankruptcy court, the Trustee may recover the
amount so advanced, without interest, by withdrawing such amount from the
Distribution Account; however, nothing in this Agreement shall be deemed to
affect the Trustee's rights to recover from the Master Servicer's own funds
interest on the amount of any such advance. If the Trustee at any time makes an
advance under this Subsection which it later determines in its good faith
judgment will not be ultimately recoverable from the Stayed Funds with respect
to which such advance was made, the Trustee shall be entitled to reimburse
itself for such advance, without interest, by withdrawing from the Distribution
Account or the Collection Account, out of amounts on deposit therein, an amount
equal to the portion of such advance attributable to the Stayed Funds.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses
appearing in the Certificate Register.
(b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.
SECTION 7.04. Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Master
Servicer Event of Default hereunder may waive such default or Master Servicer
Event of Default; PROVIDED, HOWEVER, that a default or Master Servicer Event of
Default under clause (i) or (vi) of Section 7.01 that remains uncured may be
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waived only by all of the Holders of the Regular Certificates; provided,
further, that a Master Servicer Event of Default may be waived only during the
ten (10) Business Days following the receipt by the Trustee of written notice of
an Event of Default. Upon any such waiver of a default or Master Servicer Event
of Default, such default or Master Servicer Event of Default shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder. No
such waiver shall extend to any subsequent or other default or Master Servicer
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, 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. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event
of Default, and after the curing of all such Master Servicer
Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee that conform to the requirements of
this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
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(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of
Holders of Certificates entitled to at least 25% of the Voting
Rights relating 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.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any
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 Opinion of Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon
the occurrence of a Master Servicer Event of Default (which
has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct
of such person's own affairs;
(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event
of Default hereunder and after the curing of all Master
Servicer Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate,
statement, instrument, opinion,
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report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so
by Holders of Certificates entitled to at least 25% of the
Voting Rights; 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 such Certificateholders,
the Trustee may require reasonable indemnity against such
expense, or liability from such Certificateholders as a
condition to taking any such action;
(vi) 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; and
(vii) The Trustee shall not be personally liable for any
loss resulting from the investment of funds held in the
Collection Account at the direction of the
Master Servicer pursuant to Section 3.12.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.13) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.
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SECTION 8.05. Trustee's Fees and Expenses.
The Trustee shall withdraw the Trustee's Fees on each
Distribution Date from the Distribution Account. The Trustee and any director,
officer, employee, attorney or agent of the Trustee shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses and disbursements incurred or made by the Trustee, including
the compensation and the expenses and disbursements of its agents and counsel,
in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement (including, without limitation, the performance of its
duties under Sections 7.01 and 7.02 hereof), other than any loss, liability or
expense (i) resulting from the Master Servicer's actions or omissions in
connection with this Agreement and the Mortgage Loans, (ii) that constitutes a
specific liability of the Trustee pursuant to Section 11.01(d) or (iii) any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or as a result of a breach of the
Trustee's obligations under Article XII hereof. The Master Servicer agrees to
indemnify the Trustee and any director, officer, employee, attorney or agent of
the Trustee from, and hold them harmless against, any loss, liability or expense
arising in respect of such Master Servicer's acts or omissions in connection
with this Agreement and the Mortgage Loans serviced by such Master Servicer.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Mortgage Loan Seller, the Master
Servicer or any Affiliate of the foregoing) 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 at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation or association publishes reports of
conditions 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 association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 unless 100% of the Certificateholders of each Class waive the
eligibility requirement.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders.
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Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor trustee by written instrument, in duplicate, which instrument shall
be delivered to the resigning Trustee and to the successor trustee. A copy of
such instrument shall be delivered to the Certificateholders and the Master
Servicer by the Depositor. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.
Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor 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 the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder, and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
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No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency to
such effect.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to the Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any
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particular act or acts are to be performed by the Trustee (whether as Trustee
hereunder or as successor to a defaulting Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust 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.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Appointment of Custodians.
The Trustee may appoint one or more Custodians to hold all or
a portion of the Mortgage Files as agent for the Trustee, and the expense of any
such Custodian shall be paid by the Trustee. Each Custodian shall be a
depository institution supervised and regulated by a federal or state banking
authority, shall have combined capital and surplus of at least $10,000,000,
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File and shall not be the Depositor or any Affiliate of the Depositor.
The Master Servicer shall not have any duty to verify that any such Custodian is
qualified to act as such in accordance with the preceding sentence. Each
Custodian shall be subject to the same obligations, standard of care, protection
and indemnities as would be imposed on, or would protect, the Trustee hereunder
in connection with the retention of Mortgage Files directly by the Trustee. The
appointment of one or more Custodians shall not relieve the Trustee from any of
its obligations hereunder, and the Trustee shall remain responsible for all acts
and omissions of any Custodian.
SECTION 8.12. Appointment of Office or Agency.
The Trustee will appoint an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates
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and this Agreement may be served.
SECTION 8.13. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of governing its
creation and existence;
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this
Agreement by the Trustee, will not violate the Trustee's charter or
bylaws or 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 agreement or other instrument to which it is a
party or which is applicable to it or any of its assets;
(iii) The Trustee has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by the Master Servicer and the Depositor, constitutes a valid,
legal and binding obligation of the Trustee, enforceable against the
Trustee in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, receivership, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally,
and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee;
(vi) No litigation is pending or, to the actual knowledge of
the Trustee, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith reasonable judgment, is likely to materially and adversely affect
either the ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
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ARTICLE IX
SPECIAL FORECLOSURE PROCEDURES
AT OPTION OF THE HOLDER OF THE MAJORITY
IN PERCENTAGE INTEREST IN THE CLASS B-4,
CLASS B-5 OR CLASS B-6 CERTIFICATES
SECTION 9.01. General.
(a) The terms and provisions of this Article IX shall become
operative only upon the express written consent of the Master Servicer, with
written notice of such consent delivered to the Trustee, and then only for so
long as the specific Class B-4, Class B-5 or Class B-6 Certificateholder to whom
consent was granted remains the Holder of a majority in Percentage Interest in
the Class B-4, Class B-5 or Class B-6 Certificates. In the event of any conflict
between the terms and conditions of this Article IX and the first paragraph of
Section 3.16(a), this Article IX shall control.
(b) Whenever used in this Article IX, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
AFFIRMATION: A written statement signed by the Holder of a
majority in Percentage Interest in the Class B-4, Class B-5 or Class B-6
Certificates, as applicable, and sent to the Master Servicer certifying such
Holder's Percentage Interest in the Class B-4, Class B-5 or Class B-6
Certificates, and affirming the terms of Section 9.08.
COLLATERAL ACCOUNT: The fund established and maintained
pursuant to Section 9.06 hereof.
COMMENCEMENT OF FORECLOSURE: The first official action
required under local law in order to commence foreclosure proceedings or to
schedule a trustee's sale under a deed of trust, including (i) in the case of a
mortgage or deed to secure debt, any filing or service of process necessary to
commence an action to foreclose or (ii) in the case of a deed of trust, the
posting, publishing, filing or delivery of a notice of sale, but not including
in either case any notice of default, notice of intent to foreclose or sell or
any other action prerequisite to the actions specified in (i) or (ii) above.
CURRENT APPRAISAL: With respect to any Subject Mortgage Loan
as to which the Directing Holder has made an Election to Delay Foreclosure or an
Election to Foreclose, an appraisal of such Mortgage Loan, based on an appraisal
of the related Mortgaged Property obtained by the Directing Holder at its
expense from an appraiser acceptable to the Master Servicer as nearly
contemporaneously as practicable to the time of the Directing Holder's election,
prepared based on the Master Servicer's customary requirements for such
appraisals, and which appraisal shall take into account estimated liquidation
expenses and carrying costs.
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DIRECTING HOLDER: The Holder of a majority in Percentage
Interest of the most subordinate outstanding Class of the Class B-4, Class B-5
or Class B-6 Certificates from the time that such Holder provides the
Affirmation to the Master Servicer and until such time as such Holder is no
longer a Holder of a majority in Percentage Interest in the Class B-4, Class B-5
or Class B-6 Certificates.
ELECTION TO DELAY FORECLOSURE: Any election by the Directing
Holder to delay the Commencement of Foreclosure, made in accordance with Section
9.03(b).
ELECTION TO FORECLOSE: Any election by the Directing Holder to
proceed with the Commencement of Foreclosure, made in accordance with Section
9.04(a).
FAIR MARKET VALUE: With respect to a Subject Mortgage Loan,
the fair market value of the related Mortgaged Property as determined pursuant
to the Current Appraisal.
REQUIRED COLLATERAL ACCOUNT BALANCE: As of any date of
determination, an amount equal to the aggregate of all amounts previously
required to be deposited in the Collateral Account pursuant to Section 9.03(d)
(after adjustment for all withdrawals and deposits pursuant to Section 9.03(e))
and Section 9.04(b) (after adjustment for all withdrawals and deposits pursuant
to Section 9.04(c)), reduced by all withdrawals therefrom pursuant to Section
9.03(g) and Section 9.04(d).
SUBJECT MORTGAGE LOAN: Any Mortgage Loan that comes into and
continues in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments pursuant to Section 3.07.
UPDATED CURRENT APPRAISAL: With respect to any Subject
Mortgage Loan as to which the Directing Holder has made an Election to Delay
Foreclosure and as to which no amount has been realized on such Subject Mortgage
Loan within six months from the time the Subject Mortgage Loan becomes
delinquent, an appraisal of such Mortgage Loan, based on an appraisal of the
related Mortgaged Property obtained by the Directing Holder at its expense from
an appraiser acceptable to the Master Servicer as nearly contemporaneously as
practicable to the time which the Directing Holder is obligated to purchase such
Subject Mortgage Loan pursuant to Section 9.03(g), prepared based on the Master
Servicer's customary requirements for such appraisals, and which appraisal shall
take into account estimated liquidation expenses and carrying costs.
(c) All capitalized terms not otherwise defined in this
Article IX shall have the meanings assigned elsewhere in this Agreement.
SECTION 9.02. Reports and Notices.
(a) In connection with the performance of its duties under
this Agreement relating to the realization upon defaulted Mortgage Loans, the
Master Servicer shall provide to the Directing Holder the following notices and
reports:
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(i) Upon reasonable request of the Directing Holder, with
respect to any Mortgage Loan listed as at least 30 days delinquent in
the statement provided to Certificateholders pursuant to Section 4.02
of this Agreement, the Master Servicer shall provide such information
as it may have in its possession or may reasonably obtain, the
reasonable out of pocket expenses of the Master Servicer in providing
such information to be paid promptly by the Directing Holder, upon
receipt of an invoice from the Master Servicer.
(ii) Prior to the Commencement of Foreclosure in connection
with any Subject Mortgage Loan, the Master Servicer shall provide the
Directing Holder with a notice of such proposed and imminent
foreclosure, stating the loan number and the aggregate
amount owing under such Mortgage Loan.
(b) If requested by the Directing Holder, the Master Servicer
shall make its servicing personnel available (during its normal business hours)
to respond to reasonable inquiries by the Directing Holder in connection with
any Subject Mortgage Loan identified in a report or notice under subsection
(a)(i) or (a)(ii) above which has been given to the Directing Holder; provided,
that (1) the Master Servicer shall only be required to provide information that
is readily accessible to its servicing personnel and is non-confidential and (2)
the Master Servicer shall not be required to provide any written information
under this subsection.
(c) The Remittance Reports prepared by the Master Servicer
pursuant to Section 4.03, and the statements to Certificateholders prepared by
the Trustee pursuant to Section 4.02, shall each include the following
additional information: (i) the number and aggregate unpaid principal balance of
Mortgage Loans as to which an Election to Delay Foreclosure has been made and
(ii) the number and aggregate unpaid principal balance of Mortgage Loans as to
which an Election to Foreclose has been made.
SECTION 9.03. Election to Delay Foreclosure Proceedings.
(a) In the event that the Master Servicer does not receive
written notice of the Directing Holder's election pursuant to subsection (b)
below within 24 hours of transmission of the notice provided by the Master
Servicer under Section 9.02(a)(ii), the Master Servicer shall proceed with the
Commencement of Foreclosure in respect of such Subject Mortgage Loan in
accordance with its normal foreclosure policies without additional notice to the
Directing Holder. Any foreclosure that has been initiated may be discontinued if
the Subject Mortgage Loan has been brought current (including the payment to the
Collateral Account of all related Payment Advances and Servicing Advances) or if
a refinancing or prepayment occurs pursuant to which the Subject Mortgage Loan
is brought current (including the payment of all related Payment Advances and
Servicing Advances), without notice to the Directing Holder.
(b) In connection with any Subject Mortgage Loan with respect
to which a notice under Section 9.02(a)(ii) has been given to the Directing
Holder, the Directing Holder may elect, for reasonable cause as determined by
the Directing Holder, to instruct the Master Servicer
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to delay Commencement of Foreclosure until such time as the Directing Holder
determines that the Master Servicer may proceed with Commencement of
Foreclosure. Such election must be evidenced by written notice received by the
Master Servicer within 24 hours of transmission of the notice provided by the
Master Servicer under Section 9.02(a)(ii), except that such 24 hour period shall
be extended for a reasonable period, not to exceed four Business Days if the
Directing Holder requests additional information related to such foreclosure or
such Subject Mortgage Loan, to permit the review of such additional information.
(c) With respect to any Subject Mortgage Loan as to which the
Directing Holder has made an Election to Delay Foreclosure, the Directing Holder
shall obtain a Current Appraisal as soon as practicable, and shall provide the
Master Servicer with a copy of such Current Appraisal. With respect to any
Subject Mortgage Loan as to which the Directing Holder has made an Election to
Delay Foreclosure and as to which no amount has been realized on such Subject
Mortgage Loan within six months from the time the Subject Mortgage Loan becomes
delinquent, the Directing Holder shall obtain an Updated Current Appraisal and
shall provide the Master Servicer with a copy of such Updated Current Appraisal.
(d) Within two Business Days of making any Election to Delay
Foreclosure, the Directing Holder shall remit to the Master Servicer, for
deposit in the Collateral Account, an amount, as calculated by the Master
Servicer, equal to the sum of (1) 125% of the Fair Market Value determined
pursuant to the Current Appraisal referred to in subsection (c) above (or, if
such Current Appraisal has not yet been obtained, the Master Servicer's estimate
thereof, in which case the required deposit under this subsection shall be
adjusted upon obtaining such Current Appraisal) and (2) three months' interest
on the Subject Mortgage Loan at the applicable Mortgage Rate. If any Election to
Delay Foreclosure extends for a period in excess of three months (such excess
period being referred to herein as the "Excess Period"), the Directing Holder
shall remit by wire transfer in advance to the Master Servicer for deposit in
the Collateral Account the amount of each additional month's interest, as
calculated by the Master Servicer, equal to interest on the Mortgage Loan at the
applicable Mortgage Rate for the Excess Period. Nothing contained in this
Article IX shall alter the Master Servicer's obligation to make Payment Advances
pursuant to Section 4.03.
(e) With respect to any Subject Mortgage Loan as to which the
Directing Holder has made an Election to Delay Foreclosure, the Master Servicer
may withdraw from the Collateral Account from time to time amounts necessary to
reimburse the Master Servicer for all Payment Advances and Servicing Advances
thereafter made by the Master Servicer in accordance with this Agreement. To the
extent that the amount of any Servicing Advance is determined by the Master
Servicer based on estimated costs, and the actual costs are subsequently
determined to be higher than the estimate, the Master Servicer may withdraw the
additional amount from the Collateral Account and if the actual costs are
determined to be lower than such estimate, the Master Servicer shall deposit the
amount of such difference into the Collateral Account. In the event that the
Subject Mortgage Loan is brought current by the Mortgagor and the foreclosure
action is discontinued, the amounts so withdrawn from the Collateral Account by
the Master Servicer as reimbursement for Payment Advances and Servicing Advances
shall be redeposited therein by the Master Servicer and the Master Servicer
shall be reimbursed as otherwise provided in this
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Agreement. Except as provided in the two preceding sentences, amounts withdrawn
from the Collateral Account to cover Payment Advances and Servicing Advances
shall not be redeposited therein or otherwise reimbursed to the Directing
Holder; however, the Master Servicer waives any right to reimbursement for such
amounts under any other provision of this Agreement. If and when any such
Subject Mortgage Loan is brought current by the Mortgagor (including the payment
to the Collateral Account of all related Payment Advances and Servicing
Advances), all amounts remaining in the Collateral Account in respect of such
Subject Mortgage Loan (after adjustment for all withdrawals and deposits
pursuant to this subsection) shall be released to the Directing Holder.
