Exhibit 4.1
EXECUTION COPY
BEAR XXXXXXX MORTGAGE SECURITIES INC.,
SELLER,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
MASTER SERVICER,
and
THE CHASE MANHATTAN BANK,
TRUSTEE
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 1998
--------------------------------
Bear Xxxxxxx Mortgage Securities Inc.
Mortgage Pass-Through Certificates
Series 1998-1
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions.............................................................I-1
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
2.01. Conveyance of Mortgage Loans to Trustee..........................II-1
2.02. Acceptance of Mortgage Loans by Trustee..........................II-3
2.03. Representations, Warranties and Covenants of the Master Servicer.II-5
2.03A. Assignment of Interest in the Mortgage Loan Purchase Agreement...II-6
2.04. Substitution of Mortgage Loans...................................II-7
2.05. [Reserved].......................................................II-8
2.06. Issuance of Certificates.........................................II-8
2.07. Representations and Warranties Concerning the Seller.............II-8
2.08. The Custodian....................................................II-9
ARTICLE III
Administration and Servicing of Mortgage Loans
3.01. Master Servicer to Master Service................................III-1
3.02. Sub-Servicing Agreement Between a Master Servicer and
Sub-Servicers.............................................III-2
3.03. Successor Sub-Servicers..........................................III-2
3.04. [Reserved].......................................................III-2
3.05. Assumption of Master Servicing by Trustee........................III-2
3.06. Collection of Mortgage Loan Payments.............................III-3
3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts........................................III-4
3.08. Access to Certain Documentation and Information Regarding
the Mortgage Loans........................................III-4
3.09. Maintenance of Primary Mortgage Insurance Policies;
Collection Thereunder.....................................III-5
3.10. Maintenance of Hazard Insurance and Fidelity Coverage............III-5
3.11. Due-on-Sale Clauses; Assumption Agreements.......................III-7
3.12. Realization Upon Defaulted Mortgage Loans........................III-8
3.13. Trustee to Cooperate; Release of Mortgage Files..................III-8
3.14. Master Servicing and Sub-Servicing Compensation..................III-10
3.15. Annual Statement of Compliance...................................III-10
3.16. Annual Independent Public Accountants' Servicing Report..........III-11
3.17. REMIC-Related Covenants..........................................III-11
3.18. Additional Information...........................................III-11
3.19. Optional Purchase of Defaulted FNMC Mortgage Loans...............III-12
ARTICLE IV
Accounts
4.01. Protected Accounts and Master Servicer Collection Accounts.......IV-1
4.02. Certificate Account..............................................IV-3
4.03. Permitted Withdrawals and Transfers from the Certificate Account.IV-4
4.04 Custody Account...................................................IV-7
ARTICLE V
Certificates
5.01. Certificates.....................................................V-1
5.02. Registration of Transfer and Exchange of Certificates............V-10
5.03. Mutilated, Destroyed, Lost or Stolen Certificates................V-14
5.04. Persons Deemed Owners............................................V-15
5.05. Transfer Restrictions on Residual Certificates...................V-15
5.06. Restrictions on Transferability of Private Certificates..........V-16
5.07. ERISA Restrictions...............................................V-17
5.08. Rule 144A Information............................................V-17
ARTICLE VI
Payments to Certificateholders
6.01. Distributions on the Certificates................................VI-1
6.02. [Reserved].......................................................VI-8
6.03. Allocation of Losses.............................................VI-8
6.04. [Reserved].......................................................VI-12
6.05. Payments.........................................................VI-12
6.06. Statements to Certificateholders.................................VI-12
6.07. [Reserved].......................................................VI-14
6.08. Monthly Advances.................................................VI-15
6.09. Compensating Interest Payments...................................VI-15
6.10. Reports of Foreclosures and Abandonment of Mortgaged Property....VI-15
ARTICLE VII
The Master Servicer
7.01. Liabilities of the Master Servicer...............................VII-1
7.02. Merger or Consolidation of the Master Servicer...................VII-1
7.03. Indemnification of the Trustee...................................VII-1
7.04. Limitation on Liability of the Master Servicer and Others........VII-2
7.05. Master Servicer Not to Resign....................................VII-3
7.06. [Reserved].......................................................VII-3
7.07. Sale and Assignment of Master Servicing..........................VII-3
ARTICLE VIII
Default
8.01. Events of Default................................................VIII-1
8.02. Trustee to Act; Appointment of Successor.........................VIII-2
8.03. Notification to Certificateholders...............................VIII-3
8.04. Waiver of Defaults...............................................VIII-3
8.05. List of Certificateholders.......................................VIII-4
ARTICLE IX
Concerning the Trustee
9.01. Duties of Trustee................................................IX-1
9.02. Certain Matters Affecting the Trustee............................IX-2
9.03. Trustee Not Liable for Certificates or Mortgage Loans............IX-4
9.04. Trustee May Own Certificates.....................................IX-5
9.05. Trustee's Fees and Expenses......................................IX-5
9.06. Eligibility Requirements for Trustee.............................IX-5
9.07. Insurance........................................................IX-5
9.08. Resignation and Removal of the Trustee...........................IX-5
9.09. Successor Trustee................................................IX-6
9.10. Merger or Consolidation of Trustee...............................IX-7
9.11. Appointment of Co-Trustee or Separate Trustee....................IX-7
9.12. Master Servicer Shall Provide Information as Reasonably Required.IX-8
9.13. Federal Information Returns and Reports to Certificateholders....IX-8
ARTICLE X
Xxxxxxxxxxx
00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Seller or its Designee or
Liquidation of the Mortgage Loans.........................X-1
10.02 Additional Termination Requirements..............................X-3
ARTICLE XI
Miscellaneous Provisions
11.01. Intent of Parties...............................................XI-1
11.02. Amendment.......................................................XI-1
11.03. Recordation of Agreement........................................XI-2
11.04. Limitation on Rights of Certificateholders......................XI-2
11.05. Acts of Certificateholders......................................XI-3
11.06. [Reserved]......................................................XI-4
11.07. Governing Law...................................................XI-4
11.08. Notices.........................................................XI-4
11.09. Severability of Provisions......................................XI-4
11.10. Successors and Assigns..........................................XI-5
11.11. Article and Section Headings....................................XI-5
11.12. Counterparts....................................................XI-5
11.13 Notice to Rating Agencies........................................XI-5
EXHIBITS
Exhibit A-1 - Form of Face of Certificates
Exhibit A-2 - Form of Reverse of Certificates
Exhibit B-1 - Mortgage Loan Schedule
Exhibit B-2 - Group 1 Mortgage Loan Schedule
Exhibit B-3 - Group 2 Mortgage Loan Schedule
Exhibit B-4 - Group 3 Mortgage Loan Schedule
Exhibit C - Representations and Warranties of BSMCC Concerning
the Mortgage Loans
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Initial Certification
Exhibit H - Form of Final Certification
Exhibit I - Planned Balances of the PAC Certificates
Exhibit J - List of BA Mortgage Loans for which Mortgage
Notes are Lost
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of February 1, 1998, among
Bear Xxxxxxx Mortgage Securities Inc., a Delaware corporation, as the seller
(the "Seller"), Norwest Bank Minnesota, National Association, a national banking
association ("Norwest"), as a master servicer (the "Master Servicer"), and The
Chase Manhattan Bank, a New York banking corporation, not in its individual
capacity but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from Bear Xxxxxxx Mortgage Capital Corporation ("BSMCC"). On the Closing
Date, the Seller will sell the Mortgage Loans and certain other property to the
Trust Fund and receive in consideration therefor Certificates evidencing the
entire beneficial ownership interest in the Trust Fund. Norwest will be the
Master Servicer for the Mortgage Loans.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC IV to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC IV Regular Certificates will
be designated "regular interests" in such REMIC and the Class R-4 Certificate
will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC III Regular Certificates
will be designated "regular interests" in such REMIC and the Class R-3
Certificates will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC II Regular Certificates will
be designated "regular interests" in such REMIC and the Class R-2 Certificates
will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of Certificates except for the
Residual Certificates will be designated "regular interests" in such REMIC and
the Class R-1 Certificates will be designated the "residual interests" in such
REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of
the Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $1,154,784,435.69. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the
Seller, the Master Servicer and the Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCOUNT: The Custody Account, the Certificate Account (including each
subaccount thereof), the Protected Accounts, the Master Servicer Collection
Account or the Servicing Accounts as the context may require.
ACCRUED CERTIFICATE INTEREST: For any Certificate (other than the
Class P Certificate) for any Distribution Date, the interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
Current Principal Amount (or in the case of the Class A-8 and Class X
Certificates, the Notional Amount) of such Certificate immediately prior to such
Distribution Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months, less (i) in the case of an interest bearing Senior
Certificate of a Certificate Group, such Certificate's share of any Net Interest
Shortfall and the interest portion of any Excess Losses and, after the
applicable Cross-Over Date, the interest portion of any Realized Losses
applicable to its related Mortgage Loan Group and (ii) in the case of a
Subordinate Certificate, such Certificate's share of any Net Interest Shortfall
and the interest portion of any Realized Losses applicable to its related
Mortgage Loan Group.