(f) With respect to any Subject Mortgage Loan as to which the
Directing Holder has made an Election to Delay Foreclosure, the Master Servicer
shall continue to service the Subject Mortgage Loan in accordance with the terms
of this Agreement (other than the delay in Commencement of Foreclosure as
provided herein). If and when the Directing Holder shall notify the Master
Servicer that it believes that it is appropriate to do so, the Master Servicer
shall proceed with the Commencement of Foreclosure.
(g) Upon the occurrence of a liquidation of a defaulted
Mortgage Loan or the disposition of a REO Property with respect to any Subject
Mortgage Loan, in either case as to which the Directing Holder made an Election
to Delay Foreclosure, the Master Servicer shall calculate the amount, if any, by
which the Fair Market Value determined pursuant to the Current Appraisal
obtained under subsection (c) above exceeds the Liquidation Proceeds for the
related Mortgage Loan or REO Property, and the Master Servicer shall withdraw
the amount of such excess from the Collateral Account, shall remit the same to
the Collection Account and in its capacity as Master Servicer shall apply such
amount as additional Liquidation Proceeds pursuant to this Agreement. If the
Liquidation Proceeds for such Mortgage Loan or REO Property exceeds the Fair
Market Value determined pursuant to the Current Appraisal obtained under
subsection (c) above, the Master Servicer shall deposit immediately such excess
into the Collection Account as additional Liquidation Proceeds pursuant to this
Agreement. After making any such withdrawal as provided in this subsection (g),
all amounts remaining in the Collateral Account in respect of such Subject
Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
subsection (e)) shall be released to the Directing Holder. If within six months
of the time the Subject Mortgage Loan becomes delinquent, no amount has been
realized on the Subject Mortgage Loan, the Directing Holder shall purchase the
Mortgage Loan from the Trust Fund at a purchase price equal to the greater of
(i) the Fair Market Value shown on the Current Appraisal determined pursuant to
subsection (c) above or (ii) the Fair Market Value shown on the Updated Current
Appraisal determined pursuant to subsection (c) above. The Master Servicer shall
first apply amounts on deposit in the Collateral Account towards such purchase
price. Any shortfall shall be paid by the Directing Holder and any excess will
be returned to it. The Master Servicer shall remit the amount of such purchase
price to the Collection Account.
SECTION 9.04. Election to Commence Foreclosure Proceedings.
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(a) In connection with any Subject Mortgage Loan identified
under Section 9.02(a)(i), the Directing Holder may elect, for reasonable cause
as determined by the Directing Holder, to instruct the Master Servicer to
proceed with Commencement of Foreclosure as soon as practicable.
(b) Within two Business Days of making any Election to
Foreclose, the Directing Holder shall remit to the Master Servicer, for deposit
in the Collateral Account, an amount, as calculated by the Master Servicer,
equal to the sum of (1) 125% of the Stated Principal Balance of the Subject
Mortgage Loan and (2) three months' interest on the Subject Mortgage Loan at the
applicable Mortgage Rate. If and when any such Subject Mortgage Loan is brought
current (including the payment to the Collateral Account of all related Payment
Advances and Servicing Advances) by the Mortgagor, all amounts in the Collateral
Account in respect of such Subject Mortgage Loan shall be released to the
Directing Holder.
(c) With respect to any Subject Mortgage Loan as to which the
Directing Holder has made an Election to Foreclose, the Master Servicer shall
continue to service such Subject Mortgage Loan in accordance with the terms of
this Agreement (other than to proceed with the Commencement of Foreclosure as
provided herein). In connection therewith, the Master Servicer shall have the
same rights to make withdrawals for related Payment Advances and Servicing
Advances from the Collateral Account as are provided under Section 9.03(e), and
the Master Servicer shall make reimbursements thereto to the limited extent
provided under such subsection. The Master Servicer shall not be required to
proceed with the Commencement of Foreclosure if (i) the same is stayed as a
result of the Mortgagor's bankruptcy or is otherwise barred by applicable law,
or to the extent that all legal conditions precedent thereto have not yet been
complied with or (ii) the Master Servicer reasonably determines that such
foreclosure might result in liability to the Master Servicer, unless the
Directing Holder provides, at such time, a general indemnity to the Master
Servicer with respect to any such liability or (iii) the Master Servicer
believes there is a breach of representations or warranties which may result in
a repurchase or substitution of such Mortgage Loan or (iv) the Master Servicer
reasonably believes the Mortgaged Property may be contaminated with or affected
by hazardous wastes or hazardous substances. Any foreclosure that has been
initiated may be discontinued if the Subject Mortgage Loan has been brought
current (including the payment to the Collateral Account of all related Payment
Advances and Servicing Advances) or if a refinancing or prepayment occurs
pursuant to which the Subject Mortgage Loan is brought current (including the
payment to the Collateral Account of all related Payment Advances and Servicing
Advances), without notice to the Directing Holder. If and when any such Subject
Mortgage Loan is brought current by the Mortgagor (including the payment to the
Collateral Account of all related Payment Advances and Servicing Advances), all
amounts remaining in the Collateral Account in respect of such Subject Mortgage
Loan (after adjustment for all withdrawals and deposits pursuant to this
subsection) shall be released to the Directing Holder.
(d) Upon the occurrence of a liquidation of a defaulted
Mortgage Loan or the disposition of a REO Property, in either case with respect
to any Subject Mortgage Loan as to which the Directing Holder made an Election
to Foreclose and as to which the Master Servicer
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proceeded with the Commencement of Foreclosure in accordance with subsection (c)
above, the Master Servicer shall calculate the amount, if any, by which the
Stated Principal Balance of such Subject Mortgage Loan exceeds the Liquidation
Proceeds for the related Mortgage Loan or REO Property, and the Master Servicer
shall withdraw the amount of such excess from the Collateral Account, shall
remit the same to the Collection Account and in its capacity as Master Servicer
shall apply such amount as additional Liquidation Proceeds pursuant to this
Agreement. After making any such withdrawal or deposit as provided in this
subsection (d), all amounts remaining in the Collateral Account in respect of
such Subject Mortgage Loan shall be released to the Directing Holder.
SECTION 9.05. Termination.
With respect to all Subject Mortgage Loans included in the
Trust Fund, the Directing Holder's rights to make any Election to Delay
Foreclosure or any Election to Foreclose and the Master Servicer's obligations
under Section 9.02 shall terminate upon the earliest of (i) such time as the
Certificate Balance of the Class B-4, Class B-5 or Class B-6 Certificates, as
applicable, have been reduced to zero, (ii) the termination of this Agreement or
(iii) such time as the Directing Holder ceases to be a Holder of a majority in
Percentage Interest of the most subordinate outstanding Class of the Class B-4,
Class B-5 or Class B-6 Certificates. Except as set forth above, this Article IX
of this Agreement and the respective rights, obligations and responsibilities of
the Directing Holder and the Master Servicer hereunder shall terminate and be of
no further force and effect upon the final liquidation of the last Subject
Mortgage Loan as to which the Directing Holder made any Election to Delay
Foreclosure or any Election to Foreclose and the withdrawal of all remaining
amounts in the Collateral Account as provided herein.
SECTION 9.06. Collateral Account.
Upon receipt from the Directing Holder of the initial amount
required to be deposited in the Collateral Account pursuant to Section 9.03(d)
or Section 9.04(b), the Master Servicer shall establish and maintain as a
separate Eligible Account (the "Collateral Account"), entitled "Wilshire
Servicing Corporation, as Master Servicer, for the benefit of the registered
Holders of Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1998-WFC1." Amounts in the Collateral Account shall
continue to be the property of the Directing Holder, subject to the first
priority security interest granted hereunder for the benefit of the
Certificateholders, until withdrawn from the Collateral Account pursuant to
Section 9.03 or Section 9.04 hereof.
Upon the termination of this Article IX of this Agreement
pursuant to Section 9.05 hereof, the Master Servicer shall distribute to the
Directing Holder all amounts remaining in the Collateral Account together with
any investment earnings thereon.
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The Collateral Account shall not be an asset of the Trust Fund
and, for federal income tax purposes, shall be owned by the Directing Holder.
For purposes of determining whether a Payment Advance
constitutes a Nonrecoverable Payment Advance, Liquidation Proceeds shall be
deemed to include any amounts ultimately recoverable from the Collateral Account
or, to the extent of any shortfall described in
Section 9.09, from the Directing Holder.
SECTION 9.07. Collateral Account Permitted Investments.
The Master Servicer shall, at the written direction of the
Directing Holder, invest the funds in the Collateral Account in Permitted
Investments. Such direction shall not be changed more frequently than quarterly.
In the absence of any direction, the Master Servicer shall invest funds in the
Collateral Account in accordance with the definition of Permitted Investments
herein in its discretion.
All income and gain realized from any investment as well as
any interest earned on deposits in the Collateral Account (net of any losses on
such investments) and any payments of principal made in respect of any Permitted
Investment shall be deposited in the Collateral Account upon receipt. All costs
associated with the purchase and sale of Collateral Account Permitted
Investments shall be borne by the Directing Holder. The Directing Holder shall
deposit in the Collateral Account the amount of any loss incurred in respect of
any such Permitted Investments made with funds in such Collateral Account
immediately upon realization of such loss. The Master Servicer shall
periodically (but not more frequently than monthly) distribute to the Directing
Holder upon request an amount of cash, to the extent cash is available therefor
in the Collateral Account, equal to the amount by which the balance of the
Collateral Account, after giving effect to all other distributions to be made
from the Collateral Account on such date, exceeds the Required Collateral
Account Balance. Any amounts so distributed shall be released from the lien and
security interest created pursuant of Section 9.08 of this Agreement.
SECTION 9.08. Grant of Security Interest.
The Directing Holder hereby grants to the Master Servicer for
the benefit of the Certificateholders a security interest in and lien on all of
the Directing Holder's right, title and interest, whether now owned or hereafter
acquired, in and to: (1) the Collateral Account, (2) all amounts deposited in
the Collateral Account and Permitted Investments in which such amounts are
invested (and the distributions and proceeds of such investments) and (3) all
cash and non-cash proceeds of any of the foregoing, including proceeds of the
voluntary or involuntary conversion thereof (all of the foregoing collectively,
the "Collateral").
The Directing Holder hereby acknowledges the lien on and
security interest in the Collateral for the benefit of the Certificateholders.
The Directing Holder shall take all actions requested by the Master Servicer as
may be reasonably necessary to perfect the security interest created under this
Section 9.08 of this Agreement in the Collateral and cause it to be prior to all
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other security interests and liens, including the execution and delivery to the
Master Servicer for filing of appropriate financing statements in accordance
with applicable law. Upon receipt of duly filed financing statements, the Master
Servicer shall file appropriate continuation statements, or appoint an agent on
its behalf to file such statements, in accordance with applicable law.
SECTION 9.09. Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Account
at any time are insufficient to cover any withdrawals therefrom that the Master
Servicer is then entitled to make hereunder, the Directing Holder shall be
obligated to pay such amounts to the Master Servicer immediately upon demand.
Such obligation shall constitute a general obligation of the Directing Holder.
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ARTICLE X
TERMINATION
XXXXXXX 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx or Liquidation of
All Mortgage Loans.
Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) the purchase by the Master Servicer of all Mortgage Loans and each
REO Property remaining in the Trust Fund at a price (the "Termination Price")
equal to the greater of (A) the aggregate Purchase Price of all the Mortgage
Loans included in the Trust Fund, plus the appraised value of each REO Property,
if any, included in the Trust Fund, such appraisal to be conducted by an
appraiser mutually agreed upon by such Holder and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of the Trust Fund (as determined by the Master Servicer and the Trustee,
as of the close of business on the third Business Day next preceding the date
upon which notice of any such termination is furnished to Certificateholders
pursuant to the third paragraph of this Section 10.01) and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in the Trust Fund; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof.
The Master Servicer shall have the right to purchase all of
the Mortgage Loans and each REO Property remaining in the Trust Fund pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Master Servicer may elect to
purchase all of the Mortgage Loans and each REO Property remaining in the Trust
Fund pursuant to clause (i) above only if the aggregate Stated Principal Balance
of the Mortgage Loans and each REO Property remaining in the Trust Fund after
taking into account all payments made in respect thereof through the last day of
the month preceding such date is less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders mailed (a) in the event such notice is
given in connection with the purchase of the Mortgage Loans and each REO
Property by the Master Servicer, not earlier than the 15th day and not later
than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
specifying (i) the Distribution Date upon which
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the Trust Fund will terminate and the final payment of the Certificates will be
made upon presentation and surrender of Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment, (iii)
that no interest shall accrue in respect of the Certificates from and after the
Interest Accrual Period relating to the final Distribution Date therefor and
(iv) that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee. The Trustee shall give such notice to
the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given in connection with the
purchase of all of the Mortgage Loans and each REO Property remaining in the
Trust Fund by the Master Servicer, the Master Servicer shall deliver to the
Trustee for deposit in the Distribution Account not later than the last Business
Day of the month next preceding the month of the final distribution on the
Certificates an amount in immediately available funds equal to the
above-described purchase price. Upon certification to the Trustee by a Servicing
Officer of the making of such final deposit, the Trustee shall promptly release
to the Master Servicer the Mortgage Files for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
10.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, contact the remaining related non-tendering Certificateholders concerning
surrender of their Certificates in the manner reasonably specified to the
Trustee by the Master Servicer in writing. The costs and expenses of maintaining
the funds in trust and of contacting such Certificateholders shall be paid out
of the assets remaining in the trust funds. If within two years after the second
notice any such Certificates shall not have been surrendered for cancellation,
the Trustee shall pay to the Master Servicer all amounts distributable to the
Holders thereof and the Master Servicer shall thereafter hold such amounts for
the benefit of such Holders. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust or by the Master Servicer as a
result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 10.01.
Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.
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SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in the Trust
Fund pursuant to Section 10.01, the Trust Fund shall be terminated in accordance
with the following additional requirements:
(i) The Trustee shall specify the first day in the
90-day liquidation period in a statement attached to the Trust
Fund's final Tax Return pursuant to Treasury regulation
Section 1.860F-1 and shall satisfy all requirements of a
qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Master Servicer or the
Depositor, as applicable;
(ii) During such 90-day liquidation period, and at or
prior to the time of making of the final payment on the
Certificates, the Trustee shall sell all of the assets of the
Trust Fund to the Master Servicer for cash; and
(iii) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or
cause to be distributed or credited, to the Holders of the
applicable Residual Certificates all cash on hand in the Trust
Fund (other than cash retained to meet claims), and the Trust
Fund shall terminate at that
time.
(b) At the expense of the requesting party (or, if the Trust
Fund is being terminated as a result of the occurrence of the event described in
clause (ii) of the first paragraph of Section 10.01, at the expense of the
Trustee without the right of reimbursement from the Trust Fund), the Master
Servicer shall prepare the documentation required in connection with the
adoption of a plan of liquidation of a Trust Fund pursuant to this Section
10.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
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ARTICLE XI
REMIC PROVISIONS
SECTION 11.01. REMIC Administration.
(a) The Trustee shall elect to treat each of REMIC I and REMIC
II as a REMIC under the Code and, if necessary, under applicable state law. Each
such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are
issued.
(b) The REMIC I Regular Interests are hereby designated as
"regular interests" (within the meaning of Section 860G(a)(1) of the Code), and
the Class R-I Certificates are hereby designated as the single class of
"residual interests" (within the meaning of Section 860G(a)(2) of the Code), in
REMIC I. The Class A-1, Class A-2, Class XS, Class PO, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, together with
Component A1-XS, Component A2-XS, Component B1-XS, Component B2-XS and Component
B3-XS are hereby designated as "regular interests" (within the meaning of
Section 860G(a)(1) of the Code), and the Class R-II Certificates are hereby
designated as the single class of "residual interests" (within the meaning of
Section 860G(a)(2) of the Code), in REMIC II. Neither the Master Servicer or the
Trustee shall, to the extent within the control of such Person, create or permit
the creation of any other "interests" in REMIC I or REMIC II (within the meaning
of Treasury regulation Section 1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the "Startup Day"
of each of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the
Code.
(d) The Depositor shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any costs and expenses incurred by
the Trustee, any professional fees or any administrative or judicial proceedings
with respect to the Trust Fund that involve the Internal Revenue Service or
state tax authorities), other than the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Trustee, as agent for the tax
matters person of each of REMIC I and REMIC II, shall (i) act on behalf of each
of REMIC I and REMIC II in relation to any tax matter or controversy involving
either of REMIC I or REMIC II and (ii) represent each of REMIC I and REMIC II in
any administrative or judicial proceeding relating to an examination or audit by
any governmental taxing authority with respect thereto. The Plurality Residual
Certificateholders as to the applicable tax year shall be designated, in the
manner provided under Treasury regulations section 1.860F-4(d) and temporary
Treasury regulations section 301.6231(a)(7)-IT, as the tax matters person of
each of REMIC I and REMIC II. By their acceptance thereof, the holder of the
Plurality Residual Certificateholders as to the applicable tax year hereby
agrees to irrevocably appoint the Trustee or an Affiliate as its agent to
perform all of the duties of the tax matters person for each of REMIC I and
REMIC II.
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(e) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of the REMICs created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article.
(f) The Trustee shall perform on behalf of each of REMIC I and
REMIC II 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, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each of REMIC I and REMIC II.
The Master Servicer shall provide on a timely basis to the Trustee such
information with respect to the assets of each of REMIC I and REMIC II,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Depositor shall provide or cause to be
provided to the Trustee, within ten (10) days after the Closing Date, all
information or data that the Trustee reasonably determines to be relevant for
tax purposes as to the valuations and issue prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flow of the Certificates.
(g) The Trustee shall take such action as are reasonably
within the Trustee's control and the scope of its duties more specifically set
forth herein as shall be necessary to create or maintain the status of the
REMICs created hereunder as REMICs under the REMIC Provisions (and the Master
Servicer shall assist it, to the extent reasonably requested by it). The Trustee
shall not knowingly or intentionally take any action, cause either of REMIC I or
REMIC II 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 either of REMIC I or REMIC II as a REMIC or
(ii) result in the imposition of a tax upon either of REMIC I or REMIC II
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee has received an Opinion of Counsel, addressed to the Trustee
(at the expense of the party seeking to take such action but in no event at the
expense of the Trustee) to the effect that the contemplated action will not,
with respect to the REMICs created hereunder, endanger such status or result in
the imposition of such a tax, nor shall the Master Servicer take or fail to take
any action (whether or not authorized hereunder) as to which the Trustee has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action. In
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addition, prior to taking any action with respect to either of REMIC I or REMIC
II or the assets of either of REMIC I or REMIC II, or causing either of REMIC I
or REMIC II to take any action, which is not expressly permitted under the terms
of this Agreement, the Master Servicer will consult with the Trustee or its
designee, in writing, with respect to whether such action could cause an Adverse
REMIC Event to occur with respect to either of REMIC I or REMIC II, and the
Master Servicer shall not take any such action or cause either of REMIC I or
REMIC II to take any such action as to which the Trustee has advised it in
writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At all times as may be
required by the Code, the Trustee shall not cause any of the assets of the
REMICs created hereunder to fail to be "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(h) In the event that any tax is imposed on "prohibited
transactions" of the REMICs created hereunder as defined in Section 860F(a)(2)
of the Code, on the "net income from foreclosure property" of the REMICs as
defined in Section 860G(c) of the Code, on any contributions to the REMICs after
the Startup Day therefor pursuant to Section 860G(d) of the Code, or any other
tax is imposed by the Code or any applicable provisions of state or local tax
laws, such tax shall be charged (i) to the Trustee pursuant to Section 11.03
hereof, if such tax arises out of or results from a breach by the Trustee of any
of its obligations under this Article XI, (ii) to the Master Servicer pursuant
to Section 11.03 hereof, if such tax arises out of or results from a breach by
the Master Servicer of any of its obligations under Article III or this Article
XI, or otherwise (iii) against amounts on deposit in the Distribution Account
and shall be paid by withdrawal therefrom.
(i) On or before April 15 of each calendar year, commencing
April 15, 1999, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article XI.
(j) The Trustee and the Master Servicer shall, for federal
income tax purposes, maintain books and records with respect to each of REMIC I
and REMIC II on a calendar year and on an accrual basis.
(k) Following the Startup Day, the Trustee shall not accept
any contributions of assets to either of REMIC I or REMIC II other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the REMICs will not cause either of
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject either of REMIC I or REMIC II to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(l) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which either of REMIC I or REMIC II will receive a fee
or other compensation for services
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nor permit either of REMIC I or REMIC II to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
SECTION 11.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of either of REMIC I or REMIC II (iii)
the termination of either of REMIC I or REMIC II pursuant to Article X of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement), nor
acquire any assets for either of REMIC I or REMIC II (other than REO Property
acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any
investments in the Collection Account or the Distribution Account for gain, nor
accept any contributions to either of REMIC I or REMIC II after the Closing Date
(other than a Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee) that such sale, disposition, substitution, acquisition or contribution
will not (a) affect adversely the status of either of REMIC I or REMIC II as a
REMIC or (b) cause either of REMIC I or REMIC II to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
SECTION 11.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a
breach of the Trustee's covenants set forth in this Article XI.
(b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article XI.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
This Agreement may be amended from time to time by the
parties hereto without the consent of any of the Certificateholders, (i) to cure
any ambiguity or defect, (ii) to correct, modify or supplement any provisions
herein (including to give effect to the expectations of Certificateholders), or
(iii) to make any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder. No amendment shall be deemed to adversely
affect in any material respect the interests of any Certificateholder who shall
have consented thereto, and no Opinion of Counsel shall be required to address
the effect of any such amendment on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of Holders of
Certificates entitled to at least 66% of the Voting Rights for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (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, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 12.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on the Trust Fund pursuant to the REMIC
Provisions or cause the Trust Fund to fail to qualify as a REMIC
at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
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It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer servicing the larger aggregate principal amount
of Mortgage Loans and at the expense of the Certificateholders, but only upon
direction of the Trustee accompanied by an Opinion of Counsel (at the expense of
the Trust Fund) to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any 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.
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No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 12.04. 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.
SECTION 12.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Finance Group (facsimile number (000) 000-0000), or such
other address or facsimile number as may hereafter be furnished to the other
parties hereto in writing by the Depositor, (b) in the case of the Master
Servicer, 0000 Xxxxx Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, Attention: Mr.
Xxxxxx Xxxxx (facsimile number: (000) 000-0000), or such other address or
facsimile number as may hereafter be furnished to the other parties hereto in
writing by the Master Servicer and (c) in the case of the Trustee, at the
Corporate Trust Office (facsimile number (000) 000-0000), or such other address
or facsimile number as may hereafter be furnished to the other parties hereto in
writing by the Trustee. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required
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to be telecopied hereunder also shall be mailed to the appropriate party in the
manner set forth above.
SECTION 12.06. 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 12.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of
Default that has not been cured or waived;
3. The resignation or termination of the Master Servicer
or the Trustee;
4. The repurchase or substitution of Mortgage Loans
pursuant to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Collection Account
or the Distribution Account; and
7. Any event that would result in the inability of the
Trustee to make advances regarding delinquent
Mortgage Loans.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer shall promptly
furnish to each Rating Agency copies of the following:
1. Each annual statement as to compliance described in
Section 3.20; and
2. Each annual independent public accountants' servicing
report described in Section 3.21.
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Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and to Duff & Xxxxxx Credit Rating Company, 00 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: RMBS Monitoring, or such other addresses as
the Rating Agencies may designate in writing to the parties hereto.
SECTION 12.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
WILSHIRE SERVICING CORPORATION,
as Master Servicer
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
BANKERS TRUST COMPANY
as Trustee
By: /s/ Xxxxxxxxx Xxxxxxxxxxxx
----------------------------
Name: Xxxxxxxxx Xxxxxxxxxxxx
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of June 1998, before me, a notary public in and
for said State, personally appeared Xxxxx Xxxxx, known to me to be an Assistant
Vice President of Salomon Brothers Mortgage Securities VII, Inc., one of the
parties that executed the within instrument, and also known to me to be the
person who executed it on behalf of said party, and acknowledged to
me that such party executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
___________________________________
Notary Public
[Notarial Seal]
STATE OF OREGON )
) ss.:
COUNTY OF _________________ )
On the ___ day of June 1998, before me, a notary public in and
for said State, personally appeared ____________________, known to me to be a
_______________ of Wilshire Servicing Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________________
Notary Public
[Notarial Seal]
STATE OF __________ )
) ss.:
COUNTY OF ___________ )
On the ___ day of June 1998, before me, a notary public in and
for said State, personally appeared ________________, known to me to be a
__________________ of Bankers Trust Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
CLASS A-1 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Pass-Through Class Certificate Balance
Rate: Variable of the Class A-1 Certificates as of the
Closing Date: $___________
Cut-off Date: June 1, 1998 Initial Certificate Balance
of this Class A-1 Certificate
Closing Date: June 26, 1998 as of the Closing Date
$--------------
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K ZR 2
Trustee: Certificate No. __
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES OF THE SAME SERIES
IS REDUCED TO ZERO, THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE REDUCED
BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
-3-
This certifies that _______________ is the registered owner of
the Percentage Interest evidenced by this Class A-1 Certificate (obtained by
dividing the principal amount of this Class A-1 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-1 Certificates (their "Class Certificate Balance") as of the Closing
Date) in that certain beneficial ownership interest evidenced by all the Class
A-1 Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution, or in the case
of the first Distribution Date, on the Closing Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class A-1 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-1
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the
-4-
Agreement. As provided in the Agreement, withdrawals from the Distribution
Account and the Collection Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-1 Certificates are issuable in fully registered
certificated form only without coupons in minimum denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class A-1 Certificates are exchange able for new Class A-1
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
No service charge will be imposed for any registration or
exchange of Class A-1 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-1 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
-5-
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
CLASS A-2 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Pass-Through Class Certificate Balance
Rate: 6.75% per annum of the Class A-2 Certificates as of the
Closing Date: $__________
Cut-off Date: June 1, 1998 Initial Certificate Balance
of this Class A-2 Certificate
Closing Date: June 26, 1998 as of the Closing Date:
$_________________
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K ZS 0
Trustee: Certificate No. __
Bankers Trust Company
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION OR
BANKERS TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY
OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. [IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES OF THE SAME SERIES
IS REDUCED TO ZERO, THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE REDUCED
BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.]
-3-
This certifies that ______________ is the registered owner of
the Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the principal amount of this Class A-2 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-2 Certificates (their "Class Certificate Balance") as of the Closing
Date) in that certain beneficial ownership interest evidenced by all the Class
A-2 Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which terms include any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution, or in the case
of the first Distribution Date, on the Closing Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class A-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-2
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the
-4-
Agreement. As provided in the Agreement, withdrawals from the Distribution
Account and the Collection Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-2 Certificates are issuable in fully registered
certificated form only without coupons in minimum denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class A-2 Certificates are exchange able for new Class A-2
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
No service charge will be imposed for any registration or
exchange of Class A-2 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-2 Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar, or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
-5-
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS XS CERTIFICATE
CLASS XS MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Pass-Through Class Notional Amount of the Class XS
Rate: Variable as of the Closing Date: $___________
Cut-off Date: June 1, 1998
Certificate Notional Amount of this Class
Closing Date: June 26, 1998 XS Certificate as of the Closing Date:
$_______________
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation Certificate No. __
Trustee:
Bankers Trust Company CUSIP:79548K ZT 8
-2-
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JUNE 26, 1998. ASSUMING THAT
THE MORTGAGE LOANS ARE NOT SUBJECT TO ANY VOLUNTARY OR INVOLUNTARY PREPAYMENT,
THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $100,000
OF INITIAL CERTIFICATE NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ____% PER
ANNUM, AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO
MORE THAN $_____ PER $100,000 OF INITIAL CERTIFICATE NOTIONAL AMOUNT, COMPUTED
UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
NOT PREPAY OR, IF THEY DO, THAT THEY WILL PREPAY AT ANY PARTICULAR RATE.
This certifies that ______________ is the registered owner of
the Percentage Interest evidenced by this Class XS Certificate (obtained by
dividing the certificate notional amount of this Class XS Certificate (its
"Certificate Notional Amount") as of the Closing Date by the certificate
notional amount of all the Class XS Certificates (their "Certificate Notional
Amount") as of the Closing Date) in that certain beneficial ownership interest
evidenced by all the Class XS Certificates in the Trust Fund created pursuant to
a Pooling and Servicing Agreement, dated as of the Cut-off Date specified above
(the "Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor", which term includes any successor entity under the Agreement),
Wilshire Servicing Corporation (the "Master Servicer", which term includes any
successor entity under the Agreement) and Bankers Trust Company (the "Trustee",
which term
-3-
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution, or in the case
of the first Distribution Date, on the Closing Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class XS Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class XS
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate
Notional Amount that is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the initial Certificate Notional Amount of such Class of
Certificates, or otherwise by check mailed by first class mail to the address of
such Holder appearing in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar or such other location specified in the
notice to the Holder hereof of such final distribution. Notwithstanding anything
herein to the contrary, no distributions will be made with respect to a
Certificate that has previously been surrendered as contemplated by the
preceding sentence or, with limited exception, that should have been surrendered
as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Notional Amount hereof is binding on such Holder
and all future Holders of this Certificate and
-4-
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such distribution is made upon this
Certificate.