ADJUSTMENT AMOUNT: For each anniversary of the Cut-off Date, the
"Adjustment Amount" for each Mortgage Loan Group shall be equal to the amount,
if any, by which the applicable Special Hazard Loss Amount (without giving
effect to the deduction of the Adjustment Amount for such anniversary) exceeds
the lesser of (A) an amount calculated by the Depositor and approved by each of
S&P and Fitch, which amount shall not be less than $500,000, and (B) the greater
of (x) 1.0% (or if greater than 1.0%, the highest percentage of Mortgage Loans
of the applicable Mortgage Loan Group by principal balance secured by Mortgaged
Properties in any California zip code) of the outstanding principal balance of
all the Mortgage Loans of the applicable Mortgage Loan Group on the Distribution
Date immediately preceding such anniversary and (y) twice the outstanding
principal balance of the Mortgage Loan of the applicable Mortgage Loan Group
which has the largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary.
ADVANCING DATE: The Business Day preceding the related Distribution
Date.
AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates in each Certificate Group:
(a) as to any Distribution Date and amounts distributable
pursuant to clauses (i) and (iii) of the applicable Subordinate
Optimal Principal Amount for such Certificate Group, the fraction,
expressed as a percentage, the numerator of which is the Current
Principal Amount of such Class and the denominator of which is the
aggregate Current Principal Amount of all Classes of the Subordinate
Certificates of such Certificate Group; and
(b) as to any Distribution Date and amounts distributable
pursuant to clauses (ii), (iv) and (v) of the applicable Subordinate
Optimal Principal Amount for such Certificate Group, and as to each
Class of Subordinate Certificates of such Certificate Group (other
than the Class of Subordinate Certificates of such Certificate Group
having the lowest numerical designation as to which the Class
Prepayment Distribution Trigger shall not be applicable) for which (x)
the related Class Prepayment Distribution Trigger has been satisfied
on such Distribution Date, the fraction, expressed as a percentage,
the numerator of which is the Current Principal Amount of such Class
and the denominator of which is the aggregate Current Principal Amount
of all Classes of Subordinate Certificates of such Certificate Group
and (y) the related Class Prepayment Distribution Trigger has not been
satisfied on such Distribution Date, 0%; provided that if on a
Distribution Date, the Current Principal Amount of any Class of
Subordinate Certificates of such Certificate Group for which the
related Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant
to this clause (b), to the extent of such Class's remaining Allocable
Share, shall be distributed to the remaining Classes of Subordinate
Certificates of such Certificate Group which satisfy the related Class
Prepayment Distribution Trigger and to the Subordinate Class having
the lowest numerical designation in reduction of their respective
Current Principal Amounts in the order of their numerical Class
designations.
APPLICABLE CREDIT RATING: A credit rating of AAA, in the case of S&P
or a rating of AAA, in the case of Fitch, for any long-term deposit or security
or a rating of A-1+, in the case of S&P, or Fitch-1 in the case of Fitch, for
any short-term deposit or security.
APPLICABLE STATE LAW: For purposes of Section 9.13(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the Master
Servicer by either (i) an Opinion of Counsel delivered to it, or (ii) written
notice from the appropriate taxing authority as to the applicability of such
state law.
APPRAISED VALUE: For any Mortgaged Property, the amount set forth as
the appraised value of such Mortgaged Property in an appraisal made for the
mortgage originator in connection with its origination of the related Mortgage
Loan.
ASSUMED FINAL DISTRIBUTION DATE: With respect to each Class of Group 1
Certificates, March 25, 2028, with respect to each Class of Group 2
Certificates, March 25, 2028, and with respect to each Class of Group 3
Certificate, February 25, 2013.
AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group 1 Available Funds, the Group 2 Available Funds and the Group 3 Available
Funds for such Distribution Date.
BA MORTGAGE LOANS: The Group 1 Mortgage Loans that were originated or
acquired by BAFSB or BANTSA, as indicated on the Mortgage Loan Schedule relating
to the Group 1 Mortgage Loans, and sold to BSMSI pursuant to the BA
Sub-Servicing Agreement.
BA SUB-SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement dated as of February 26, 1998 among BSMCC, BANTSA and BAFSA, as
amended or supplemented from time to time.
BAFSB: Bank of America, Federal Savings Bank, or its successors in
interest.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. xx.xx. 101-1330.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction, as reported by the applicable Sub-Servicer
to the Master Servicer.
BANTSA: Bank of America National Trust and Savings Association, or its
successors in interest.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Residual Certificates.
BSMCC: Bear Xxxxxxx Mortgage Capital Corporation.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City or in the jurisdiction in which the applicable
Sub-Servicer or Master Servicer are authorized or obligated by law or executive
order to be closed.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibit A-1 and A-2, with
the blanks therein appropriately completed.
CERTIFICATE ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.02, which shall be denominated "The Chase
Manhattan Bank,, as Trustee f/b/o holders of Bear Xxxxxxx Mortgage Securities
Inc. Mortgage Pass-Through Certificates, Series 1998-1 - Certificate Account"
which shall have three subaccounts as provided in Section 4.02.
CERTIFICATE ACCOUNT ADVANCE: As of any Determination Date, the amount
on deposit in a Protected Account or Custody Account which is not required to be
transferred to the Certificate Account for distribution during the calendar
month in which such Determination Date occurs but which is deposited in a
subaccount of the Certificate Account and used to make a distribution to
Certificateholders during such calendar month on account of Scheduled Payments
on the Mortgage Loans due on the Due Date for such month not being paid on or
before such Determination Date except insofar as such unpaid amounts are the
result of application of the Relief Act.
CERTIFICATE GROUP: Certificate Group 1, Certificate Group 2 and
Certificate Group 3.
CERTIFICATE GROUP 1: The Group of Certificates which is composed of
the Group 1 Certificates.
CERTIFICATE GROUP 2: The Group of Certificates which is composed of
the Group 2 Certificates.
CERTIFICATE GROUP 3: The Group of Certificates which is composed of
the Group 3 Certificates.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
CERTIFICATE REGISTER: The register maintained pursuant to Section
5.02.
CERTIFICATEHOLDER: A Holder of a Certificate.
CLASS: With respect to the Certificates, X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, P, X, X-0,
X-0, X-0, X-0, X-0, X-0, 2-A-1, 0-X-0, 0-X-0, 0-X-0, 0-X-0, 0-X-0, 0-X-0, 2-A-8,
2-B-1, 2-B-2, 2-B-3, 2-B-4, 2-B-5, 2-B-6, 3-A, 3-B-1, 3-B-2, 3-B-3, 3-B-4,
3-B-5, 3-B-6, X-0, X-0, X-0 and R-4.
CLASS A-18 OPTIMAL PRINCIPAL AMOUNT: As defined in section
6.01(a)(i)(D).
CLASS A-18 PRO RATA OPTIMAL PRINCIPAL AMOUNT: As defined in Section
6.01(a)(i)(E).
CLASS 2-A-8 OPTIMAL PRINCIPAL AMOUNT: As defined in Section 6.01
(a)(v)(C).
CLASS 2-A-8 PRO RATA OPTIMAL PRINCIPAL AMOUNT: As defined in Section
6.01(a)(v)(D).
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates in any Certificate Group for any Distribution Date, the Class
Prepayment Distribution Trigger is satisfied if the fraction (expressed as a
percentage), the numerator of which is the aggregate Current Principal Amount of
such Class and each Class of Subordinate Certificates in the same Certificate
Group subordinate thereto, if any, and the denominator of which is the Scheduled
Principal Balance of all of the Mortgage Loans in the related Mortgage Loan
Group as of the related Due Date, equals or exceeds such percentage calculated
as of the Closing Date.
CLASS P CASH SHORTFALL: As defined in Section 6.01(a)(i)(C).
CLASS P DEFERRED AMOUNT: With respect to each Distribution Date
through the Group 1 Cross-Over Date, the aggregate of all amounts allocable on
such Distribution Date to the Class P Certificates, in respect of the principal
portion of Realized Losses (other than Excess Losses) on Discount Mortgage
Loans, and the applicable Class P Cash Shortfall, and all amounts previously
allocated in respect of such losses (other than Excess Losses) and such
shortfalls to the Class P Certificates, and not distributed on prior
Distribution Dates. No interest shall accrue on any Class P Deferred Amount.
CLASS P DEFERRED PAYMENT WRITEDOWN AMOUNT: With respect to any
Distribution Date, the amount if any, distributed on such date in respect of the
Class P Deferred Amounts, respectively, pursuant to Section 6.01 (a)(i) FOURTH.