The Class XS Certificates are issuable in fully registered
certificated form only without coupons in minimum denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class XS Certificates are exchange able for new Class XS
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class XS Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
No service charge will be imposed for any registration or
exchange of Class XS Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
XS Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
-5-
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class XS Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-4
FORM OF CLASS PO CERTIFICATE
CLASS PO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Pass-Through Class Certificate Balance
Rate: 0% per annum of the Class PO Certificates as of the
Closing Date: $___________
Cut-off Date: June 1, 1998 Initial Certificate Balance
of this Class PO Certificate
Closing Date: June 26, 1998 as of the Closing Date
$___________________
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K
Trustee: Certificate No. __
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES OF THE SAME SERIES
IS REDUCED TO ZERO, THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE REDUCED
BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that _______________ is the registered owner of
the Percentage Interest evidenced by this Class PO Certificate (obtained by
dividing the principal amount of this Class PO Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class PO Certificates (their "Class Certificate Balance") as of the Closing
Date) in that certain beneficial ownership interest evidenced by all the Class
PO Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution, or in the case
of the first Distribution Date, on the Closing Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class PO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class PO
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Distribution
Account and the Collection Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class PO Certificates are issuable in fully registered
certificated form only without coupons in minimum denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class PO Certificates are exchange able for new Class PO
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
No service charge will be imposed for any registration or
exchange of Class PO Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
PO Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class PO Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-5
FORM OF CLASS B-1 CERTIFICATE
CLASS B-1 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class B-
Rate: Variable 1 Certificates as of the Closing Date:
$____________
Cut-off Date: June 1, 1998 Initial Certificate Balance of the Class B-
1 Certificate as of the Closing Date:
$____________
Closing Date: June 26, 1998
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K ZU 5
Trustee: Certificate No. ___
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & COMPANY OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that ______________ is the registered owner of
the Percentage Interest evidenced by this Class B-1 Certificate (obtained by
dividing the principal amount of this Class B-1 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-1 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (or in the case
of the first Distribution Date, on the Closing Date) (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class B-1 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class B-1
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-1 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-1 Certificates are exchangeable for new Class B-1 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-1 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-1 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-1 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar, and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-6
FORM OF CLASS B-2 CERTIFICATE
CLASS B-2 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class B-
Rate: Variable 2 Certificates as of the Closing Date:
$__________
Cut-off Date: June 1, 1998 Initial Certificate Balance of this Class B-
2 Certificate as of the Closing Date:
$__________
Closing Date: June 26, 1998
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K ZV 3
Trustee: Certificate No. __
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & COMPANY OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that _____________ is the registered owner of
the Percentage Interest evidenced by this Class B-2 Certificate (obtained by
dividing the principal amount of this Class B-2 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-2 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (or in the case
of the first Distribution Date, on the Closing Date) (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class B-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class B-2
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-2 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-2 Certificates are exchangeable for new Class B-2 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee, or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-2 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-2 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-2 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-7
FORM OF CLASS B-3 CERTIFICATE
CLASS B-3 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class B-
Rate: Variable 3 Certificates as of the Closing Date:
$__________
Cut-off Date: June 1, 1998 Initial Certificate Balance of this Class B-
3 Certificate as of the Closing Date:
$______________
Closing Date: June 26, 1998
First Distribution Date:
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation CUSIP: 79548K ZW 1
Trustee: Certificate No. __
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & COMPANY OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that ____________ is the registered owner of
the Percentage Interest evidenced by this Class B-3 Certificate (obtained by
dividing the principal amount of this Class B-3 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-3 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-3
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (or in the case
of the first Distribution Date, on the Closing Date) (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class B-3 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class B-3
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-3 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-3 Certificates are exchangeable for new Class B-3 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-3 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-3 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-3 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-3 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-8
FORM OF CLASS B-4 CERTIFICATE
CLASS B-4 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class
Rate: ____% per annum B-4 Certificates as of the Closing Date:
$__________
Cut-off Date: June 1, 1998 Initial Certificate Balance of the Class
B-4 Certificate as of the Closing Date:
$________________
Closing Date: June 26, 1998
First Distribution Date: Certificate No. __
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation
Trustee:
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF SALOMON BROTHER INC OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JUNE 26, 1998. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED PREPAYMENT SPEED OF __% CPR, THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $______ OF OID PER $1,000 OF
INITIAL CERTIFICATE BALANCE, THE YIELD TO MATURITY IS ____% PER ANNUM, AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____
PER $1,000 OF INITIAL CERTIFICATE BALANCE, COMPUTED UNDER THE EXACT METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL NOT PREPAY OR, IF THEY DO,
THAT THEY WILL PREPAY AT ANY PARTICULAR RATE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that _____________ is the registered owner of
the Percentage Interest evidenced by this Class B-4 Certificate (obtained by
dividing the principal amount of this Class B-4 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-4 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-4
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation and Bankers Trust Company (the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth here after. To the extent not defined herein,
capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (or in the case
of the first Distribution Date, on the Closing Date) (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class B-4 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class B-4
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans
and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-4 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-4 Certificates are exchangeable for new Class B-4 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-4 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-4 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-4 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-4 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-9
FORM OF CLASS B-5 CERTIFICATE
CLASS B-5 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class
Rate: ____% per annum B-5 Certificates as of the Closing Date:
$_________
Cut-off Date: June 1, 1998 Initial Certificate Balance of the Class
B-5 Certificate as of the Closing Date:
$______________
Closing Date: June 26, 1998
First Distribution Date: Certificate No.__
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation
Trustee:
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF SALOMON BROTHERS INC OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JUNE 26, 1998. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED PREPAYMENT SPEED OF __% CPR, THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $______ OF OID PER $1,000 OF
INITIAL CERTIFICATE BALANCE, THE YIELD TO MATURITY IS _____% PER ANNUM, AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____
PER $1,000 OF INITIAL CERTIFICATE BALANCE, COMPUTED UNDER THE EXACT METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL NOT PREPAY OR, IF THEY DO,
THAT THEY WILL PREPAY AT ANY PARTICULAR RATE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that ________________ is the registered owner
of the Percentage Interest evidenced by this Class B-5 Certificate (obtained by
dividing the principal amount of this Class B-5 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-5 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-5
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth here after. To the extent not defined
herein, capitalized terms have the respective meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (or in the case
of the first Distribution Date, on the Closing Date) (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class B-5 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class B-5
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having an initial aggregate Certificate Balance
that is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
initial Certificate Balance of such Class of Certificates, or otherwise by check
mailed by first class mail to the address of such Holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-5 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-5 Certificates are exchangeable for new Class B-5 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-5 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-5 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-5 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-5 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-10
FORM OF CLASS B-6 CERTIFICATE
CLASS B-6 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Initial Pass-Through Class Certificate Balance of the Class
Rate: ____% per annum B-6 Certificates as of the Closing Date:
$___________
Cut-off Date: June 1, 1998 Initial Certificate Balance of the Class
B- 6 Certificate as of the Closing Date:
$______________
Closing Date: June 26, 1998
First Distribution Date: Certificate No. __
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation
Trustee:
Bankers Trust Company
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF SALOMON BROTHERS INC OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR PLEDGED, SOLD OR OTHERWISE
TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, UNLESS SUCH
TRANSFER IS MADE IN ACCORDANCE WITH SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JUNE 26, 1998. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED PREPAYMENT SPEED OF __% CPR, THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $______ OF OID PER $1,000 OF
INITIAL CERTIFICATE BALANCE, THE YIELD TO MATURITY IS _____% PER ANNUM, AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____
PER $1,000 OF INITIAL CERTIFICATE BALANCE, COMPUTED UNDER THE EXACT METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL NOT PREPAY OR, IF THEY DO,
THAT THEY WILL PREPAY AT ANY PARTICULAR RATE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE
MADE MONTHLY AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES WITH HIGHER
NUMERICAL DESIGNATIONS OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that ________________ is the registered owner
of the Percentage Interest evidenced by this Class B-6 Certificate (obtained by
dividing the principal amount of this Class B-6 Certificate (its "Certificate
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B-6 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B-6
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (or in the case of the
first Distribution Date, on the Closing Date) (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to all the Holders of the Class B-6
Certificates on the applicable Distribution Date pursuant to the Agreement. All
distributions made under the Agreement on the Class B-6 Certificates will be
made by the Trustee by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions no less than five Business Days prior to
the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates having an initial aggregate Certificate Balance that is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the initial
Certificate Balance of such Class of Certificates, or otherwise by check mailed
by first class mail to the address of such Holder appearing in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution. Notwithstanding anything herein to the contrary, no distributions
will be made with respect to a Certificate that has previously been surrendered
as contemplated by the preceding sentence or, with limited exception, that
should have been surrendered as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Balance hereof is binding on such Holder and all
future Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B-6 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B-6 Certificates are exchangeable for new Class B-6 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B-6 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration or
exchange of Class B-6 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B-6 Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-6 Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-11
FORM OF CLASS R-I CERTIFICATE
CLASS R-I MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Cut-off Date: June 1, 1998 Percentage Interest evidenced by
this Class R-I Certificate: 100.00%
Closing Date: June 26, 1998
CUSIP: 79548K ZX 9
First Distribution Date: Certificate No. __
July 27, 1998
Master Servicer:
Wilshire Servicing Corporation
Trustee:
Bankers Trust Company
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, PLEDGED OR OTHERWISE ASSIGNED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
[THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS XS, CLASS
PO, CLASS B-1, CLASS B-2, CLASS B-3, CLASS B-4, CLASS B-5 AND CLASS B-6
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE AGREEMENT REFERRED TO HEREIN, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS, IF ANY, ON THIS CERTIFICATE.
This certifies that _______________ is the registered owner of
the Percentage Interest evidenced by this Class R-I Certificate (as specified
above) in that certain beneficial ownership interest evidenced by all the Class
R-I Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, capitalized terms used herein have the respective meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to all the Holders
of the Class R-I Certificates on the applicable Distribution Date pursuant to
the Agreement. All distributions made under the Agreement on the Class R-I
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having a 66% Percentage Interest of such Class
of Certificates, or otherwise by check mailed by first class mail to the address
of such Holder appearing in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar or such other location specified in the
notice to the Holder hereof of such final distribution. Notwithstanding anything
herein to the contrary, no distributions will be made with respect to a
Certificate that has previously been surrendered as contemplated by the
preceding sentence or, with limited exception, that should have been surrendered
as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R-I Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject
to certain limitations therein set forth, Class R-I Certificates are
exchangeable for new Class R-I Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as re quested by the Holder
surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be
bound by the provisions of Section 5.02(d) of the Agreement and, if any
purported Transferee shall become a Holder of this Certificate in violation of
the provisions of such Section 5.02(d), to have irrevocably authorized the
Trustee under clause (iii)(A) of such Section 5.02(d) to deliver payments to a
Person other than such Person and to have irrevocably authorized the Trustee
under clause (iii)(B) of such Section 5.02(d) to negotiate the terms of any
mandatory sale and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. Each Person holding or
acquiring any Ownership Interest in this Certificate must be a Permitted
Transferee and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
Transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the Transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit H-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things, that
such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of Section 5.02(d) of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if a Responsible
Officer of the Certificate Registrar or Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in this Certificate to such proposed Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest herein unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit H-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Trustee written
notice that it is a "pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring such Ownership Interest, if it is, or is holding such Ownership
Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Trustee the following: (a) written confirmation from each Rating Agency
to the effect that the modification of, addition to or elimination of such
provisions will not cause such Rating Agency to qualify, downgrade or withdraw
its then-current ratings of any Class of Certificates; and (b) an Opinion of
Counsel, in form and substance satisfactory to the Trustee, to the effect that
such modification of, addition to or elimination of such provisions will not
cause any of REMIC I or REMIC II to (x) cease to qualify as a REMIC or (y) be
subject to an entity-level tax caused by the Transfer of any Class R-I
Certificate to a Person that is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-I Certificate to a Person that is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a
"Disqualified Organization" and a "Non-United States Person". A "Disqualified
Organization" is any of (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for the
FHLMC, a majority of its board of directors is not selected by such governmental
unit), (ii) a foreign government, any international organization, or any agency
or instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code and
(v) any other Person so designated by the REMIC Administrator based upon an
Opinion of Counsel provided to it that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause the Trust Fund or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United
States Person. A "United States Person" is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class R-I Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class R-I Certificates, but the Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Class R-I Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Service, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Master Servicer and the Trustee with the consent
of the Holders of Certificates entitled to at least 66% of the Voting Rights
allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of REMIC I or REMIC II as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT A-12
FORM OF CLASS R-II CERTIFICATE
CLASS R-II MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-WFC1
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of residential mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Cut-off Date: June 1, 1998 Percentage Interest evidenced by
this Class R-II Certificate: 100.00%
Closing Date: June 26, 1998
CUSIP: 79548K ZY 7
First Distribution Date:
July 27, 1998 Certificate No. __
Master Servicer:
Wilshire Servicing Corporation
Trustee:
Bankers Trust Company
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
OF THE SECURITIES ACT AND ANY ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN
SUCH PARAGRAPHS) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, PLEDGED OR OTHERWISE ASSIGNED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., WILSHIRE SERVICING CORPORATION, BANKERS
TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR ANY OF THE UNDERLYING MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
A-4, CLASS XS, CLASS B-1, CLASS B-2, CLASS B-3, CLASS B-4, CLASS B-5 AND CLASS
B-6 CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE AGREEMENT REFERRED TO HEREIN, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS, IF ANY, ON THIS CERTIFICATE.
This certifies that _______________ is the registered owner of
the Percentage Interest evidenced by this Class R-II Certificate (as specified
above) in that certain beneficial ownership interest evidenced by all the Class
R-II Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-off Date specified above (the "Agreement"), among
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor", which term
includes any successor entity under the Agreement), Wilshire Servicing
Corporation (the "Master Servicer", which term includes any successor entity
under the Agreement) and Bankers Trust Company (the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, capitalized terms used herein have the respective meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
on the next succeeding Business Day (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to all the Holders
of the Class R-II Certificates on the applicable Distribution Date pursuant to
the Agreement. All distributions made under the Agreement on the Class R-II
Certificates will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions no less than five Business
Days prior to the related Record Date (which wiring instructions may be in the
form of a standing order applicable to all subsequent distributions) and is the
registered owner of Certificates having a 66% Percentage Interest of such Class
of Certificates, or otherwise by check mailed by first class mail to the address
of such Holder appearing in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar or such other location specified in the
notice to the Holder hereof of such final distribution. Notwithstanding anything
herein to the contrary, no distributions will be made with respect to a
Certificate that has previously been surrendered as contemplated by the
preceding sentence or, with limited exception, that should have been surrendered
as contemplated by the preceding sentence.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account and the Collection Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R-II Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement
and subject to certain limitations therein set forth, Class R-II Certificates
are exchangeable for new Class R-II Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No transfer, sale, pledge or other disposition of this
Certificate or interest herein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. Furthermore, no transfer, sale, pledge or other disposition of
any interest in this Certificate may be made by a Certificate Owner except in
reliance on (i) Rule 144A under the Securities Act to a Qualified Institutional
Buyer that is a acquiring such interest for its own account or for the account
of another Qualified Institutional Buyer or (ii) Rule 501(a) under the
Securities Act to an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act and any entity in which
all the equity owners come within such paragraphs). If a transfer of this
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Agreement and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit F-2A or as
Exhibit F-2B to the Agreement; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without registration under
the Securities Act (which Opinion of Counsel shall not be an expense of the
Trust Fund or of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of this
Certificate or interest herein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of this
Certificate or interests herein shall, and does hereby agree to indemnify, the
Depositor, the Trustee, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless such transfer is made in accordance with Section 5.02
of the Agreement.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be
bound by the provisions of Section 5.02(d) of the Agreement and, if any
purported Transferee shall become a Holder of this Certificate in violation of
the provisions of such Section 5.02(d), to have irrevocably authorized the
Trustee under clause (iii)(A) of such Section 5.02(d) to deliver payments to a
Person other than such Person and to have irrevocably authorized the Trustee
under clause (iii)(B) of such Section 5.02(d) to negotiate the terms of any
mandatory sale and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. Each Person holding or
acquiring any Ownership Interest in this Certificate must be a Permitted
Transferee and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
Transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the Transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit H-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things, that
such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of Section 5.02(d) of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if a Responsible
Officer of the Certificate Registrar or Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in this Certificate to such proposed Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest herein unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit H-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Trustee written
notice that it is a "pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring such Ownership Interest, if it is, or is holding such Ownership
Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Trustee the following: (a) written confirmation from each Rating Agency
to the effect that the modification of, addition to or elimination of such
provisions will not cause such Rating Agency to qualify, downgrade or withdraw
its then-current ratings of any Class of Certificates; and (b) an Opinion of
Counsel, in form and substance satisfactory to the Trustee, to the effect that
such modification of, addition to or elimination of such provisions will not
cause any of REMIC I or REMIC II to (x) cease to qualify as a REMIC or (y) be
subject to an entity-level tax caused by the Transfer of any Class R- II
Certificate to a Person that is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-II Certificate to a Person that is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a
"Disqualified Organization" and a "Non-United States Person". A "Disqualified
Organization" is any of (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for the
FHLMC, a majority of its board of directors is not selected by such governmental
unit), (ii) a foreign government, any international organization, or any agency
or instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code and
(v) any other Person so designated by the REMIC Administrator based upon an
Opinion of Counsel provided to it that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause the Trust Fund or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United
States Person. A "United States Person" is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class R-II Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class R-II Certificates, but the Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Class R-II Certificates.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Service, the Trustee, the Certificate Registrar or any
such agent shall be affected by notice to the contrary.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer
and the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Master Servicer and the Trustee with the consent
of the Holders of Certificates entitled to at least 66% of the Voting Rights
allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of REMIC I or REMIC II as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated: June 26, 1998
BANKERS TRUST COMPANY,
as Certificate Registrar
By:_________________________________
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
Dated:
-------------------------------
Signature by or on behalf of Assignor
-------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
_________________________________________________________________ for the
account of ____________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
EXHIBIT B
[RESERVED]
EXHIBIT C-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
June __, 1998
Salomon Brothers Mortgage Securities VII, Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilshire Servicing Corporation
0000 Xxxxx Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of June 1, 1998 (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc.,
Wilshire Servicing Corporation and Bankers Trust Company (Salomon
Brothers Mortgage Securities VII, Inc. Mortgage Pass-Through
Certificates, Series 1998-WFC1)
-------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Agreement, we certify that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed hereto as not being covered by this certification), (i) the
Mortgage Note included in each Mortgage File required to be delivered to us
pursuant to this Agreement is in our possession and (ii) such Mortgage Note has
been reviewed by us and appears regular on its face and relates to such Mortgage
Loan.
Attached is the Trustee's preliminary exceptions in accordance with
Section 2.02 of the Agreement. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Agreement. The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan, or (iii) whether any Mortgage File
included any of the documents specified in clause (v) of Section 2.01 of the
Agreement.
BANKERS TRUST COMPANY
By:_________________________
Name:
Title:
EXHIBIT C-2
FORM OF TRUSTEE FINAL CERTIFICATION
[Date]
Salomon Brothers Mortgage Securities VII, Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilshire Servicing Corporation
0000 Xxxxx Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of June 1, 1998 (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc.,
Wilshire Servicing Corporation and Bankers Trust Company (Salomon
Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1998-WFC1)
-------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the 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 the
attachment hereto), it or a Custodian on its behalf has received:
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of Bankers Trust Company, as
Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., under the applicable Pooling
and Servicing Agreement, without recourse", with all prior and
intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to
the Trustee;
(ii) the original Mortgage with evidence of recording
thereon, and the original recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment of the Mortgage executed in
the following form: "Bankers Trust Company, as Trustee for the
registered holders of Salomon Brothers Mortgage Securities
VII, Inc., under the applicable Pooling and Servicing
Agreement";
(iv) the original recorded Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the
originator to the Person assigning
the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any; and
(vi) the original or copies of each lender's title
insurance policy, together with all endorsements or riders
which were issued with or subsequent to the issuance of such
policy, insuring the priority of the Mortgage as a first lien
on the Mortgaged Property represented therein as a fee
interest vested in the Mortgagor.
Attached is the Trustee's exception report in accordance with Section
2.02 of the Agreement. Capitalized terms not defined herein shall have the
meanings assigned to them in the Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Agreement. The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
BANKERS TRUST COMPANY
By:
Name:
Title:
EXHIBIT D
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (this "Agreement"),
dated June 25, 1998, between Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser") and WMFC 1997-4 Inc., a Delaware
corporation (the "Seller").
PRELIMINARY STATEMENT
The Seller intends to sell the Mortgage Loans (as hereinafter
identified) to the Purchaser on the terms and subject to the conditions set
forth in this Agreement. The Purchaser intends to deposit the Mortgage Loans
into a mortgage pool comprising the Trust Fund. The Trust Fund will be evidenced
by a single series of mortgage pass-through certificates designated as Series
1998-WFC1 (the "Certificates"). The Certificates will consist of eleven classes
of certificates. The Class B-6 Certificates and the Residual Certificates
(together, the "Wilshire Certificates") will be delivered to the Seller as
partial consideration for the Mortgage Loans as further described below. The
Certificates will be issued pursuant to a Pooling and Servicing Agreement, dated
as of June 1, 1998 (the "Pooling and Servicing Agreement"), among the Purchaser
as depositor, Wilshire Servicing Corporation as master servicer (the "Master
Servicer") and Bankers Trust Company as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before June 25, 1998 (the "Closing
Date"), certain "reperforming", conventional, one- to four-family,
adjustable-rate and fixed-rate residential mortgage loans (the "Mortgage
Loans"), having an aggregate principal balance as of the close of business on
June 1, 1998 (the "Cut-off Date") of approximately $168,960,487.17 (the "Closing
Balance"), after giving effect to all payments due on the Mortgage Loans on or
before the Cut-off Date, whether or not received.
SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that shall describe such Mortgage Loans and set forth
all of the Mortgage Loans to be purchased under this Agreement. The Closing
Schedule will conform to the requirements set forth in this Agreement and to the
definition of "Mortgage Loan Schedule" under the Pooling and Servicing
Agreement. The Closing Schedule shall be used as the Mortgage Loan Schedule
under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, pay to or upon the
order of the Seller in immediately available funds an amount (the "Purchase
Price") equal to approximately _____% times the initial
Certificate Balance of the Certificates before deducting expenses equal to
approximately $-------------.
(b) The Purchaser or any assignee, transferee or designee of
the Purchaser shall be entitled to all scheduled payments of principal due after
the Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. On the Closing Date, the
Seller does hereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse but subject to the terms of this Agreement, all of its right,
title and interest in, to and under the Mortgage Loans. The contents of each
Mortgage File not delivered to the Purchaser or to any assignee, transferee or
designee of the Purchaser on or prior to the Closing Date are and shall be held
in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser. Upon the sale of the Mortgage Loans,
the ownership of each Mortgage Note, the related Mortgage and the other contents
of the related Mortgage File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
that come into the possession of the Seller on or after the Closing Date shall
immediately vest in the Purchaser and shall be delivered immediately to the
Purchaser or as otherwise directed by the Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller will, on
or prior to the Closing Date, deliver or cause to be delivered to the Purchaser
or any assignee, transferee or designee of the Purchaser each of the following
documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of Bankers Trust Company, as Trustee
for the registered holders of Certificates issued by Salomon Brothers
Mortgage Securities VII, Inc., under the applicable pooling and
servicing agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording
thereon;
(iii) an original Assignment of Mortgage executed in
the following form: "Bankers Trust Company, as Trustee for the
registered holders of Certificates issued by
-3-
Salomon Brothers Mortgage Securities VII, Inc., under the applicable
pooling and servicing agreement";
(iv) the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Seller as
contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy,
together with all endorsements or riders that were issued with or
subsequent to the issuance of such policy, [or a commitment or a binder
to issue the same] insuring the priority of the Mortgage as a first
lien on the Mortgaged Property represented therein as a fee interest
vested in the Mortgagor.
The Seller shall promptly (and in no event later than five
Business Days following the later of the Closing Date and the date of receipt by
the Seller of the recording information for a Mortgage) submit or cause to be
submitted for recording, at no expense to the Purchaser (or the Trust Fund or
the Trustee under the Pooling and Servicing Agreement), in the appropriate
public office for real property records, each Assignment referred to in clauses
(b)(iii), and to the extent already done, (iv) of this Section 4. In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Seller promptly shall prepare a substitute Assignment or cure such
defect, as the case may be, and thereafter cause each such Assignment to be duly
recorded.
Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the Seller
hereunder shall be deemed to have been satisfied upon (1) delivery by or on
behalf of the Seller promptly upon receipt thereof to or on behalf of the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such copy is a
certified by the Seller, delivery promptly upon receipt thereof of either the
original or a copy of such document certified by the public recording office to
be a true and complete copy of the original.
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered
pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any
assignee, transferee or designee of the Purchaser at any time before or after
the Closing Date (and with respect to each document permitted to be delivered
after the Closing Date, within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
-4-
(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the
right to assign its interest under this Agreement, in whole or in part, to the
Trustee, as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Seller, and the assignee shall succeed to
the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser or the Trustee in connection with
enforcing any obligations of the Seller under this Agreement will be promptly
reimbursed by the Seller.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date,
the Seller shall either (i) deliver in escrow to the Purchaser or to any
assignee, transferee or designee of the Purchaser for examination the Mortgage
File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants, as of the date
hereof and as of the Closing Date, that:
(i) The Purchaser is duly organized, validly existing
and in good standing as a corporation under the laws of the State of Delaware
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. The Purchaser has the full corporate power and authority to
execute and deliver, engage in the transactions contemplated by, and perform and
observe the terms and conditions of this Agreement.
(ii) The Purchaser has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(iii) The execution, delivery and performance of this
Agreement by the Purchaser (x) does not conflict and will not conflict with,
does not breach and will not result in a breach of and does not constitute and
will not constitute a default (or an event, which with notice or lapse of time
or both, would constitute a default) under (A) any terms or provisions of the
-5-
articles of incorporation or by-laws of the Purchaser, (B) any term or provision
of any material agreement, contract, instrument or indenture, to which the
Purchaser is a party or by which the Purchaser or any of its property is bound,
or (C) any law, rule, regulation, order, judgment, writ, injunction or decree of
any court or governmental authority having jurisdiction over the Purchaser or
any of its property and (y) does not create or impose and will not result in the
creation or imposition of any lien, charge or encumbrance which would have a
material adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Purchaser to any
governmental authority or court is required, under federal laws or the laws of
the State of New York, for the execution, delivery and performance by the
Purchaser of, or compliance by the Purchaser with, this Agreement or the
consummation by the Purchaser of any other transaction contemplated hereby and
by the Pooling and Servicing Agreement; provided, however, that the Purchaser
makes no representation or warranty regarding federal or state securities laws
in connection with the sale or distribution of the Certificates.
(v) The Purchaser is not in violation of, and the
execution and delivery of this Agreement by the Purchaser and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction over
the Purchaser or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Purchaser or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder.
(vi) The Purchaser does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every obligation
contained in this Agreement.
(vii) There are no actions or proceedings against, or
investigations known to it of, the Purchaser before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreemen, (B) that
might prohibit or materially and adversely affect the performance by the
Purchaser of its obligations under, or validity or enforceability of, this
Agreement or (C) that would result in a material adverse change in the financial
condition of the Purchaser.
(viii) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Purchaser.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
-6-
The Seller hereby represents and warrants, as of the date
hereof and as of the Closing Date to the Purchaser that:
(i) The Seller is duly organized, validly existing
and in good standing as a corporation under the laws of the State of Delaware
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. The Seller had the full corporate power and authority to
own the Mortgage Loans and to transfer and convey the Mortgage Loans to the
Purchaser and has the full corporate power and authority to execute and deliver,
engage in the transactions contemplated by, and perform and observe the terms
and conditions of this Agreement.
(ii) The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of the Seller, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or by which the Seller or any of its property is bound, or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws or the laws of
the State of New York, for the execution, delivery and performance by the Seller
of, or compliance by the Seller with, this Agreement or the consummation by the
Seller of any other transaction contemplated hereby and by the Pooling and
Servicing Agreement; provided, however, that the Seller makes no representation
or warranty regarding federal or state securities laws in connection with the
sale or distribution of the Certificates.
(v) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might
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have consequences that would materially and adversely affect the performance of
its obligations and duties hereunder.
(vi) The Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every obligation
contained in this Agreement.
(vii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller was the owner of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note,
and, upon the payment to the Seller of the Purchase Price, in the event that the
Seller retains or has retained record title, the Seller shall retain such record
title to each Mortgage, each related Mortgage Note and the related Mortgage
Files with respect thereto in trust for the Purchaser as the owner thereof from
and after the date hereof.
(viii) There are no actions or proceedings against,
or investigations known to it of or threatened against, the Seller before any
court, administrative or other tribunal (A) that might prohibit its entering
into this Agreement, (B) seeking to prevent the sale of the Mortgage Loans by
the Seller or the consummation of the transactions contemplated by this
Agreement, (C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or validity or
enforceability of, this Agreement or (D) that would result in a material adverse
change in the financial condition of the Seller.
(ix) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller are not subject to the bulk transfer or any similar
statutory provisions.
(x) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLER
RELATING TO THE MORTGAGE LOANS.
REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS. The Seller hereby represents and warrants to the Purchaser that as to
each Mortgage Loan as of the Closing Date:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;
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(ii) The Mortgage Loan is in compliance with all requirements
set forth on Exhibit 5, and the characteristics of the Mortgage Loans as set
forth on Exhibit 5 are true and correct;
(iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Closing Date, with respect to
such Mortgage Loan under the terms of the Mortgage Note have been made other
than as set forth in the Mortgage Loan Schedule; (b) the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds from a
party other than the owner of the related Mortgaged Property, directly or
indirectly, for the payment of any amount required by the Mortgage Note or
Mortgage;
(iv) To the Seller's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments or
other outstanding charges affecting the related Mortgaged Property that could
have a material adverse impact on the value of the Mortgaged Property as
collateral;
(v) To the Seller's knowledge, the terms of the Mortgage Note
and the Mortgage have not been impaired, waived, altered or modified in any
respect, except by written instruments, recorded in the applicable public
recording office if necessary to maintain the lien priority of the Mortgage; the
substance of any such waiver, alteration or modification has been approved by
the title insurer, to the extent required by the related policy, and is
reflected on the Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an assumption or modification agreement
approved by the title insurer and included in the Mortgage File pursuant to
4(b)(iv), to the extent required by the policy, and the terms of which are
reflected in the Mortgage Loan Schedule;
(vi) To the Seller's knowledge, the Mortgage Note and the
Mortgage are not subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, nor will the operation of any of the
terms of the Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part, or subject
to any right of rescission, set-off, counterclaim or defense, including the
defense of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(vii) All buildings upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, pursuant to insurance policies conforming to the
requirements of the Pooling and Servicing Agreement (including Blanket
Policies). All such insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged
Property was in an area identified on a Flood Hazard Map or Flood Insurance Rate
Map issued by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy
-9-
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of FNMA
and FHLMC. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(viii) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the origination and servicing of the Mortgage Loan
have been complied with in all material respects;
(ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally or
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the appraised
value of the Mortgaged Property, and (c) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and
the Seller has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secured debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;
(xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as may be limited by laws
affecting creditors' rights;
(xii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties;
(xiii) To the Seller's knowledge, the proceeds of the Mortgage
Loan have been fully disbursed to or for the account of the Mortgagor and there
is no obligation for the Mortgagee
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to advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) As of the Closing Date and prior to the sale of the
Mortgage Loan hereunder, the Seller was the sole legal, beneficial and equitable
owner of the Mortgage Note and the Mortgage and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear in all material respects
of any encumbrance, equity, lien, pledge, charge, claim or security interest;
(xv) To the Seller's knowledge, all parties which have had any
interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) in compliance in all material respects with any and all
applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(xvi) The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or similar policy) with, to the extent the loan is an
adjustable-rate Mortgage Loan, an adjustable-rate mortgage endorsement, such
endorsement substantially in the form of ALTA Form 6.0 or 6.1, acceptable to
FNMA or FHLMC, issued by a title insurer acceptable to FNMA and FHLMC and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (x)(a) and (b) above)
the Seller, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment in the Mortgage Rate and
monthly payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged Property, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller is the sole insured of such lender's title insurance policy, and to
the Seller's knowledge, such lender's title insurance policy is in full force
and effect and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. To the Seller's knowledge, no
claims have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;
(xvii) Other than as specified in paragraph (iii) above, there
is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration;
(xviii) To the Seller's knowledge, there are no mechanics' or
similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under law
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could give rise to such lien) affecting the related Mortgaged Property which are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xix) To the Seller's knowledge, all improvements which were
considered in determining the appraised value of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property;
(xx) The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved as such by the Secretary of HUD;
(xxi) To the Seller's knowledge and except as set forth in the
Prospectus Supplement, principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed; the
Mortgage Loan bears interest at the Mortgage Rate; the Mortgage Note is payable
on the first day of each month in Monthly Payments which, in the case of the
adjustable-rate Mortgage Loans, are changed on each Adjustment Date to an amount
which will amortize the Stated Principal Balance of the Mortgage Loan over its
remaining term at the Mortgage Rate; interest on the Mortgage Loan is calculated
on the basis of a 360-day year consisting of twelve 30-day months; with respect
to the adjustable-rate Mortgage Loans, the Mortgage Note does not permit
negative amortization; the Mortgage Loan does not permit the Mortgagor to
convert the Mortgage Loan to a fixed-rate Mortgage Loan; no Mortgage Loan has a
balloon payment feature;
(xxii) The collection practices used by the Seller with
respect to each Mortgage Note and Mortgage have been in all material respects
legal, proper, prudent and customary in the mortgage servicing industry. The
Mortgage Loan has been serviced by the Seller (directly or through a
subservicer) and, to the Seller's knowledge, any predecessor servicer in
accordance with the terms of the Mortgage Note. To the Seller's knowledge, with
respect to escrow deposits and Escrow Payments, if any, all such payments are in
the possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made;
(xxiii) The Mortgaged Property is free of damage and waste in
all material respects and there is no proceeding pending for the total or
partial condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
The Mortgagor has not notified the Seller and the Seller
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has no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers and Sailors Civil Relief Act of 1940;
(xxv) The related Mortgaged Property is not a leasehold estate
or, if such Mortgaged Property is a leasehold estate, the remaining term of such
lease is at least ten (10) years greater than the remaining term of the related
Mortgage Note and the Mortgage Loan meets the requirements of paragraph (xliii)
below;
(xxvi) To the Seller's knowledge, the Mortgage Note is not and
has not been secured by any collateral except the lien of the corresponding
Mortgage on the Mortgaged Property and the security interest of any applicable
security agreement or chattel mortgage referred to in (x) above;
(xxvii) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxviii) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(xxix) To the Seller's knowledge, the Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable-rate
mortgage loans; and if the Mortgage Loan is a Refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required by
applicable law with respect to the making of a Refinanced Mortgage Loan;
(xxx) To the Seller's knowledge, no Mortgage Loan was made in
connection with (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged Property;
(xxxi) The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other material documents required to be delivered with respect
to each Mortgage Loan pursuant to the Pooling and Servicing Agreement, have been
delivered to the Trustee all in compliance with the specific requirements of the
Pooling and Servicing Agreement;
(xxxii) To the Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law; all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use
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and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities;
(xxxiii) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan which will have a material adverse effect on such
Mortgage Loan;
(xxxiv) The Assignment of Mortgage, is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxv) If the Residential Dwelling on the Mortgaged Property
is a condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets FNMA's eligibility requirements;
(xxxvi) Neither the Seller nor any affiliate of the Seller has
made a mortgage on any Mortgaged Property other than the Mortgage Loan;
(xxxvii) Any Mortgage Loan subject to the provisions of the
Homeownership and Equity Protection Act of 1994, P.L. 103-325, 108 Stat 2160 was
originated in compliance therewith;
(xxxviii) The Mortgage Loan was not intentionally selected by
the Seller in a manner intended to adversely affect the interest of the
Purchaser;
(xxxix) The Seller has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement other than the
Purchaser or one of its affiliates;
(xl) The Mortgaged Property consists of a parcel of real
property of not more than ten acres with a single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit in
a low-rise or high-rise condominium project, or an individual unit in a planned
unit development. The Mortgaged Property is improved with a Residential
Dwelling. Without limiting the foregoing, the Mortgaged Property does NOT
consist of any of the following property types: (a) co-operative units, (b) log
homes, (c) earthen homes, (d) underground homes, (e) mobile homes and (f)
manufactured homes (as defined in the FNMA Originator-Servicer's Guide), except
when the appraisal indicates that the home is of comparable construction to a
stick or beam construction home, is readily marketable, has been permanently
affixed to the site and is not in a mobile home "park." The Mortgaged Property
is either a fee simple estate or a long-term residential lease. If the Mortgage
Loan is secured by a long-term residential lease, unless otherwise specifically
disclosed in the Mortgage Loan Schedule, (A) the
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terms of such lease expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor's consent (or the lessor's consent
has been obtained and such consent is the Mortgage File) and the acquisition by
the holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protection; (B) the terms of such lease do not (x) allow
the termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to cure,
such default or (y) prohibit the holder of the Mortgage from being insured under
the hazard insurance policy relating to the Mortgaged Property; (C) the original
term of such lease is not less than 15 years; (D) the term of such lease does
not terminate earlier than ten years after the maturity date of the Mortgage
Note; and (E) the Mortgaged Property is located in a jurisdiction in which the
use of leasehold estates for residential properties is an accepted practice;
(xli) To the Seller's knowledge, at the time of origination,
the Loan-To-Value Ratio of the Mortgage Loan was not greater than 100%; the
current Loan-to-Value Ratio in the Mortgage Loan Schedule reflects the value of
the Mortgaged Property as determined in an appraisal or a broker's price opinion
obtained within one year of the Cut-off Date; the appraiser or broker was
appointed by the Seller, had no interest, direct or indirect, in the related
Mortgaged Property or in any loan secured thereby, and its compensation is not
affected by the value assigned to such collateral;
(xlii) Each fixed-rate Mortgage Loan contains a customary
due-on-sale clause and each adjustable-rate Mortgage Loan may be assumed by a
creditworthy purchaser of the related Mortgaged Property;
(xliii) With respect to the adjustable-rate Mortgage Loans, as
of any Adjustment Date for such Mortgage Loan, the Index applicable to the
determination of the Mortgage Rate on such Mortgage Loan will be the weekly
average yield on U.S. Treasury securities adjusted to a constant maturity of one
year (the "Index") as published by the Federal Reserve Board in Statistical
Release H.15(519) and as most recently available as specified in the related
Mortgage Note the average of the interbank offered rates for six-month United
States dollar deposits in the London market, generally as published in THE WALL
STREET JOURNAL and as most recently available as of either (i) the first
business day 45 days prior to such Adjustment Date or (ii) the first business
day of the month preceding the month of such Adjustment Date, as specified in
the related Mortgage Note;
(xliv) The Seller will not foreclose on any Mortgage Loan
based on the delinquency circumstances in existence on the Closing Date; and
(xlv) As of the Cut-off Date none of the Mortgage Loans are
subject to the Home Ownership and Equity Protection Act of 1994.