CLASS P PRINCIPAL DISTRIBUTION AMOUNT: With respect to the Class P
Certificates, on each Distribution Date, an amount, without duplication, equal
to the sum of:
(i) the applicable PO Percentage of all scheduled payments of
principal due on each Discount Mortgage Loan in the related Mortgage
Loan Group on the related Due Date as specified in the amortization
schedule at the time applicable thereto (after adjustments for
previous principal prepayments, but before any adjustment to such
amortization schedule by reason of any other bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period);
(ii) the applicable PO Percentage of the Scheduled Principal
Balance of each Discount Mortgage Loan in the related Mortgage Loan
Group which was the subject of a Voluntary Principal Prepayment in
full received by the related Sub-Servicer during the applicable
Prepayment Period;
(iii) the applicable PO Percentage of all Voluntary Principal
Prepayments in part for each Discount Mortgage Loan in the related
Mortgage Loan Group received during the applicable Prepayment Period;
(iv) the lesser of (a) the applicable PO Percentage of the sum of
(A) all Net Liquidation Proceeds allocable to principal on each
Discount Mortgage Loan in the related Mortgage Loan Group which became
a Liquidated Mortgage Loan during the related Prepayment Period (other
than a Discount Mortgage Loan described in clause (B)) and (B) the
Scheduled Principal Balance of each such Discount Mortgage Loan
purchased by an Insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any, or otherwise; and (b) the applicable PO Percentage of the
Scheduled Principal Balance of each Discount Mortgage Loan in the
related Mortgage Loan Group which became a Liquidated Mortgage Loan
during the related Prepayment Period (other than a Discount Mortgage
Loan described in clause (B)) and (B) the Scheduled Principal Balance
of each such Mortgage Loan that was purchased by an Insurer from the
Trustee during the related Prepayment Period pursuant to the related
Primary Mortgage Insurance Policy, if any, or otherwise, less (C) in
the case of clause (b), the applicable PO Percentage of the principal
portion of Excess Losses (other than Debt Service Reductions) with
respect to Discount Mortgage Loans in the related Mortgage Loan Group
incurred during the related Prepayment Period; and
(v) the applicable PO Percentage of the sum of (a) the Scheduled
Principal Balance of each Discount Mortgage Loan or REO Property in
the related Mortgage Loan Group which was repurchased by BSMCC or a
Sub-Servicer on such Distribution Date pursuant to Section 2.02 or
2.03(A)(b) and (b) the excess, if any, of the Scheduled Principal
Balance of a Discount Mortgage Loan in the related Mortgage Loan Group
that has been replaced by BSMCC with a Substitute Mortgage Loan
pursuant to Section 2.04 on such Distribution Date over the Scheduled
Principal Balance of such Substitute Mortgage Loan.
CLOSING DATE: February 27, 1998.
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST PAYMENTS: As defined in Section 6.09.
COOPERATIVE: A corporation that has been formed for the purpose of
cooperative apartment ownership.
COOPERATIVE ASSETS: Shares issued by Cooperatives, the related Lease
and any other collateral securing the Cooperative Loans.
COOPERATIVE BUILDING: The building and other property owned by a
Cooperative.
COOPERATIVE LOAN: The indebtedness of a Mortgagor evidenced by a
Mortgage Note which is secured by Cooperative Assets and which is being sold to
the Purchaser pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Final Mortgage Loan Schedule.
COOPERATIVE UNIT: A specific dwelling unit in a Cooperative Building
as to which exclusive occupancy rights have been granted pursuant to a Lease.
CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 000 Xxxx 00xx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Services.
CORRESPONDING CLASS: As indicated in Section 5.01(c).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
a Class A-8 or Class X Certificate) as of any Distribution Date, the initial
principal amount of such Component or Certificate, as reduced by (i) all amounts
distributed on previous Distribution Dates on such Certificate with respect to
principal, (ii) the principal portion of all Realized Losses allocated prior to
such Distribution Date to such Certificate, taking account of the Loss
Allocation Limitation applicable to the Certificate Group of such Certificate
and (iii) in the case of a Subordinate Certificate of a Certificate Group, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for such Group and the applicable Class P Deferred Payment
Writedown Amount, in each case for previous Distribution Dates. With respect to
any Class of Certificates (other than the Class A-8 or Class X Certificates),
the Current Principal Amount thereof will equal the sum of the Current Principal
Amounts of all Certificates in such Class. Notwithstanding the foregoing, solely
for purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R-1, Class R-2, Class R-3 and Class R-4 Certificates after
the Distribution Date on which they receive the distribution of the last dollar
of their original principal amount shall be deemed to have a Current Principal
Amount equal to their Current Principal Amount on the day immediately preceding
such Distribution Date.
CUSTODIAL AGREEMENT: Any agreement between the Trustee and the entity
named therein pursuant to which such entity agrees to act as custodian of some
or all of the Mortgage Files.
CUSTODIAN: Norwest Bank Minnesota, National Association, or any
successor custodian appointed in accordance with this Agreement and any
applicable Custodial Agreement that has accepted such appointment in connection
therewith.
CUSTODY ACCOUNT: A trust account created and maintained pursuant to
Section 4.04.
CUT-OFF DATE: February 1, 1998.
CUT-OFF DATE BALANCE: $1,154,784,435.69
DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which
a Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of
any proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEBTOR RELIEF LAWS: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium, reorganization,
or similar debtor relief laws affecting the rights of creditors generally from
time to time in effect.
DEFAULTED FNMC MORTGAGE LOAN: Any Defaulted Mortgage Loan that is an
FNMC Mortgage Loan.
DEFAULTED MORTGAGE LOAN: Any Mortgage Loan as to which the Mortgagor
has failed to make unexcused payment in full of three or more consecutive
Scheduled Payments.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution
(commercial bank, federal savings bank mutual savings bank or savings and loan
association) or trust company (which may include the Trustee), the deposits of
which are fully insured by the FDIC to the extent provided by law.
DETERMINATION DATE: The 18th day of the month of the Distribution
Date, or if such day is not a Business Day, the preceding Business Day.
DISCOUNT MORTGAGE LOAN: Any Group 1 Mortgage Loan with a Net Rate less
than 6.75% per annum.
DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC CUSTODIAN: The Chase Manhattan Bank, or its successors in interest
as custodian for the Depository.
DUE DATE: With respect to each Mortgage Loan, the date in each month
on which its Scheduled Payment is due if such due date is the first day of a
month and otherwise is deemed to be the first day of the following month.
DUE PERIOD: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending at the close of business on the first day of
the month in which the Distribution Date occurs.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: An event described in Section 8.01.
EXCESS FRAUD LOSSES: Any Fraud Loss occurring after the Fraud Coverage
Termination Date.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
EXCESS LOSSES: Means, collectively, Excess Fraud Losses and Excess
Special Hazard Losses.
EXCESS SERVICING FEE: With respect to each Group 2 and Group 3
Mortgage Loan, the per annum rate of between 0.0% and 0.25%, as indicated on
Exhibits B-3 and B-4 hereto.
EXCESS SPECIAL HAZARD LOSSES: Any Special Hazard Losses occurring
after the Special Hazard Termination Date.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
FITCH: Fitch IBCA Inc., or its successors in interest.
FNMA: Federal National Mortgage Association or any successor thereto.
FNMC: First Nationwide Mortgage Corporation, or its successors in
interest.
FNMC MORTGAGE LOANS: The Group 2 and Group 3 Mortgage Loans, each of
which was sold to BSMSI pursuant to the FNMC Sub-Servicing Agreement.
FNMC SUB-SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement dated as of February 20, 1998 between BSMCC and FNMC, as amended or
supplemented from time to time.
FRAUD COVERAGE TERMINATION DATE: For any Mortgage Loan Group, the
Distribution Date upon which the applicable Fraud Loss Amount has been reduced
to zero or a negative number (or the applicable Group 1, Group 2 or Group 3
Cross-Over Date, if earlier.
FRAUD LOSS: Any Realized Loss attributable to fraud in the origination
of the Related Mortgage Loan, as reported by the applicable Sub-Servicer to the
Master Servicer.
FRAUD LOSS AMOUNT: Upon the initial issuance of the Certificates, the
"Fraud Loss Amount" will equal 1.0% of the aggregate Scheduled Principal
Balances of the Group 1, Group 2 or Group 3 Mortgage Loans, as the case may be,
as of the Cut-off Date (or approximately, $7,939,100, $3,162,334 and $446,409,
respectively). As of any Distribution Date prior to the first anniversary of the
Cut-off Date, the Fraud Loss Amount for each Mortgage Loan Group will equal the
initial Fraud Loss Amount, minus the aggregate amount of Fraud Losses that would
have been allocated to the Subordinate Certificates of the related Group in the
absence of the Loss Allocation Limitation since the Cut-off Date. As of any
Distribution Date from the first through the third anniversaries of the Cut-off
Date, the Fraud Loss Amount for each Mortgage Loan Group will equal (1) the
lesser of (a) the applicable Fraud Loss Amount as of the most recent anniversary
of the Cut-off Date and (b) 1.0% of the aggregate outstanding principal balance
of all of the Mortgage Loans of the related Group as of the most recent
anniversary of the Cut-off Date minus (2) the Fraud Losses that would have been
allocated to the Subordinate Certificates of the related Group in the absence of
the applicable Loss Allocation Limitation since the most recent anniversary of
the Cut-off Date. As of any Distribution Date after the third and through the
fifth anniversary of the Cut-off Date, the Fraud Loss Amount for each Mortgage
Loan Group will equal (i) the lesser of (a) the applicable Fraud Loss Amount as
of the most recent anniversary of the Cut-off Date and (b) 0.50% of the
aggregate outstanding principal balance of all Mortgage Loans of the related
group as of the most recent anniversary of the Cut-off Date minus (2) the Fraud
Losses that would have been allocated to the Subordinate Certificates of the
related Group in the absence of the applicable Loss Allocation Limitation since
the most recent anniversary of the Cut-off Date. After the fifth anniversary of
the Cut-off Date, the Fraud Loss Amount for each Group shall be zero.
FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates (other than the Class A-8 and Class X Certificates), the fractional
undivided interest evidenced by any Certificate of such Class the numerator of
which is the Current Principal Amount of such Certificate and the denominator of
which is the Current Principal Amount of such Class. With respect to the Class
A-8 and Class X Certificates, the fractional undivided interest evidenced by
such Certificate, the numerator of which is the Notional Amount of such
Certificate and the denominator of which is the Notional Amount of such Class.
With respect to the Certificates in the aggregate, the fractional undivided
interest evidenced by (i) each Class A-8 or Class X Certificate will be deemed
to equal 1% multiplied by a fraction, the numerator of which is the Notional
Amount of such Certificate and the denominator of which is the Notional Amount
of all of the Class A-8 and Class X Certificates, respectively, (ii) a Class
R-1, Class R-2, Class R-3 or Class R-4 Certificate will be deemed to equal 1%
multiplied by a fraction the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the aggregate Current
Principal Amount of such respective Class and (iii) a Certificate of any other
Class will be deemed to equal 94% (plus an additional 1% if and when each of the
Class A-8 and Class X Certificates have been paid in full prior to the date of
determination) multiplied by a fraction, the numerator of which is the Current
Principal Amount of such Certificate and the denominator of which is the Current
Principal Amount of all the Certificates.
FUMC: First Union Mortgage Corporation, or its successors in interest.
FUMC SUB-SERVICING AGREEMENT: The Servicing Agreement dated as of
February 1, 1998 between FUMC and BSMCC, as amended or supplemented from time to
time.
FUNB: First Union National Bank, or its successors in interest.
FUNB MORTGAGE LOANS: The Group 1 Mortgage Loans that were originated
or acquired by First Union National Bank (excluding the NB Mortgage Loans), as
indicated on the Mortgage Loan Schedule relating to the Group 1 Mortgage Loans,
and sold to BSMSI pursuant to the FUNB Sale Agreement.
FUNB SALE AGREEMENT: The Mortgage Loan Purchase Agreement (Servicing
Retained) dated as of February 20, 1998 between FUNB and BSMCC, pursuant to
which BSMCC purchased the FUNB Mortgage Loans and the NB Mortgage Loans, as
amended or supplemented from time to time.
FUNDS TRANSFER DATE: The Business Day prior to the related
Distribution Date in any month or if such day is not a Business Day, the
preceding Business Day.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
GROUP AVAILABLE FUNDS: Reference to any one of the Group 1 Available
Funds, Group 2 Available Funds or Group 3 Available Funds.
GROUP 1 AVAILABLE FUNDS, GROUP 2 AVAILABLE FUNDS, GROUP 3 AVAILABLE
FUNDS: With respect to any Distribution Date, an amount equal to the aggregate
of the following amounts with respect to the Mortgage Loans in Mortgage Loan
Groups 1, 2 and 3, respectively: (a) all previously undistributed payments on
account of principal (including the principal portion of Scheduled Payments,
Principal Prepayments and the principal portion of Net Liquidation Proceeds) and
all previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date, (b) any Monthly
Advances (including Certificate Account Advances) and Compensating Interest
Payments by the Master Servicer or a Sub-Servicer with respect to such
Distribution Date and (c) any amount reimbursed by the Master Servicer or a
Sub-Servicer pursuant to 4.04(d) in connection with losses on Permitted
Investments, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds received
after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances (including
Certificate Account Advances);
(v) amounts of Monthly Advances (including Certificate Account
Advances) determined to be Nonrecoverable Advances;
(vi) amounts permitted to be withdrawn from the Certificate
Account pursuant to Subsection 4.03(a); and
(vii) [Reserved]
GROUP 1 CERTIFICATES: The Group 1 Senior Certificates and the Group 1
Subordinate Certificates.
GROUP 2 CERTIFICATES: The Group 2 Senior Certificates and the Group 2
Subordinate Certificates.
GROUP 3 CERTIFICATES: The Group 3 Senior Certificates and the Group 3
Subordinate Certificates.
GROUP 1 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 1 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
GROUP 2 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 2 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
GROUP 3 CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group 3 Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
GROUP 1 LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.03(b)(F) hereof.
GROUP 2 LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.03(b)(F) hereof.
GROUP 3 LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.03(b)(F) hereof.
GROUP 1 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP 2 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP 3 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP 1 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 1 Subordinate
Certificates as of the Cut-off Date.
GROUP 2 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 2 Subordinate
Certificates as of the Cut-off Date.
GROUP 3 ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group 3 Subordinate
Certificates as of the Cut-off Date.
GROUP 1 SENIOR CERTIFICATES: The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class
A-17, Class A-18, Class P, Class X, Class R-1 and Class R-2 Certificates.
GROUP 2 SENIOR CERTIFICATES: The Class 2-A-1, Class 2-A-2, Class
2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6, Class 2-A-7, Class 2-A-8 and Class
R-3 Certificates.
GROUP 3 SENIOR CERTIFICATES: The Class 3-A and Class R-4 Certificates.
GROUP 1 SENIOR P&I CERTIFICATES: The Group 1 Senior Certificates
(other than the Class P Certificates).
GROUP 2 SENIOR P&I CERTIFICATES: The Group 2 Senior Certificates.
GROUP 3 SENIOR P&I CERTIFICATES: The Group 3 Senior Certificates.
GROUP 1 SENIOR P&I OPTIMAL PRINCIPAL AMOUNT, GROUP 2 SENIOR P&I
OPTIMAL PRINCIPAL AMOUNT OR GROUP 3 SENIOR P&I OPTIMAL PRINCIPAL AMOUNT: As to
any Distribution Date, an amount equal to the sum, without duplication, of:
(i) the applicable Senior Percentage of the applicable Non-PO
Percentage of all scheduled payments of principal allocated to the
Scheduled Principal Balance due on each Outstanding Mortgage Loan in
the related Mortgage Loan Group on the related Due Date as specified
in the amortization schedule at the time applicable thereto (after
adjustments for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of all Voluntary Principal Prepayments in
part received during the related Prepayment Period with respect to
each Mortgage Loan in the related Mortgage Loan Group, together with
the applicable Senior Prepayment Percentage of the applicable Non-PO
Percentage of the Scheduled Principal Balance of each Mortgage Loan in
the related Mortgage Loan Group which was the subject of a Voluntary
Principal Prepayment in full during the related Prepayment Period;
(iii) the lesser of (a) the applicable Senior Prepayment
Percentage of the applicable Non-PO Percentage for the relevant
Certificate Group of the sum of (A) all Net Liquidation Proceeds for
such Certificate Group, allocable to principal received in respect of
each Mortgage Loan of the related Mortgage Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period (other
than Mortgage Loans described in clause (B)) and (B) the Scheduled
Principal Balance of each such Mortgage Loan purchased by an Insurer
from the Trustee during the related Prepayment Period, pursuant to the
related Primary Mortgage Insurance Policy, if any, or otherwise; and
(b) the applicable Senior Percentage of the applicable Non-PO
Percentage for such Certificate Group of the sum of (A) the Scheduled
Principal Balance of each Mortgage Loan of the related Mortgage Loan
Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than the Mortgage Loans described in clause
(B)) and (B) the Scheduled Principal Balance of each such Mortgage
Loan that was purchased by an Insurer from the Trustee during the
related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise less (C) in the case of clause
(b), the then applicable Senior Percentage of the Non-PO Percentage
for such Certificate Group of the principal portion of Excess Losses
(other than Debt Service Reductions) on each Mortgage Loan in the
related Mortgage Loan Group incurred during the related Prepayment
Period; and
(iv) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the Scheduled Principal Balance of
each Mortgage Loan or REO Property of the related Mortgage Loan Group
which was purchased by BSMCC or a Sub-Servicer on such Distribution
Date pursuant to Section 2.02, 2.03A(b) or 3.19;
(v) the applicable Senior Prepayment Percentage of the applicable
Non-PO Percentage of the excess, if any, of the Scheduled Principal
Balance of a Mortgage Loan in the related Mortgage Loan Group that has
been replaced by BSMCC with a Substitute Mortgage Loan pursuant to
Section 2.04 on such Distribution Date over the Scheduled Principal
Balance of such Substitute Mortgage Loan.
GROUP 1 SENIOR PERCENTAGE: Initially 95.50%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amounts of all the
Group 1 Senior P&I Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Mortgage Loans (other than the
PO Percentage) in the related Mortgage Loan Group immediately preceding such
Distribution Date.
GROUP 2 SENIOR PERCENTAGE: Initially 96.00%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage obtained by dividing the
aggregate Current Principal Amounts of all Group 2 Senior P&I Certificates
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Mortgage Loans (other than the PO Percentage) in the
related Mortgage Loan Group immediately preceding such Distribution Date.
GROUP 3 SENIOR PERCENTAGE: Initially 97.75%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage obtained by dividing the
aggregate Current Principal Amounts of all the Group 3 Senior P&I Certificates
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Mortgage Loans (other than the PO Percentage) in the
related Mortgage Loan Group immediately preceding such Distribution Date.