SECTION 8. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
AND FOR BREACH OF REPRESENTATION AND WARRANTY.
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(a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of the Certificates.
With respect to the representations and warranties contained herein as to which
the Seller has no knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such representation
and warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Purchaser or the Purchaser's assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Seller with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report) as part of any Mortgage File, or of
a breach of any of the representations and warranties contained in Section 6 in
either case, that materially and adversely affects the value of any Mortgage
Loan or the interest therein of the Purchaser or the Purchaser's assignee,
transferee or designee, the party discovering such breach shall give prompt
written notice to the other. Within sixty (60) days of its discovery or its
receipt of notice of any such missing documentation that was not transferred by
the Seller as described above, or of materially defective documentation, or of
any such breach of a representation and warranty, the Seller promptly shall
deliver such missing document or cure such defect or breach in all material
respects or, in the event the Seller cannot deliver such missing document or
cannot cure such defect or breach, the Seller shall, within ninety (90) days of
its discovery or receipt of notice, either (i) repurchase the affected Mortgage
Loan at the Purchase Price (as such term is defined in the Pooling and Servicing
Agreement) or (ii) pursuant to the provisions of the Pooling & Servicing
Agreement, cause the removal of such Mortgage Loan from the Trust Fund and
substitute one or more Qualified Substitute Mortgage Loans. The Seller shall
amend the Closing Schedule to reflect the withdrawal of such Mortgage Loan from
the terms of this Agreement and the Pooling and Servicing Agreement. The Seller
shall deliver to the Purchaser such amended Closing Schedule and shall deliver
such other documents as are required by this Agreement or the Pooling and
Servicing Agreement within five (5) days of any such amendment. Any repurchase
pursuant to this Section 7(a) shall be accomplished by transfer to an account
designated by the Purchaser of the amount of the Purchase Price in accordance
with Section 2.03 of the Pooling and Servicing Agreement. Any repurchase
required by this Section shall be made in a manner consistent with Section 2.03
of the Pooling and Servicing Agreement.
(b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure or repurchase a defective Mortgage
Loan constitute the sole remedies of the Purchaser against the Seller respecting
a missing document or a breach of the representations and warranties contained
in Section 6.
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SECTION 9. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Xxxxxxx Xxxxxxxx & Xxxx at 10:00 a.m. New York City time on
the Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(b) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing against
payment by the Purchaser), all Closing Documents as
specified in Section 9 of this Agreement, in such
forms as are agreed upon and acceptable to the
Purchaser and the Seller, duly executed by all
signatories as required pursuant to the respective
terms thereof;
(c) The Seller shall have delivered and released to the
Purchaser or to its designee, all documents
(including without limitation, the Mortgage Loans)
required to be so delivered by the Seller to the
Purchaser on the Closing Date pursuant to Section
2.01 of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement and
the Pooling and Servicing Agreement shall have been
complied with in all material respects.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required to
be delivered on the Closing Date pursuant to the Pooling and Servicing
Agreement, the consideration for the Mortgage Loans as specified in Section 3 of
this Agreement, by delivery to the Seller of (i) the Purchase Price in
immediately available funds and (ii) the Wilshire Certificates.
SECTION 10. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
(a) An Officers' Certificate of the Seller and the
Servicer, dated the Closing Date, upon which the
Purchaser and Salomon Brothers Inc (the
"Underwriter") may rely, in the form of Exhibits 1
and 2 hereto, and attached thereto copies of the
certificate of incorporation, by-laws and certificate
of good standing of the Seller and the Servicer under
the laws of Delaware;
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(b) An Officers' Certificate of the Seller, dated the
Closing Date, upon which the Purchaser and the
Underwriter may rely, in the form of Exhibit 3
hereto, with respect to certain facts regarding the
sale of the Mortgage Loans by the Seller to the
Purchaser;
(c) An Opinion of Counsel of the Seller and the Servicer,
dated the Closing Date and addressed to the Purchaser
and the Underwriter, substantially in the form
attached hereto as Exhibit 4;
(d) Such opinions of counsel as the Rating Agencies or
the Trustee may request in connection with the sale
of the Mortgage Loans by the Seller to the Purchaser
or the Seller's execution and delivery of, or
performance under, this Agreement;
(e) A letter from Deloitte & Touche LLP, certified public
accountants, dated the date hereof, to the effect
that they have performed certain specified procedures
as a result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the Purchaser's
Prospectus Supplement, dated June 25, 1998, under the
captions "Summary -- The Mortgage Pool," "Risk
Factors-- Additional Risks Associated with the
Mortgage Loans," "The Mortgage Pool" and "Pooling and
Servicing Agreement-- The Master Servicer and the
Subservicer" agrees with the records of the Seller
and the Servicer; and
(f) Such further information, certificates, opinions and
documents as the Purchaser or the Underwriter may
reasonably request.
SECTION 11. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
recording fees, fees for title policy endorsements and continuations and the
fees for recording Assignments of Mortgage, the fees and expenses of the
Seller's accountants and attorneys, the costs and expenses incurred in
connection with producing the Seller's or any Subservicer's loan loss,
foreclosure and delinquency experience, and the costs and expenses incurred in
connection with obtaining the documents referred to in Sections 9(d) and 9(e),
the costs and expenses of printing (or otherwise reproducing) and delivering
this Agreement, the Pooling and Servicing Agreement, the Certificates, the
prospectus and prospectus supplement, and any private placement memorandum
relating to the Certificates and other related documents, the initial fees,
costs and expenses of the Trustee (subject to previously negotiated caps), the
initial fees, the fees and expenses of the Purchaser's counsel in connection
with the preparation of all documents relating to the securitization of the
Mortgage Loans (subject to previously negotiated caps), the filing fee charged
by the Securities and Exchange Commission for registration of the Certificates
and the fees charged by any rating agency to rate the Certificates (subject to
previously negotiated
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caps). All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.
SECTION 12. INDEMNIFICATION. (a) The Seller shall indemnify
and hold harmless each of (i) the Purchaser and (ii) the Underwriter, each of
their respective successors and assigns and (iii) each person, if any, who
controls the Purchaser within the meaning of Section 15 of the Securities Act of
1933, as amended (the "1933 Act") ((i) through (iii) collectively, the
"Indemnified Party") against any and all losses, claims, expenses, damages or
liabilities to which the Indemnified Party may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of any material fact contained
in the prospectus supplement (the "Prospectus Supplement") or any private
placement memorandum, or the omission or the alleged omission to state therein
the material fact necessary in order to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with (i) information furnished in writing to
the Purchaser or any of its affiliates by the Seller specifically for use
therein, which shall include, with respect to the Prospectus Supplement, the
information set forth under the captions "Summary -- The Mortgage Pool," " --
The Subservicer," "Risk Factors -- Additional Risks Associated with the Mortgage
Loans," "The Mortgage Pool," "Pooling and Servicing Agreement -- The Master
Servicer and the Subservicer" and, with respect to any private placement
memorandum, any information of a comparable nature, or (ii) the data files
containing information with respect to the Mortgage Loans as transmitted by
modem to the Purchaser by the Seller on June __, 1998 (as such transmitted
information may have been amended in writing by the Seller with the written
consent of the Purchaser subsequent to such transmission), or (b) any updated
collateral information provided by the Underwriter to a purchaser of the Bonds
derived from the Remittance Report obtained from the Seller or an Affiliate as
Servicer under the Pooling and Servicing Agreement, including the current loan
balances of the Mortgage Loans. The indemnity shall be in addition to any
liability that the Seller may otherwise have.
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule
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in accordance with the terms and conditions of this Agreement is mandatory. It
is specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser in the event of the Seller's failure to deliver the Mortgage Loans
on or before the Closing Date. The Seller hereby grants to the Purchaser a lien
on and a continuing security interest in the Seller's interest in each Mortgage
Loan and each document and instrument evidencing each such Mortgage Loan to
secure the performance by the Seller of its obligation hereunder, and the Seller
agrees that it holds such Mortgage Loans in custody for the Purchaser, subject
to the Purchaser's (i) right, prior to the Closing Date, to reject any Mortgage
Loan to the extent permitted by this Agreement, and (ii) obligation to deliver
or cause to be delivered the consideration for the Mortgage Loans pursuant to
Section 8 hereof. Any Mortgage Loans rejected by the Purchaser shall
concurrently therewith be released from the security interest created hereby.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred, and the security interest created by this Section 12
shall be deemed to have been released.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by fax and, receipt of which is confirmed by telephone, if to the
Purchaser, addressed to the Purchaser at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Mortgage Finance Group, fax (000) 000-0000, or such other
address as may hereafter be furnished to the Seller in writing by the Purchaser;
and if to the Seller, addressed to the Seller at 0000 Xxxxx Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000, fax (000) 000-0000, or to such other address as the
Seller may designate in writing to the Purchaser.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law,
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the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.
SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then (a) it is the express
intent of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other
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obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property and acknowledgments, receipts or confirmations
from persons holding such property shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:________________________________________
Name:
Title:
WMFC 1997-4 INC.
By:________________________________________
Name:
Title:
EXHIBIT 1
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
I, __________________ hereby certify that I am the duly
appointed __________________________ of WMFC 1997-4 Inc., a __________
corporation (the "Company"), and further certify, on behalf of the Company, as
follows:
1. Attached hereto as Attachment I is a true and correct copy
of the Articles of Incorporation and By-laws of the Company as in full
force and effect on the date hereof. Attached hereto as Attachment II
is a certificate of good standing, dated June __, 1998, issued by the
State of __________ with respect to the Company. No event has occurred
since the date thereof that has affected the good standing of the
Company under the laws of the State of __________.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Company
which, if adversely determined, individually or in the aggregate, would
materially and adversely affect the Company's ability to perform its
obligations under the Mortgage Loan Purchase Agreement, dated June __,
1998 (the "Mortgage Loan Purchase Agreement"), between Salomon Brothers
Mortgage Securities VII, Inc. (the "Purchaser") and the Company. No
proceedings looking toward merger, consolidation or liquidation,
dissolution or bankruptcy of the Company are pending or contemplated.
3. Each person who, as an officer or representative of the
Company, signed the Mortgage Loan Purchase Agreement and any other
document delivered prior hereto or on the date hereof in connection
with the transactions contemplated by the Mortgage Loan Purchase
Agreement, was at the respective times of such signing and delivery,
and is as of the date hereof, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures of such
persons appearing on such documents are their genuine signatures.
[4. Each of the Mortgage Loans referred to in the Mortgage
Loan Purchase Agreement and the Pooling and Servicing Agreement was
originated in accordance with Section 6(xx) of the Mortgage Loan
Purchase Agreement.]
5. Attached hereto as Attachment III is a true and correct
copy of the resolutions duly adopted by the Board of Directors of the
Company on June __, 1998 (the "Resolutions") with respect to the
transactions contemplated by the Mortgage Loan Purchase Agreement; said
Resolutions have not been amended or modified, annulled or revoked and
are in full force and effect on the date hereof.
6. All of the representations and warranties of the Company
contained in the Mortgage Loan Purchase Agreement are true and correct
in all material respects as of the
Closing Date, and no event has occurred which, with notice or the
passage of time or both, would constitute a default under the Mortgage
Loan Purchase Agreement.
7. The information set forth in the Mortgage Loan Schedule
attached as an exhibit to the Pooling and Servicing Agreement is true
and correct in all material respects.
8. The transactions contemplated in the Mortgage Loan Purchase
Agreement will be reported as a sale in the Company's financial
reports.
9. The information contained in the Purchaser's Prospectus
Supplement, dated June __, 1998, relating to the Mortgage Loans, the
Company, and its loan portfolio, specifically the information, in the
summary under the subheadings ["Summary-The Mortgage Pool," "Risk
Factors-Additional Risks Associated with the Mortgage Loans," "The
Mortgage Pool," "Pooling and Servicing Agreement-The Master Servicer"
and "--- The Subservicer"] is true and accurate and does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
10. The Company has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Closing Date.
11. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Purchase Agreement and the
Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated: June __, 1998
By:__________________________
Name:
[Seal] Title:
I, ____________________________, an [Assistant] Secretary of
WMFC 1997-4 Inc., hereby certify that __________________ is the duly appointed,
qualified and acting _______________________ of WMFC 1997-4 Inc. and that the
signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: June __, 1998
By:_________________________________
Name:_______________________________
Title:
EXHIBIT 2
[FORM OF OFFICER'S CERTIFICATE OF THE SERVICER]
I, __________________ hereby certify that I am the duly
appointed __________________________ of Wilshire Servicing Corporation, a
__________ corporation (the "Company"), and further certify, on behalf of the
Company, as follows:
1. Attached hereto as Attachment I is a true and correct copy
of the Articles of Incorporation and By-laws of the Company as in full
force and effect on the date hereof. Attached hereto as Attachment II
is a certificate of good standing, dated June __, 1998, issued by the
State of __________ with respect to the Company. No event has occurred
since the date thereof that has affected the good standing of the
Company under the laws of the State of __________.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Company
which, if adversely determined, individually or in the aggregate, would
materially and adversely affect the Company's ability to perform its
obligations under the Pooling and Servicing Agreement, dated as of June
1, 1998 (the "Pooling and Servicing Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. as depositor, the Company as master
servicer and Bankers Trust Company as Trustee. No proceedings looking
toward merger, consolidation or liquidation, dissolution or bankruptcy
of the Company are pending or contemplated.
3. Each person who, as an officer or representative of the
Company, signed the Pooling and Servicing Agreement and any other
document delivered prior hereto or on the date hereof in connection
with the transactions contemplated by the Mortgage Loan Purchase
Agreement, was at the respective times of such signing and delivery,
and is as of the date hereof, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment III is a true and correct
copy of the resolutions duly adopted by the Board of Directors of the
Company on June __, 1998 (the "Resolutions") with respect to the
transactions contemplated by the Pooling and Servicing Agreement; said
Resolutions have not been amended or modified, annulled or revoked and
are in full force and effect on the date hereof.
5. All of the representations and warranties of the Company
contained in the Pooling and Servicing Agreement are true and correct
in all material respects as of the Closing Date, and no event has
occurred which, with notice or the passage of time or both, would
constitute a default under the Pooling and Servicing Agreement.
6. The information contained in the Purchaser's Prospectus
Supplement, dated June __, 1998, relating to the Mortgage Loans, the
Company, and its loan portfolio, specifically the information, in the
summary under the subheadings ["Pooling and
Servicing Agreement-The Master Servicer" and "---The Subservicer"] is
true and accurate and does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
7. The Company has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Closing Date.
8. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Purchase Agreement and the
Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated: June __, 1998
By:________________________
Name:
[Seal] Title:
I, ____________________________, an [Assistant] Secretary of
Wilshire Servicing Corporation, hereby certify that __________________ is the
duly appointed, qualified and acting _______________________ of Wilshire
Servicing Corporation and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: June __, 1998
By:________________________________
Name:______________________________
Title:
EXHIBIT 3
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER WITH RESPECT TO CERTAIN
FACTS REGARDING THE SALE OF THE MORTGAGE LOANS]
Salomon Brothers Mortgage Securities VII, Inc.
Mortgage Pass-Through Certificates
Series 1998-WFC1
Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by WMFC 1997-4 Inc. ("WMFC") to Salomon Brothers Mortgage Securities
VII, Inc. (the "Depositor") pursuant to the Mortgage Loan Purchase Agreement,
dated June __, 1998 (the "Purchase Agreement"), between the Depositor and the
Company, and the simultaneous issuance of Mortgage Pass-Through Certificates,
Series 1998-WFC1, Class A, Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5, Class B-6, Class R-I and Class R-II (the "Certificates"), pursuant to a
Pooling and Servicing Agreement, dated as of June 1, 1998 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Wilshire Servicing
Corporation as master servicer (the "Master Servicer") and Bankers Trust Company
as trustee (the "Trustee"). In consideration for its purchase of the Mortgage
Loans, the Depositor will deliver to Wilshire immediately available funds, the
Class CE Certificates, the Class R-I Certificates, the Class R-II Certificates
and the Class R-III Certificates. The Depositor will sell the Class A, the Class
B-1, the Class B-2, the Class B-3 and the Class B-4 Certificates to Salomon
Brothers Inc (the "Underwriter") for offer and sale pursuant to the terms of an
Underwriting Agreement, dated June __, 1998 (the "Underwriting Agreement"),
between the Depositor and the Underwriter. The Purchase Agreement, the Pooling
and Servicing Agreement and the Underwriting Agreement are hereinafter
collectively referred to as the "Agreements." Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Agreements.
The undersigned is a duly appointed ___________________ of
WMFC and hereby certifies after reasonable investigation that:
1. The price to be paid to Wilshire for the Mortgage Loans will have been paid
in full at the closing of the sale pursuant to the Purchase Agreement, and no
agreement or arrangement exists or will exist that permits the modification of
the consideration for the Mortgage Loans subsequent to that sale. Wilshire will
not have any right or obligation to repurchase any Mortgage Loan,
except as provided in the Purchase Agreement.
1. Each Mortgage Note and each related Mortgage has been
appropriately prepared and duly executed and delivered by the related Mortgagor,
and each Mortgage has been appropriately recorded in the applicable jurisdiction
and any intervening endorsement of any Mortgage Note and any intervening
assignment of any Mortgage, which was required in order to transfer to Wilshire
ownership of the Mortgage Loans, was obtained and completed.
2. Each Mortgage Note has been endorsed or assigned in a
manner that satisfies all requirements necessary to transfer to the Trustee all
right, title and interest of the party so
endorsing or assigning, as noteholder or transferee thereof, in and to that
Mortgage Note, as provided in the Purchase Agreement and the Pooling and
Servicing Agreement. Each Assignment is in recordable form and is sufficient to
effect the assignment and transfer to the Depositor of the benefits of the
assignor, as original mortgagee or assignee thereof, under each Mortgage to
which that Assignment relates, as provided in the Purchase Agreement and the
Pooling and Servicing Agreement. Each Assignment has been or will be
appropriately recorded to the extent required under applicable law, as provided
in the Mortgage Loan Purchase Agreement.
3. Each original Mortgage Note, each original recorded
Mortgage, each original recorded intervening Assignment and each Assignment has
been delivered to the Trustee at the direction of the Depositor.
4. Immediately prior to the transfer of the Mortgage Loans by
Wilshire to the Depositor, Wilshire was the sole owner of each Mortgage Loan,
free and clear of any and all prior liens, mortgages, security interests,
pledges, participation interests, adverse claims, charges or other equities or
encumbrances of any nature, and had full right and authority to sell, assign and
transfer the Mortgage Loans.
5. No Mortgage Note, Mortgage or other document constituting
part of the Mortgage File reflects or will reflect on its face any interest that
is inconsistent with the ownership interest of the Trustee in and to the
Mortgage Loans or the transfer of the Mortgage Loans by
Wilshire to the Trustee.
6. The transfer of the Mortgage Loans by Wilshire to the
Depositor as provided in the Purchase Agreement is intended by Wilshire to be,
and is in fact, a contemporaneous
exchange in which Wilshire receives new value.
7. Wilshire was solvent at all relevant times prior to, and
will not be rendered insolvent by, the transfer of the Mortgage Loans to the
Depositor.
8. Wilshire did not transfer the Mortgage Loans to the
Depositor with any intent to hinder, delay or defraud any of Wilshire's
creditors.
9. Neither Wilshire nor any agent acting on behalf of it, has
been or will become a party to any fraud or illegality affecting any Mortgage
Loan or Certificate.
10. To the best of my knowledge, no breach of the Agreements
by any party, misrepresentation or failure by any party to perform all acts
required to be performed prior to the Closing Date, or fraud or mistake on the
part of any party to the Agreements in connection with the transactions
contemplated by the Agreements, has occurred or will occur.
11. To the best of my knowledge, no party to the Agreements
has taken or will take any action that is unreasonable, arbitrary or capricious,
or that is not taken in good faith or in a commercially reasonable manner,
affecting the Mortgage Loans in connection with the transactions contemplated by
the Agreements.
12. To the best of my knowledge, there is not and will not be
any other agreement among the parties to the Agreements that modifies or
otherwise supplements the agreement of the parties as expressed in the
Agreements.
13. Wilshire does not have and will not have any right to
modify or alter the terms of the transfer of the Mortgage Loans by Wilshire to
the Depositor, or to substitute or add any mortgage loan thereafter, except as
provided in the Agreements.
14. Wilshire will not take any action that is inconsistent
with the ownership interest in the Mortgage Loans evidenced by the Certificates.
Wilshire will promptly indicate to other persons or entities, when a response is
appropriate, that the Mortgage Loans were transferred by Wilshire to the
Depositor. Wilshire will not claim any ownership interest directly in the
Mortgage Loans other than that represented by Certificates in which it may have
an ownership interest from time to time and that represented by its role as
Master Servicer.
15. Under generally accepted accounting principles ("GAAP")
and for federal income tax purposes, Wilshire will report the transfer of the
Mortgage Loans to the Depositor, as provided in the Purchase Agreement as a sale
of all of its interest in the Mortgage Loans. Wilshire has been advised by or
has confirmed with its independent public accountants for similar transactions
that the sale will be so classified under GAAP in accordance with Statement No.
125 of the Financial Accounting Standards Board.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of the ___th day of June, 1998.
WMFC 1997-4 INC.
By:______________________________
Name:
Title:
EXHIBIT 4
[FORM OF OPINION OF COUNSEL TO THE SELLER AND THE SERVICER]
EXHIBIT 5
On the Cut-off Date, the Mortgage Loans shall comply with the following
conditions:
(i) the weighted average LTV for each of the Mortgage Loans at
origination shall be approximately _____%;
(ii) the maximum percentage concentration of Mortgage Loans secured by
mortgaged properties in any one zip code shall be approximately ____%;
(iii) the Mortgage Loans shall have a weighted average Mortgage Rate
equal to approximately ____% per annum and a weighted average Gross Margin equal
to approximately _____% per annum. ___% of the Mortgage Loans will be fixed-rate
Mortgage Loans and ___% of the Mortgage Loans will be adjustable-rate Mortgage
Loans, payable on the first day of each month. Interest on the Mortgage Loans
and the monthly payments will be adjusted on each Adjustment Date to equal the
sum of the Index and the margin, rounded to the next highest multiple of 0.125%,
subject to the Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate. The Mortgage Loans will not be subject to negative amortization
and will not provide for graduated payments. None of the Mortgage Loans will be
convertible to a fixed mortgage interest rate. None of the Mortgage Loans shall
be subject to temporary buydown agreements. Each of the Mortgage Loans shall be
fully-amortizing and none of the Mortgage Loans shall provide for the payment of
a balloon payment; and
(iv) Each Mortgaged Property is located in one of the states of
[Alabama, Arkansas, Arizona, California, Colorado, District of Columbia,
Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York,
North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming];
(v) No more than approximately ____% of the Mortgage Loans (measured by
the Cut-off Date Principal Balance) are secured by condominium units; no more
than ____% of the Mortgage Loans are secured by investor condominium units; and
all condominium Mortgage Loans have been originated on a form acceptable to FNMA
or FHLMC with such riders as have been acceptable to FNMA or FHLMC, as the case
may be;
(vi) No more than ____% of the Mortgage Loans (measured by the Cut-off
Date Principal Balance) are secured by two- to four-family dwellings. No more
than ____% of the Mortgage Loans (measured by the Cut-off Date Principal
Balance) are secured by Town Houses. No more than ____% of the Mortgage Loans
(measured by the Cut-off Date Principal Balance) are secured by Manufactured
Housing. No more than _____% of the Mortgage Loans (measured by the Cut-off Date
Principal Balance) are secured by dwelling units in PUDs. Approximately _____%
of the Mortgage Loans (measured by the Cut-off Date Principal Balance) are
secured by detached one-family dwellings;
(vii) No Mortgage Loan had a principal balance in excess of $_______ at
origination;
(viii) Each Mortgage Loan was originated on or after [month/year] and
each Mortgage Loan has a next Adjustment Date no later than [month/year];
(ix) On the basis of representations made by the Mortgagors in their
loan applications, no more than ____% of the Mortgage Loans are secured by
investor properties and at least _____% of the Mortgage Loans are owner-occupied
Mortgaged Properties (in each case measured by the Cut-off Date Principal
Balance);
(xi) As of the Cut-off Date, approximately _____% of the Mortgage Loans
were rate/term refinancings, approximately _____% of the Mortgage Loans were
cash out refinancings, approximately _____% of the Mortgage Loans were made to
purchase the related Mortgaged
Properties;
EXHIBIT E
FORM OF SERVICER REQUEST FOR RELEASE
[Date]
Bankers Trust Company, as Trustee
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc.,
Mortgage Pass-Through Certificates, Series 1998-WFC1
----------------------------------------------------
In connection with the administration of the Mortgage Files held by or
on behalf of you as trustee under the Pooling and Servicing Agreement, dated as
of June 1, 1998 (the "Pooling and Servicing Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. as depositor, Wilshire Servicing Corporation as
master servicer and Bankers Trust Company as trustee (in such capacity, the
"Trustee"), the undersigned hereby requests a release of the Mortgage File (or
the portion thereof specified below) held by or on behalf of you as Trustee with
respect to the following described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
Reason for requesting file (or portion thereof):
______ 1. Mortgage Loan paid in full.
The undersigned hereby certifies that all amounts received in
connection with the Mortgage Loan that are required to be
credited to the Collection Account pursuant to the Pooling and
Servicing Agreement, have been or will be so credited.
______ 2. Other. (Describe)
The undersigned acknowledges that the above Mortgage File (or requested
portion thereof) will be held by the undersigned in accordance with the
provisions of the Pooling and Servicing Agreement and will be returned to you or
your designee within ten (10) days of our receipt
-2-
thereof, unless the Mortgage Loan has been paid in full, in which case the
Mortgage File (or such portion thereof) will be retained by us permanently.
Capitalized terms not defined herein shall have the meanings assigned
to them in the Pooling and Servicing Agreement.
WILSHIRE SERVICING CORPORATION
as Master Servicer
By:___________________________
Name:
Title:
EXHIBIT F-1
FORM OF TRANSFEROR CERTIFICATE
[Date]
Bankers Trust Company, as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc. Mortgage
Pass-Through Certificates, Series 1998-WFC1 (the "Certificates")
----------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _________________ (the "Transferor") to _________________ (the
"Transferee") of Class ______ Certificates [having an initial [Certificate
Balance] [Certificate Notional Amount] as of June __, 1998 (the "Closing Date")
of $__________] [evidencing a ____% Percentage Interest in the related Class]
(the "Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, dated
as of June 1, 1998 (the "Pooling and Servicing Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. as depositor, Wilshire Servicing
Corporation as master servicer and Bankers Trust Company as trustee. All
capitalized terms not defined herein shall have the meanings assigned to them in
the Pooling and Servicing Agreement. The Transferor hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred
Certificates with the full right to transfer such Certificates free
from any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy or
accept a transfer, pledge or other disposition of any Certificate, any
interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to any Certificate, any interest in any Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation by means of general advertising or in any other
manner, or (e) taken any other action, which (in the case of any of the
acts described in clauses (a) through (e) hereof) would constitute a
distribution of any Certificate under the Securities Act of 1933, as
amended (the "Securities Act"), or would render the disposition of any
Certificate a
violation of Section 5 of the Securities Act or any state securities
laws, or would require registration or qualification of any Certificate
pursuant to the Securities Act or any state securities laws.
Very truly yours,
_________________________________
(Transferor)
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT F-2A
FORM I OF TRANSFEREE CERTIFICATE
(FOR QUALIFIED INSTITUTIONAL BUYERS)
[Date]
Bankers Trust Company, as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc. Mortgage Pass-Through
Certificates, Series 1998-WFC1 (the "Certificates")
--------------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _________________ (the "Transferor") to _________________ (the
"Transferee") of Class ______ Certificates [having an initial [Certificate
Balance] [Certificate Notional Amount] as of June __, 1998 (the "Closing Date")
of $__________] [evidencing a ____% Percentage Interest in the related Class]
(the "Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, dated
as of June 1, 1998 (the "Pooling and Servicing Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. as depositor, Wilshire Servicing
Corporation as master servicer and Bankers Trust Company as trustee. All
capitalized terms not defined herein shall have the meanings assigned to them in
the Pooling and Servicing Agreement. The Transferee hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a
"Qualified Institutional Buyer) as that term is defined in Rule 144A
("Rule 144A") under the Securities Act of 1933, as amended (the
"Securities Act") and has completed one of the forms of certification
to that effect attached hereto as Annex 1 and Annex 2. The Transferee
is aware that the sale to it of the Transferred Certificates is being
made in reliance on Rule 144A. The Transferee is acquiring the
Transferred Certificates for its own account or for the account of a
Qualified Institutional Buyer, and understands that such Transferred
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a Qualified Institutional Buyer that
purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
2. The Transferee has been furnished with all information
regarding (a) the Transferred Certificates and distributions thereon,
(b) the nature, performance and servicing of the Mortgage Loans, (c)
the Pooling and Servicing Agreement, and (d) any credit enhancement
mechanism associated with the Transferred Certificates, that it has
requested.