GROUP 1 SENIOR PREPAYMENT PERCENTAGE, GROUP 2 SENIOR PREPAYMENT
PERCENTAGE OR GROUP 3 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Senior Prepayment Percentage
------------------------------------------------------------------------------
March 25, 1998 - February 25, 2003 100%
March 25, 2003 - February 25, 2004 Applicable Senior Percentage for
the related Certificate Group plus
70% of the applicable Subordinate
Percentage for such Certificate
Group
March 25, 2004 - February 25, 2005 Applicable Senior Percentage for
the related Certificate Group plus
60% of the applicable Subordinate
Percentage for such Certificate
Group
March 25, 2005 - February 25, 2006 Applicable Senior Percentage for
the related Certificate Group plus
40% of the applicable Subordinate
Percentage for such Certificate
Group
March 25, 2006 - February 25, 2007 Applicable Senior Percentage for
the related Certificate Group plus
20% of the applicable Subordinate
Percentage for such Certificate
Group
March 25, 2007 and thereafter Applicable Senior Percentage
Notwithstanding the foregoing, if on any Distribution Date the applicable Senior
Percentage for a Certificate Group exceeds the applicable Senior Percentage for
such Certificate Group as of the Cut-Off Date, the Senior Prepayment Percentage
for such Certificate Group for such Distribution Date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Senior
Certificates of a Certificate Group are reduced to zero, the Senior Prepayment
Percentage for such Certificate Group shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.
In addition, no reduction of the applicable Senior Prepayment Percentage for a
Certificate Group shall occur on any Distribution Date unless, as of the last
day of the month preceding such Distribution Date, (i) the aggregate Scheduled
Principal Balance of Mortgage Loans in the related Mortgage Loan Group
delinquent 60 days or more (including for this purpose any such Mortgage Loans
in foreclosure and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the sum of the aggregate Current Principal Amount of
the Subordinate Certificates of such Certificate Group does not exceed 50% and
(ii) cumulative Realized Losses on such Mortgage Loans do not exceed (a) 30% of
the applicable Original Subordinate Principal Balance of such Certificate Group
if such Distribution Date occurs between and including March 2003 and February
2004, (b) 35% of the Original Subordinate Principal Balance of such Certificate
Group if such Distribution Date occurs between and including March 2004 and
February 2005, (c) 40% of the applicable Original Subordinate Principal Balance
if such Distribution Date occurs between and including March 2005 and February
2006, (d) 45% of the applicable Original Subordinate Principal Balance for such
Certificate Group if such Distribution Date occurs between and including March
2006 and February 2007, and (e) 50% of the applicable Original Subordinate
Principal Balance for such Certificate Group if such Distribution Date occurs
during or after March 2007.
GROUP 1 SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
GROUP 2 SUBORDINATE CERTIFICATES: The Class 2-B-1, Class 2-B-2, Class
2-B-3, Class 2-B-4, Class 2-B-5 and Class 2-B-6 Certificates.
GROUP 3 SUBORDINATE CERTIFICATES: The Class 3-B-1, Class 3-B-2, Class
3-B-3, Class 3-B-4, Class 3-B-5 and Class 3-B-6 Certificates.
GROUP 1 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Group 1 Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses and any applicable
Class P Deferred Payment Writedown Amount in reduction of the Current Principal
Amounts of such Certificates on such Distribution Date) exceeds (b) the
aggregate Scheduled Principal Balances of the Group 1 Mortgage Loans on the Due
Date related to such Distribution Date.
GROUP 2 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all the Group 2 Certificates (after giving effect to the distribution
of principal and the allocation of applicable Realized Losses in reduction of
the Current Principal Amounts of such Certificates on such Distribution Date)
exceeds (b) the aggregate Scheduled Principal Balances of the Group 2 Mortgage
Loans on the Due Date related to such Distribution Date.
GROUP 3 SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any
Distribution Date, the amount by which (a) the sum of the Current Principal
Amounts of all of the Group 3 Certificates (after giving effect to the
distribution of principal and the allocation of applicable Realized Losses in
reduction of the Current Principal amounts of such Certificates on such
Distribution Date) exceeds (b) the aggregate Scheduled Principal Balances of the
Group 3 Mortgage Loans on the Due Date related to such Distribution Date.
GROUP 1 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT, GROUP 2 SUBORDINATE
OPTIMAL PRINCIPAL AMOUNT OR GROUP 3 SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to
any Distribution Date, an amount equal to the sum, without duplication, of the
following (but in no event greater than the aggregate Current Principal Amounts
of the Subordinate Certificates of the relevant Certificate Group immediately
prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the applicable
Non-PO Percentage of the principal portion of all Monthly Payments due
on each Outstanding Mortgage Loan in the related Mortgage Loan Group
on the related Due Date as specified in the amortization schedule at
the time applicable thereto (after adjustment for previous Principal
Prepayments but before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period);
(ii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of each Voluntary Principal Payment in
part during the related Prepayment Period with respect to each
Mortgage Loan in the related Mortgage Loan Group and the applicable
Subordinate Prepayment Percentage of the applicable Non-PO Percentage
of the Scheduled Principal Balance of each Mortgage Loan in the
related Mortgage Loan Group that was the subject of a Voluntary
Principal Prepayment in full during the related Prepayment Period;
(iii) the excess, if any, of the applicable Non-PO Percentage of
(A) all Net Liquidation Proceeds allocable to principal received
during the related Prepayment Period over (B) the sum of the amounts
distributable pursuant to clause (iii) of the definition of Senior P&I
Optimal Principal Amount for the applicable Certificate Group and in
the case of Certificate Group 1, clause (iv) of the definition of the
Class P Principal Distribution Amount, on such Distribution Date;
(iv) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Scheduled Principal
Balance of each Mortgage Loan or REO Property in the related Mortgage
Loan Group which was purchased by BSMCC or a Sub-Servicer on such
Distribution Date pursuant to Section 2.02, 2.03(A)(b) or 3.19 and (b)
the difference, if any, between the Scheduled Principal Balance of a
Mortgage Loan in the related Mortgage Loan Group that has been
replaced by BSMCC with a substitute Mortgage Loan pursuant to Section
2.04 on such Distribution Date over the Scheduled Principal Balance of
such substitute Mortgage Loan; and
(v) on the Distribution Date on which the Current Principal
Amounts of the Senior P&I Certificates of the relevant Certificate
Group have all been reduced to zero, 100% of any applicable Senior P&I
Optimal Principal Amount; and (vi) minus, in the case of the Group B
Subordinate Certificates, any Principal Prepayments and/or other
amounts allocable to the Group 1 Senior Certificates or Group 2 Senior
Certificates from Mortgage Loan Group 1 or 2 pursuant to Section
6.01(a)(iv) and/or Section 6.01(c).
After the aggregate current Principal Amounts of the relevant Subordinate
Certificates of the relevant Certificate Group have been reduced to zero, the
Subordinate Optimal Principal Amount for such Certificate Group shall be zero.
GROUP 1 SUBORDINATE PERCENTAGE, GROUP 2 SUBORDINATE PERCENTAGE OR
GROUP 3 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
applicable Senior Percentage of the relevant Certificate Group.
GROUP 1 SUBORDINATE PREPAYMENT PERCENTAGE, GROUP 2 SUBORDINATE
PREPAYMENT PERCENTAGE OR GROUP 3 SUBORDINATE PREPAYMENT PERCENTAGE: On any
Distribution Date, 100% minus the applicable Senior Prepayment Percentage for
the relevant Certificate Group, except that on any Distribution Date after the
Current Principal Amounts of the Senior Certificates of the relevant Certificate
Group have each been reduced to zero, the Subordinate Prepayment Percentage for
such Certificate Group will equal 100%.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer, a
Sub-Servicer or the Trustee or any Affiliate thereof shall be deemed not to be
outstanding and the Fractional Undivided Interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of Fractional
Undivided Interests necessary to effect any such consent has been obtained.
INDEMNIFIED PERSONS: The Trustee, its officers, directors, agents and
employees and any separate Co-trustee and its officers, directors, agents and
employees.
INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer, or any Affiliate of the Seller or the
Master Servicer, and (c) is not connected with the Seller or the Master
Servicer, or any Affiliate as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any Primary
Mortgage Insurance Policy, standard hazard insurance policy, flood insurance
policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
INSURED EXPENSES: Expenses covered by any Insurance Policy.
INSURER: Any issuer of an Insurance Policy.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which the
Distribution Date occurs, commencing in February 1998.
INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Voluntary Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an
amount determined as follows:
(a) partial principal prepayments: The difference between (i)
one month's interest at the applicable Net Rate on the amount of such
prepayment and (ii) the amount of interest for the calendar month of
such prepayment (adjusted to the applicable Net Rate) received at the
time of such prepayment;
(b) principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at
the applicable Net Rate on the Scheduled Principal Balance of such
Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest for the calendar month of such prepayment (adjusted to the
applicable Net Rate) received at the time of such prepayment;
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage
Loan, the excess of (i) 30 days' interest (or, in the case of a
principal prepayment in full, interest to the date of prepayment) on
the Scheduled Principal Balance thereof (or, in the case of a principal
prepayment in part, on the amount so prepaid) at the related Net Rate
over (ii) 30 days' interest (or, in the case of a principal prepayment
in full, interest to the date of prepayment) on such Scheduled
Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the
Mortgagor as limited by application of the Relief Act.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any Class of Certificates in connection with
such purchase, substantially in the form set forth as Exhibit F-1 hereto.