Very truly yours,
_______________________________
(Transferee)
By:____________________________
Name:
Title:
ANNEX 1 TO EXHIBIT F-2A
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company, as Certificate
Registrar, with respect to the mortgage pass-through certificates being
transferred (the "Transferred Certificates") as described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive officer
of the entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A under the Securities Act of 1933, as amended ("Rule
144A") because (i) the Transferee owned and/or invested on a discretionary basis
$______________________1 in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
territory or the District of Columbia, the business of which
is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statement, A COPY OF WHICH IS
ATTACHED HERETO, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of a
U.S. bank, and not more than 18 months preceding such date of
sale for a foreign bank or equivalent institution.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association
--------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
or equivalent institution and (b) has an audited net worth of
at least $25,000,000 as demonstrated in its latest annual
financial statement, A COPY OF WHICH IS ATTACHED HERETO, as of
a date not more than 16 months preceding the date of sale of
the Certificate in the case of a U.S. savings and loan
association, and not more than 18 months preceding such date
of sale for a foreign savings and loan association or
equivalent institution.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as
amended.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, U.S. territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as
amended.
___ OTHER. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete
Annex 2 rather than this Annex 1.)____________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee did not include any of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such
securities to the Transferee, unless the Transferee reports its securities
holdings in its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has been
published, in which case the securities were valued at market. Further, in
determining such aggregate amount, the Transferee may have included securities
owned by subsidiaries of the Transferee, but only if such subsidiaries are
consolidated with the Transferee in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Transferred Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Transferee may be in reliance on
Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in
each case where the Transferee is purchasing for an account other than its own,
such account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or
before the date of such purchase, promptly after they become available.
_________________________________
Print Name of Transferee
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
ANNEX 2 TO EXHIBIT F-2A
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company, as Certificate
Registrar, with respect to the mortgage pass-through certificate being
transferred (the "Transferred Certificates") as described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive officer
of the entity purchasing the Transferred Certificates (the "Transferee") or, if
the Transferee is a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act of 1933, as amended ("Rule 144A") because the
Transferee is part of a Family of Investment Companies (as defined below), is an
executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment company
registered under the Investment Company Act of 1940, as amended and (ii) as
marked below, the Transferee alone owned and/or invested on a discretionary
basis, or the Transferee's Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year. For purposes
of determining the amount of securities owned by the Transferee or the
Transferee's Family of Investment Companies, the cost of such securities was
used, unless the Transferee or any member of the Transferee's Family of
Investment Companies, as the case may be, reports its securities holdings in its
financial statements on the basis of their market value, and no current
information with respect to the cost of those securities has been published, in
which case the securities of such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded
securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the
Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the
Transferred Certificates only for the
Yes No Transferee's own account?
6. If the answer to the foregoing question is "no", then in
each case where the Transferee is purchasing for an account other than its own,
such account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Transferred Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Transferee or Adviser
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Transferee
Date:__________________________________
EXHIBIT F-2B
FORM II OF TRANSFEREE CERTIFICATE
(FOR INSTITUTIONAL ACCREDITED INVESTORS)
[Date]
Bankers Trust Company, as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1998-WFC1 (the "Certificates")
---------------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _______________________ (the "Transferor") to
_______________________________ (the "Transferee") of Class ___ Certificates
[having an initial [Certificate Balance] [Certificate Notional Amount] as of
June __, 1998 (the "Closing Date") of $__________] [evidencing a ___% Percentage
Interest in the related Class] (the "Transferred Certificates"). The
Certificates, including the Transferred Certificates, were issued pursuant to
the Pooling and Servicing Agreement, dated as of June 1, 1998 (the "Pooling and
Servicing Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. as
depositor (the "Depositor"), Wilshire Servicing Corporation as master servicer
and Bankers Trust Company as trustee (in such capacity, the "Trustee"). All
capitalized terms not defined herein shall have the meanings assigned to them in
the Pooling and Servicing Agreement. The Transferee hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferee is acquiring the Transferred Certificates
for its own account for investment and not with a view to or for sale or
transfer in connection with any distribution thereof, in whole or in part, in
any manner which would violate the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Class of
Certificates to which the Transferred Certificates belong has not been and will
not be registered under the Securities Act or registered or qualified under any
applicable state securities laws, (b) none of the Depositor, the Trustee or the
Certificate Registrar is obligated so to register or qualify the Class of
Certificates to which the Transferred Certificates belong, and (c) no
Transferred Certificate may be resold or transferred unless it is (i) registered
pursuant to the Securities Act and registered or qualified pursuant any
applicable state securities laws or (ii) sold or transferred in transactions
which are exempt from such registration and qualification and the Certificate
Registrar has received either: (A) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
F-1 to the Pooling and Servicing Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
either as Exhibit F-2A
-2-
or as Exhibit F-2B to the Pooling and Servicing Agreement; or (B) an opinion of
counsel satisfactory to the Trustee with respect to the availability of such
exemption from registration under the Securities Act, together with copies of
the written certification(s) from the transferor and/or transferee setting forth
the facts surrounding the transfer upon which such opinion is based.
3. The Transferee understands that it may not sell or
otherwise transfer any Transferred Certificate except in compliance with the
provisions of Section 5.02 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed, and that each Transferred Certificate will
bear the following legends:
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION
OF THIS CERTIFICATE OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE
SUCH REGISTRATION OR QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A)
TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR (B) TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR SUCH INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY
OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has
(a) offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicited any offer to buy or accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) made any general solicitation with respect to any Certificate, any interest
in any Certificate or any other similar security by means of general advertising
or in any other manner, or (e) taken any other action with respect to any
Certificate, any interest in any Certificate or any other similar security,
which (in the case of any of the acts described in clauses (a) through (e)
above) would constitute a distribution of the Transferred Certificates under the
Securities Act, would render the disposition of the Transferred Certificates a
violation of Section
-3-
5 of the Securities Act or any state securities law or would require
registration or qualification of the Transferred Certificates pursuant thereto.
The Transferee will not act, nor has it authorized or will it authorize any
person to act, in any manner set forth in the foregoing sentence with respect to
any Certificate, any interest in any Certificate or any other similar security.
5. The Transferee has been furnished with all information
regarding (a) the Depositor, (b) the Transferred Certificates and distributions
thereon, (c) the Pooling and Servicing Agreement and the Trust Fund created
pursuant thereto, (d) the nature, performance and servicing of the Mortgage
Loans, and (e) all related matters, that it has requested. If the Transferee did
not purchase the Transferred Certificates from the Transferor in connection with
the initial issuance of the Transferred Certificates and was provided with a
copy of the Private Placement Memorandum dated June __, 1998 (the "PPM")
relating to the original sales (the "Original Sales") of the Certificates by the
Depositor, the Transferee acknowledges that the PPM was prepared by the
Depositor solely for use in connection with the Original Sales and the Depositor
did not participate in or facilitate in any way the acquisition of the
Transferred Certificate by the Transferee from the Transferor, and the
Transferee agrees that it will look solely to the Transferor and not to the
Depositor with respect to any damage, liability, claim or expense arising out
of, resulting from or in connection with (x) any error or omission, or alleged
error or omission, contained in the PPM, or (y) any information, development or
event arising after the date of the PPM.
6. The Transferee is an "accredited investor" as defined in
any of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the Securities Act
or an entity in which all of the equity owners come within such paragraphs. The
Transferee has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Transferred Certificate; the Transferee has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision; and the Transferee is able to bear the economic risks of such
investment and can afford a complete loss of such investment.
Very truly yours,
__________________________________
(Transferee)
By:_______________________________
Name:
Title:
EXHIBIT F-3
FORM OF TRANSFEREE CERTIFICATE
IN CONNECTION WITH ERISA
[Date]
Bankers Trust Company, as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc. Mortgage Pass-Through
Certificates, Series 1998-WFC1 (the "Certificates")
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Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _________________ (the "Transferor") to _________________ (the
"Transferee") of Class ______ Certificates [having an initial Certificate
Balance as of June __, 1998 (the "Closing Date") of $__________] [evidencing a
____% Percentage Interest in the related Class] (the "Transferred
Certificates"). The Certificates, including the Transferred Certificates, were
issued pursuant to the Pooling and Servicing Agreement, dated as of June 1, 1998
(the "Pooling and Servicing Agreement"), among Salomon Brothers Mortgage
Securities VII, Inc. as depositor, Wilshire Servicing Corporation as master
servicer and Bankers Trust Company as trustee. All capitalized terms not defined
herein shall have the meanings assigned to them in the Pooling and Servicing
Agreement. The Transferee hereby certifies, represents and warrants to you, as
Certificate Registrar, as follows (check the applicable paragraph):
___ The Transferee is neither (A) an employee benefit plan or other
retirement arrangement, including an individual retirement account or
annuity, a Xxxxx plan or a collective investment fund or separate
account in which such plans, accounts or arrangements are invested,
including, without limitation, an insurance company general account,
that is subject to ERISA or the Code (each, a "Plan"), nor (B) a Person
who is directly or indirectly purchasing the Transferred Certificates
on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan; or
___ The Transferee is using funds from an insurance company general account
to acquire the Transferred Certificates on back of this page, and the
acquisition and holding of the Transferred Certificates is permissible
under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Master Servicer or the
Trust Fund to any obligation in addition to those undertaken in the
Pooling and Servicing Agreement and the purchase and holding of such
Certificates by such Person is exempt from the prohibited transaction
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provisions of Section 406 of ERISA and Section 4975 of the Code under
Prohibited Transaction Class Exemption ("PTCE") 95-60; or
___ The Transferee is an "investment fund" described in PTCE 84-14, and the
acquisition and holding of the Transferred Certificates is permissible
under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Master Servicer or the
Trust Fund to any obligation in addition to those undertaken in the
Pooling and Servicing Agreement and the purchase and holding of such
Certificates by such Person is exempt from the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code under
PTCE 84-14; or
___ The Transferee is an insurance company, insurance service or insurance
organization (an "Insurer") qualified to do business in the applicable
state and the Insurer has issued to the Plan a "guaranteed benefit
policy" within the meaning of Section 401(b)(2) of ERISA such that the
assets of the Plan are deemed to include such policy but are not deemed
to include any assets of such Insurer pursuant to Section 401(b)(2) of
ERISA.
Very truly yours,
________________________________
(Transferee)
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT G-1
FILE LAYOUT FOR MASTER SERVICER REMITTANCE REPORT TO TRUSTEE
EXHIBIT H-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
FOR TRANSFERS OF RESIDUAL CERTIFICATES
STATE OF )
) ss:
COUNTY OF )
____________________, being first duly sworn, deposes and says
that:
1. I am the ____________________ of ___________________, (the
prospective transferee (the "Transferee") of Salomon Brothers Mortgage
Securities VII, Inc., Mortgage Pass-Through Certificates, Series 1998-WFC1,
Class [R-I] [R-II], evidencing a ____% Percentage Interest in such Class (the
"Residual Certificates")), a ________________________ duly organized and validly
existing under the laws of ____________________, on behalf of which I make this
affidavit. Capitalized terms not defined herein shall have the meanings assigned
to them in the Pooling and Servicing Agreement pursuant to which the Residual
Certificates were issued (the "Pooling and Servicing Agreement").
2. The Transferee (i) is, and as of the date of transfer will
be, a "Permitted Transferee" and will endeavor to remain a "Permitted
Transferee" for so long as it holds the Residual Certificates, and (ii) is
acquiring the Residual Certificates for its own account or for the account of
another prospective transferee from which it has received an affidavit in
substantially the same form as this affidavit. A "Permitted Transferee" is any
Person other than a "disqualified organization" or a possession of the United
States. (For this purpose, a "disqualified organization" means the United
States, any state or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an instrumentality, all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. The Transferee is aware (i) of the tax that would be
imposed on transfers of the Residual Certificates to "disqualified
organizations" under the Code that applies to all transfers of the Residual
Certificates; (ii) that such tax would be on the transferor, or, if such
transfer is through an agent (which Person includes a broker, nominee or
middleman) for a non- Permitted Transferee, on the agent; (iii) that the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such Person an affidavit that the transferee is a
Permitted Transferee and, at the time of transfer, such Person does not have
actual knowledge that the affidavit is false; and (iv) that the Residual
Certificates may be a "noneconomic residual interest" within the meaning of
Treasury regulation Section 1.860E-1(c) and that the transferor of a
"noneconomic residual interest" will remain liable for any taxes due with
respect
to the income on such residual interest, unless no significant purpose of the
transfer is to enable the transferor to impede the assessment or collection of
tax.
4. The Transferee is aware of the tax imposed on a
"pass-through entity" holding the Residual Certificates if at any time during
the taxable year of the pass-through entity a non-Permitted Transferee is the
record holder of an interest in such entity. (For this purpose, a "pass-through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will
not register any transfer of the Residual Certificates by the Transferee unless
the Transferee's transferee, or such transferee's agent, delivers to the
Certificate Registrar, among other things, an affidavit and agreement in
substantially the same form as this affidavit and agreement. The Transferee
expressly agrees that it will not consummate any such transfer if it knows or
believes that any representation contained in such affidavit and agreement is
false.
6. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificate will only be
owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is
_________________.
8. The Transferee has reviewed the provisions of Section
5.02(d) of the Pooling and Servicing Agreement, a description of which
provisions is set forth in the Residual Certificates (in particular, clause
(iii)(A) of Section 5.02(d) which authorizes the Trustee to deliver payments on
the Residual Certificate to a Person other than the Transferee and clause
(iii)(B) of Section 5.02(d) which authorizes the Trustee to negotiate a
mandatory sale of the Residual Certificates, in either case, in the event that
the Transferee holds such Residual Certificates in violation of Section
5.02(d)); and the Transferee expressly agrees to be bound by and to comply with
such provisions.
9. No purpose of the Transferee relating to its purchase or
any sale of the Residual Certificates is or will be to impede the assessment or
collection of any tax.
10. The Transferee hereby represents to and for the benefit of
the transferor that the Transferee intends to pay any taxes associated with
holding the Residual Certificates as they become due, fully understanding that
it may incur tax liabilities in excess of any cash flows generated by the
Residual Certificates.
11. The Transferee will, in connection with any transfer that
it makes of the Residual Certificates, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit H-2 to the Pooling
and Servicing Agreement in which it will represent and warrant, among other
things, that it is not transferring the Residual Certificates to impede the
assessment or collection of any tax and that it has at the time of such transfer
conducted a reasonable investigation of the financial condition of the proposed
transferee as contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and
has satisfied the requirements of such provision.
12. The Transferee is a citizen or resident of the United
States, a corporation, a partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to the authority of its Board of
Directors, by its ____________________, attested by its ________________, this
___ day of _______, 199__.
[TRANSFEREE]
By:_________________________________
Name:
Title:
ATTEST:
By:_______________________________
Name:
Title:
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 Transferee,
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 Transferee
Subscribed and sworn before me this ___ day of
_____________________, 199__.
________________________________
NOTARY PUBLIC
COUNTY OF ________________
STATE OF _________________
My Commission expires the _______ day of
___________, 199__.
EXHIBIT H-2
FORM OF TRANSFEROR CERTIFICATE
FOR TRANSFERS OF RESIDUAL CERTIFICATES
[Date]
Bankers Trust Company, as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Salomon 1998-WFC1
Re: Salomon Brothers Mortgage Securities VII, Inc. Mortgage Pass-Through
Certificates, Series 1998-WFC1 (the "Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _________________ (the "Transferor") to _________________ (the
"Transferee") of [Class R-I] [Class R-II] Certificates evidencing a ____%
Percentage Interest in the related Class (the "Residual Certificates"). The
Certificates, including the Residual Certificates, were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1998, among Salomon Brothers Mortgage Securities VII, Inc. as
depositor, Wilshire Servicing Corporation as master servicer and Bankers Trust
Company as trustee. All capitalized terms not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement. The Transferor
hereby certifies, represents and warrants to you, as Certificate Registrar,
that:
1. No purpose of the Transferor relating to the transfer of
the Residual Certificates by the Transferor to the Transferee is or will be to
impede the assessment or collection of any tax.
2. The Transferor understands that the Transferee has
delivered to you a Transfer Affidavit and Agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit H-1. The Transferor does not know or
believe that any representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Transferor has determined that the Transferee has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the transfer of
the Residual Certificates may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
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Very truly yours,
_______________________________
(Transferor)
By:____________________________
Name:__________________________
Title:_________________________
SCHEDULE 1
MORTGAGE LOAN SCHEDULE WITH RESPECT TO SUB-POOL 1
[TO BE PROVIDED UPON REQUEST]
SCHEDULE 2
MORTGAGE LOAN SCHEDULE WITH RESPECT TO SUB-POOL 2
[TO BE PROVIDED UPON REQUEST]