LIBOR: Will be established as provided in Section 5.01(f).
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
related Sub-Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the related Sub-Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the related
Sub-Servicer or the Master Servicer and not recovered by the Master Servicer or
any Sub-Servicer under any Primary Mortgage Insurance Policy for reasons other
than the Sub-Servicer's failure to ensure the maintenance of or compliance with
a Primary Mortgage Insurance Policy, such expenses including (a) property
protection expenses, (b) property sales expenses, (c) foreclosure and sale
costs, including court costs and reasonable attorneys' fees, and (d) similar
expenses reasonably paid or incurred in connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
LOAN SUMMARY AND REMITTANCE REPORT: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.07(b).
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.03(c)
hereof.
LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on Exhibit J hereto.
MASTER SERVICER: Norwest Bank Minnesota, National Association, or its
successor in interest, or any successor master servicer with respect to the
Mortgage Loans appointed as herein provided.
MASTER SERVICER COLLECTION ACCOUNT: The Account created and maintained
pursuant to Section 4.01(d).
MASTER SERVICER COMPENSATION: As defined in Section 4.01(d).
MASTER SERVICING FEE: As to any Distribution Date, an amount equal to
the investment earnings, net of investment losses, on amounts in the Master
Servicer Collection Account and the Certificate Account.
MONTHLY ADVANCE: The advance (including a Certificate Account Advance)
required to be made by a Sub-Servicer pursuant to its Sub-Servicing Agreement or
the Master Servicer on the related Advancing Date pursuant to Section 6.08.
MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
MORTGAGE LOAN: A mortgage loan (including Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04
and held as a part of the Trust Fund, as identified in the Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
MORTGAGE LOAN GROUP: Any one of Mortgage Loan Group 1, Mortgage Loan
Group 2, or Mortgage Loan Group 3, each of which constitutes a separate
sub-trust.
MORTGAGE LOAN GROUP 1: The group of Mortgage Loans which is composed
of the Group 1 Mortgage Loans.
MORTGAGE LOAN GROUP 2: The group of Mortgage Loans which is composed
of the Group 2 Mortgage Loans.
MORTGAGE LOAN GROUP 3: The group of Mortgage Loans which is composed
of the Group 3 Mortgage Loans.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of February 25, 1998, between BSMCC, as seller, and Bear Xxxxxxx
Mortgage Securities Inc., as purchaser, and all amendments thereof and
supplements thereto.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B-1
with respect to the Mortgage Loans and as amended from time to time to reflect
the repurchase or substitution of Mortgage Loans pursuant to this Agreement,
which shall separately identify the Group 1 Mortgage Loans, the Group 2 Mortgage
Loans and the Group 3 Mortgage Loans.
MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NBMC: NationsBanc Mortgage Corporation, or its successors in interest.
NB MORTGAGE LOANS: The Group 1 Mortgage Loans that were originated or
acquired by NBMC, as indicated on the Mortgage Loan Schedule relating to the
Group 1 Mortgage Loans, and sold to BSMSI pursuant to the FUNB Sale Agreement.
NB SUB-SERVICING AGREEMENT: The Mortgage Loan Sale and Servicing
Agreement dated as of February 1, 1998 between FUNB and NBMC, which was assigned
to BSMCC on February 20, 1998 pursuant to the Assignment, Assumption and
Recognition Agreement among BSMCC, FUNB and NBMC, each as amended or
supplemented from time to time.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the related Sub-Servicer or Master Servicer in accordance with the related
Sub-Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Sub-Servicer or Master Servicer and Monthly Advances including
Certificate Account Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Sub-Servicing Fee and, with respect to
the Group 2 and Group 3 Mortgage Loans, less the applicable Excess Servicing Fee
(in each case, expressed as a per annum rate).
NON-DISCOUNT MORTGAGE LOAN: Any Group 1 Mortgage Loan with a Net Rate
equal to or greater than 6.75%, and any Group 2 or Group 3 Mortgage Loan.
NON-PO PERCENTAGE: (i) with respect to any Discount Mortgage Loan in
Mortgage Loan Group 1, the Net Rate thereof divided by 6.75%, (ii) with respect
to any Non-Discount Mortgage Loan in Mortgage Loan Group 1, 100% and (iii) with
respect to any Mortgage Loan in Mortgage Loan Group 2 or Mortgage Loan Group 3,
100%.
NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or
is proposed to be made by a Sub-Servicer or the Master Servicer and (ii) which,
in the good faith judgment of such Sub-Servicer or the Master Servicer, as
evidenced by an Officer's Certificate (in the case of the Master Servicer), will
not or, in the case of a proposed advance, would not, be ultimately recoverable
by the Sub-Servicer or the Master Servicer from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such advance was
made.
NORWEST: Norwest Bank Minnesota, National Association, and its
successors in interest.
NOTIONAL AMOUNT: On any Distribution Date, with respect to (X) the
Class A-8 Certificates, an amount equal to the sum of (i) the product of (A)
8.0000000000% and (B) the Current Principal Amount of the Class A-1
Certificates, (ii) the product of (A) 8.0000000000% and (B) the Current
Principal Amount of the Class A-2 Certificates, (iii) the product of
(A)8.1481481481 % and (B) the Current Principal of the Class A-3 Certificates,
(iv) the product of (A) 7.4074074074% and (B) the Current Principal Amount of
the Class A-4 Certificates, (v) the product of (A) 5.9259259259% and (B) the
current Principal Amount of the Class A-5 Certificates, (vi) the product of (A)
3.7037037037 % and (B) the current Principal Amount of the Class A-6
Certificates and (vii) the product of (A) 1.4814814815% and (B) the Current
Principal Amount of the Class A-7 Certificates and (Y) the Class X Certificates,
the aggregate Scheduled Principal Balances of the Group 1 Mortgage Loans
immediately following the Due Date in the month prior to the month of the
Distribution Date.
OFFERED CERTIFICATE: Any Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class A-12, Class A-14, Class A-15, Class A-16, Class A-17, Class
A-18, Class P, Class X, Class B-1, Class B-2, Class B-3, Class 2-A-1, Class
2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6, Class 2-A-7, Class
2-A-8, Class 2-B-1, Class 2-B-2, Class 2-B-3, Class 3-A, Class 3-B-1, Class
3-B-2, Class 3-B-3, Class R-1, Class R-2, Class R-3 and Class R-4 Certificate.
OFFERED SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3,
Class 2-B-1, Class 2-B-2, Class 2-B-3, Class 3-B-1, Class 3-B-2 and Class 3-B-3
Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer and
delivered to the Trustee or the Custodian, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for a Sub-Servicer or
the Master Servicer.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: Each of the Group 1 Original
Subordinate Principal Balance, Group 2 Original Subordinate Principal Balance
and Group 3 Original Subordinate Principal Balance.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except that in instances where either (i) or (ii) is unavailable, the other may
be used to determine Original Value, or if both (i) and (ii) are unavailable,
Original Value may be determined from other sources reasonably acceptable to the
Trustee.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased pursuant to Sections 2.02 or 2.03A or replaced pursuant to Section
2.04.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid by the Mortgagor,
or, in the case of an REO Property, the principal balance of the related
Mortgage Loan remaining to be paid by the Mortgagor at the time such property
was acquired by the Trust Fund less any Net Insurance Proceeds with respect
thereto to the extent applied to principal.
PAC CERTIFICATES: The Class A-1, Class A-2, Class A-3 and Class A-4
Class A-5, Class A-6, Class A-7, Class A-9, Class A-10, Class A-13, Class A-14,
Class A-15, Class A-16 and Class A-17 Certificates.
PASS-THROUGH RATE: As to each Class of Certificates, the rate of
interest set forth, or determined as provided with respect thereto, in Section
5.01(d). Any monthly calculation of interest at a stated rate shall be based
upon annual interest at such rate divided by twelve.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of
which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (including the Trustee acting in its commercial banking
capacity) and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or
the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the
time of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each
Rating Agency and (b) any other demand or time deposit or certificate
of deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above where the Trustee holds the security
therefor;
(iv) securities bearing interest or sold at a discount issued by
any corporation (including the Trustee) incorporated under the laws of
the United States of America or any state thereof that have the
Applicable Credit Rating or better from each Rating Agency at the time
of such investment or contractual commitment providing for such
investment; PROVIDED, HOWEVER, that securities issued by any
particular corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding principal
amount of securities issued by such corporation and held as part of
the Trust to exceed 10% of the aggregate Outstanding Principal
Balances and amounts of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(v) commercial paper (including both noninterest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance
thereof) having the Applicable Credit Rating or better from each
Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which the Master Servicer or any affiliate of the
Master Servicer acts as a manager or an advisor;
PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PHB: Peoples Heritage Savings Bank, or its successors in interest.
PHB MORTGAGE LOANS: The Group 1 Mortgage Loans that were originated or
acquired by PHB, as indicated on the Mortgage Loan Schedule relating to the
Group 1 Mortgage Loans, and sold to BSMSI pursuant to the PHB Sub-Servicing
Agreement.
PHB SUB-SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement dated as of February 18, 1998 between BSMCC and PHB, as amended or
supplemented from time to time.
PHYSICAL CERTIFICATES: The Class R-1, Class R-2, Class R-3 and Class
R-4 Certificates.
PLANNED BALANCE: With respect to each Class of PAC Certificates and
each Distribution Date, the amount set forth for such Class in Exhibit I hereto
for the respective Distribution Date.
PO PERCENTAGE: (i) With respect to any Discount Mortgage Loan in
Mortgage Loan Group 1, the fraction, expressed as a percentage, equal to 6.75%
minus the Net Rate thereof divided by 6.75%, (ii) with respect to any
Non-Discount Mortgage Loan in Mortgage Loan Group 1, 0%, and (iii) with respect
to any Mortgage Loan in Mortgage Loan Group 2 or Mortgage Loan Group 3, 0%.
PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month of such Distribution
Date.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, or any replacement
policy therefor.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.
PRIVATE CERTIFICATES: Any Class B-4, Class B-5, Class B-6, Class
2-B-4, Class 2-B-5, Class 2-B-6, Class 3-B-4, Class 3-B-5 or Class 3-B-6
Certificate.
PROTECTED ACCOUNT: An account established and maintained in the name
of the Trustee for the benefit of Certificateholders by the Master Servicer or
any Sub-Servicer with respect to the Mortgage Loans and with respect to REO
Property in a Designated Depository Institution for receipt of principal and
interest and other amounts as described in Section 4.01.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
QUALIFIED INSURER: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
RATING AGENCIES: S&P and Fitch.
RATING AGENCY ELIGIBLE ACCOUNT: An account, including one maintained
with the Trustee, which either (i) is a trust account maintained with the
corporate trust department of a depository institution or trust company
(including, without limitation, the Trustee) organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia which is not affiliated with the Master Servicer, any Sub-Servicer or
any other master servicer other than the Trustee or (ii) is maintained with an
entity which is an institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized long-term debt obligations of which shall be
rated "A" or higher by S&P and "A" or higher by Fitch, or one of the two highest
short-term ratings by each Rating Agency, and which is either (a) a federal
savings association duly organized, validly existing and in good standing under
the federal banking laws, (b) an institution duly organized, validly existing
and in good standing under the applicable banking laws of any state, (c) a
national banking association under the federal banking laws, or (d) a principal
subsidiary of a bank holding company.
REALIZED LOSS: Any (i) Deficient Valuation or (ii) as to any
Liquidated Mortgage Loan, (x) the Outstanding Principal Balance of such
Liquidated Mortgage Loan plus accrued and unpaid interest thereon at the
Mortgage Interest Rate through the last day of the month of such liquidation
LESS (y) the related Net Liquidation Proceeds with respect to such Mortgage
Loan.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II, REMIC III and REMIC IV Regular
Certificates.
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group 1 Mortgage Loans, (ii) the Certificate
Account relating to the Group I Mortgage Loans, (iii) any REO Property relating
to the Group I Mortgage Loans and (iv) any proceeds of the foregoing.
REMIC II CERTIFICATES: The REMIC II Regular Certificates and the Class
R-2 Certificates.
REMIC II REGULAR CERTIFICATES: As defined in Section 5.01.
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group 2 Mortgage Loans, (ii) the Certificate
Account relating to the Group 2 Mortgage Loans, (iii) any REO Property relating
to the Group 2 Mortgage Loans and (iv) any proceeds of the foregoing.
REMIC III CERTIFICATES: The REMIC III Regular Certificates and the
Class R-3 Certificates.
REMIC III REGULAR CERTIFICATES: As defined in Section 5.01.
REMIC IV: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group Mortgage Loans, (ii) the Certificate
Account relating to the Group 3 Mortgage Loans, (iii) any REO Property relating
to the Group 3 Mortgage Loans and (iv) any proceeds of the foregoing.
REMIC IV CERTIFICATES: The REMIC IV Regular Certificates and the Class
R-4 Certificates.
REMIC IV REGULAR CERTIFICATES: As defined in Section 5.01.
REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any Series REMIC to fail to qualify as a REMIC while any regular interest
in any Series REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to any Series REMIC or (iii) constitute a taxable
contribution to any Series REMIC after the Startup Day.
REMIC PROVISIONS: The provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO PROPERTY: A Mortgaged Property acquired in the name of the
Trustee, for the benefit of Certificateholders, by foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Section
2.02 or 2.03A an amount equal to the sum of (i) 100% of the Outstanding
Principal Balance of such Mortgage Loan as of the date of repurchase (or if the
related Mortgaged Property was acquired with respect thereto, 100% of the
Outstanding Principal Balance at the date of the acquisition) plus (ii) accrued
but unpaid interest on the Outstanding Principal Balance at the related Mortgage
Interest Rate, through and including the last day of the month of repurchase
reduced by (ii) any portion of the Master Servicing Fee or advances payable to
the purchaser of the Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
RESIDUAL CERTIFICATES: The Class R-1, Class R-2, Class R-3 and Class
R-4 Certificates.
RESPONSIBLE OFFICER: Any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement.
RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month,
the scheduled payment or payments of principal and interest due during such
month on such Mortgage Loan which either is payable by a Mortgagor in such month
under the related Mortgage Note or, in the case of REO Property, would otherwise
have been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY DUTIES ON THE PART OF EITHER MASTER SERVICER OR THE TRUSTEE, WHICH
WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A PRIVATE CERTIFICATE.
SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
SELLER: Bear Xxxxxxx Mortgage Securities Inc., a Delaware corporation,
or its successors in interest.
SENIOR CERTIFICATES: The Group 1 Senior Certificates, Group 2 Senior
Certificates and/or Group 3 Senior Certificates, as the context requires.
SENIOR P&I CERTIFICATES: The Group 1 Senior P&I Certificates, Group 2
Senior P&I Certificates and/or Group 3 Senior P&I Certificates, as the context
requires.
SERIES REMIC: Any of REMIC I, REMIC II, REMIC III or REMIC IV.
SERVICING ACCOUNT: The separate trust account(s) created and
maintained by each Sub-Servicer pursuant to the related Sub-Servicing Agreement
with respect to the Mortgage Loans or with respect to REO Property in a
Designated Depository Institution for collection of taxes, assessments,
insurance premiums and comparable items as described in Section 3.07.
SERVICING ADVANCES: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Master Servicer or any
Sub-Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of the Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the REO Property, including reasonable
fees paid to any independent contractor in connection therewith, (iv) compliance
with the obligations under Section 3.07 or 3.10, and (v) in connection with the
liquidation of a Mortgage Loan, expenditures relating to the purchase or
maintenance of the first lien on the Mortgaged Property pursuant to Section
3.12, all of which reasonable and customary out-of-pocket costs and expenses are
reimbursable to the Master Servicer or such Sub-Servicer to the extent provided
in Sections 4.02(b) and 4.03(b).
SERVICING OFFICER: Any officer of any Sub-Servicer or the Master
Servicer or of an agent or independent contractor through which all or part of
the Sub-Servicer's servicing responsibilities or the Master Servicer's master
servicing responsibilities are carried out, involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and specimen
signature appear on a list of servicing officers furnished to the Trustee by any
Sub-Servicer or the Master Servicer as such list may from time to time be
amended in accordance with the foregoing.
S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies Inc., or its successors in interest.
SPECIAL HAZARD LOSS: (i) A Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, exclusive of (a) any loss covered
by a hazard policy or a flood insurance policy required to be maintained in
respect of such Mortgaged Property under Section 3.10 and (b) any loss caused by
or resulting from:
(1) normal wear and tear;
(2) conversion or other dishonest act on the part of the
Trustee, a Sub-Servicer, the Master Servicer or any
of their agents or employees; or
(3) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a
part thereof ensues;
or (ii) any Realized Loss suffered by the Trust Fund arising from or related to
the presence or suspected presence of hazardous wastes or hazardous substances
on a Mortgage Property as reported by a Sub-Servicer to the Master Servicer
unless such loss to a Mortgaged Property is covered by a hazard policy or a
flood insurance policy required to be maintained in respect of such Mortgage
Property under Section 3.10.
SPECIAL HAZARD LOSS AMOUNT: Upon the initial issuance of the
Certificates, the "Special Hazard Loss Amount" for the Group 1 Mortgage Loans
will equal 1.0% of the aggregate Scheduled Principal Balances of the Group 1,
Mortgage Loans, as of the Cut-off Date (or approximately $7,939,100) and the
"Special Hazard Loss Amount" for the Group 2 and Group 3 Mortgage Loans will
equal the aggregate Scheduled Principal Balances as of the Cut-off Date of the
highest percentage of Mortgage Loans of the applicable Mortgage Loan Group by
principal balance secured by Mortgaged Properties in any California zip code (or
approximately $7,317,441 and $2,986,081, respectively). As of any Distribution
Date, the Special Hazard Loss Amount for each Mortgage Loan Group will equal the
initial Special Hazard Loss Amount, minus the sum of (i) the aggregate amount of
Special Hazard Losses that would have been previously allocated to the
Subordinate Certificates of the related Group in the absence of the Loss
Allocation Limitation and (ii) the Adjustment Amount. For each anniversary of
the Cut-off Date, the "Adjustment Amount" for each Mortgage Loan Group shall be
equal to the amount, if any, by which the applicable Special Hazard Loss Amount
(without giving effect to the deduction of the Adjustment Amount for such
anniversary) exceeds the lesser of (A) an amount calculated by the Depositor and
approved by each of S&P and Fitch, which amount shall not be less than $500,000,
and (B) the greater of (x) 1.0% (or if greater than 1.0%, the highest percentage
of Mortgage Loans of the applicable Mortgage Loan Group by principal balance
secured by Mortgaged Properties in any California zip code) of the outstanding
principal balance of all the Mortgage Loans of the applicable Mortgage Loan
Group on the Distribution Date immediately preceding such anniversary and (y)
twice the outstanding principal balance of the Mortgage Loan of the applicable
Mortgage Loan Group which has the largest outstanding principal balance on the
Distribution Date immediately preceding such anniversary.
SPECIAL HAZARD TERMINATION DATE: For any Mortgage Loan Group, the
Distribution Date upon which the applicable Special Hazard Loss Amount has been
reduced to zero or a negative number (or the applicable Group 1, Group 2 or
Group 3 Cross-Over Date, if earlier).
STARTUP DAY: February 27, 1998.
SUBORDINATE CERTIFICATES: The Group 1 Subordinate Certificates, Group
2 Subordinate Certificates and/or Group 3 Subordinate Certificates, as the
context requires.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: Any of the Group 1 Subordinate
Optimal Principal Amount, the Group 2 Subordinate Optimal Principal Amount or
the Group 3 Subordinate Optimal Principal Amount.
SUB-SERVICER: (i) Any of BAFSB, PHB, FUMC, NBMC or FNMC, or (ii) any
Person with which the Master Servicer has entered into an agreement and which
meets the qualifications of a Sub-Servicer pursuant to Section 3.02. As of the
Closing Date, (i) BAFSB will be the Sub-Servicer of the BA Mortgage Loans, (ii)
PHB will be the Sub-Servicer of the PHB Mortgage Loans, (iii) FUMC will be the
Sub-Servicer of the FUNB Mortgage Loans, (iv) NBMC will be the Sub-Servicer of
the NB Mortgage Loans and (v) FNMC will be the Sub-Servicer of the FNMC Mortgage
Loans.
SUB-SERVICER REMITTANCE DATE: The 18th day of each month, or if such
day is not a Business Day, the preceding Business Day.
SUB-SERVICING AGREEMENT: Any of the BA Sub-Servicing Agreement, the
PHB Sub-Servicing Agreement, the FUMC Sub-Servicing Agreement, the NB
Sub-Servicing Agreement or the FNMC Sub-Servicing Agreement.
SUB-SERVICING FEE: As to any Mortgage Loan and Distribution Date, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Sub-Servicing Fee Rate.
SUB-SERVICING FEE RATE: With respect to any Mortgage Loan, the per
annum rate of 0.25%.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Custodian on
behalf of the Trustee pursuant to Section 2.04, in each case, (i) which has an
Outstanding Principal Balance not materially greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted; and (viii) which has a fixed
interest rate no less than that of such Mortgage Loan.
TAX ADMINISTRATION AND TAX MATTERS PERSON: The Master Servicer or any
successor thereto or assignee thereof shall serve as tax administrator hereunder
and as agent for the Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for each of the related Series
REMICs, as more particularly set forth in Section 9.13 hereof.
TRUST FUND or TRUST: The corpus of the trust created by this
Agreement, consisting of the Mortgage Loans and the other assets described in
Section 2.01(a).
TRUSTEE: The Chase Manhattan Bank, or its successor in interest, or
any successor trustee appointed as herein provided.
TRUSTEE'S FEES: The amount to be paid to the Trustee for performing
its services hereunder. The Trustee's Fee shall be agreed to between the Trustee
and the Master Servicer and shall be payable by the Master Servicer.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.10, without regard to whether or not such
policy is maintained.
VOLUNTARY PRINCIPAL PREPAYMENT: With respect to any Distribution Date,
any Principal Prepayment received from the related Mortgagor on a Mortgage Loan.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account, (iii) such assets relating to the Mortgage Loans as from
time to time may be held by the Master Servicer or a Sub-Servicer in Protected
Accounts (excluding any income to the Master Servicer or any Sub-Servicer from
Permitted Investments under Subsection 4.01(a)), (iv) such assets relating to
the Mortgage Loans as from time to time may be held by the Trustee in the
Custody Account (excluding any income to the Master Servicer from Permitted
Investments under Section 4.04(d)), (v) any Servicing Accounts (to the extent
the mortgagee has a claim thereto and excluding any income to the Master
Servicer or Sub-Servicer or interest payable to Mortgagors pursuant to
applicable law), (vi) any REO Property, (vii) the Required Insurance Policies
and any amounts paid or payable by the insurer under any Insurance Policy (to
the extent the mortgagee has a claim thereto), (viii) the Mortgage Loan Purchase
Agreement to the extent provided in Subsection 2.03A(a), and (ix) any proceeds
of the foregoing. The Mortgage Loans that constitute part of the Trust shall be
divided into three separate sub-trusts, one for each of the Mortgage Loan
Groups. Although it is the intent of the parties to this Agreement that the
conveyance of the Seller's right, title and interest in and to the Mortgage
Loans and other assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Seller shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Seller's right, title and interest in,
to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Custodian on behalf of the Trustee, with respect to (A)
each Mortgage Loan, other than Cooperative Loans (i) the original Mortgage Note,
endorsed without recourse to the order of the Trustee and showing an unbroken
chain of endorsements from the original payee thereof to the Person endorsing it
to the Trustee, (ii) the original Security Instrument, which shall have been
recorded, with evidence of such recording indicated thereon, (iii) a certified
copy of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is located) to the
Trustee of the Security Instrument, with evidence of recording with respect to
each Mortgage Loan in the name of the Trustee thereon (or if (x) below applies,
shall be in recordable form), (iv) all intervening assignments of the Security
Instrument, if applicable and only to the extent available to the Seller with
evidence of recording thereon, (v) the original or a copy of the policy or
certificate of primary mortgage guaranty insurance, to the extent available, if
any, (vi) the original policy of title insurance or mortgagee's certificate of
title insurance or commitment or binder for title insurance and (vii) originals
of all modification agreements, if applicable and available and (B) each
Cooperative Loan (i) the original Mortgage Note, endorsed by the Seller or the
originator, without recourse in proper form to the order of the Trustee, and
showing, to the extent available, an unbroken chain of title from the originator
to the Trustee or, in the case of a Mortgage Loan that is subject to the terms
of a consolidation and modification agreement, an assignment of such agreement
to the Trustee; (ii) the original duly executed assignment of security agreement
from the Seller or the originator to the Trustee; (iii) the original Mortgage;
(iv) the acknowledgment copy of the original executed Form UCC-1) or certified
copy thereof) with respect to the security agreement, and any required
continuation statements, with evidence of filing indicated thereon; (v) the
acknowledgment copy of the original executed Form UCC-3 with respect to the
security agreement, indicating the Trustee as the assignee of the secured party,
with evidence of filing indicated thereon; (vi) the stock certificate
representing the stock allocated to the cooperative unit, with a stock power in
favor of the Seller or the originator and a stock power executed by the Seller
or the originator, as applicable, in blank attached; (vii) the original
collateral assignment of the lease by Mortgagor to the Seller or the originator
and the assignment of the collateral assignment of the lease by the Seller or
the originator, as applicable, to the Trustee (which may be in blanket form),
accompanied by the original lease; (viii) a copy of the recognition agreement;
(ix) if applicable and to the extent available, the original intervening
assignments, including warehousing assignments, if any, showing, to the extent
available, an unbroken chain of the related Mortgage Loan from the Seller or the
originator to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; (x) the originals of each assumption, modification
or substitution agreement, if any, relating to the Mortgage Loan; and (xi) the
certificate of primary mortgage insurance, if applicable.
PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by BSMCC,
the Master Servicer or the applicable Sub-Servicer, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; (y) in lieu of the Security
Instrument, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from BSMCC, the Master Servicer or the applicable Sub-Servicer,
to such effect) the Seller may deliver photocopies of such documents containing
an original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to six BA Mortgage Loans, with an aggregate Scheduled Principal
Balance as of the Cut-off Date of approximately $2,385,201, each as identified
in the list delivered by the Seller to the Trustee on the Closing Date and set
forth in Exhibit J hereto, the Seller may deliver a lost note affidavit and, if
available, a copy of the original Mortgage Note; and PROVIDED, FURTHER, HOWEVER,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Seller, in lieu of delivering
the above documents, may deliver to the Custodian and to the Trustee a
certification of a Servicing Officer to such effect and shall deposit all
amounts paid in respect of such Mortgage Loans in the Certificate Account on the
Closing Date. The Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
to the Custodian on behalf of the Trustee promptly after they are received.
Pursuant to the Sub-Servicing Agreements, each Sub-Servicer shall cause, at its
expense, the Security Instrument and intervening assignments, if any, and the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date. With respect to the Cooperative Loans, the
Seller will, promptly after the Closing Date, cause the related financing
statements (if not yet filed) and an assignment thereof from the Seller to the
Trustee to be filed in the appropriate offices.
Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that the
Custodian holds on behalf of the Trustee the documents (or certified copies
thereof) delivered to it pursuant to Section 2.01 and declares that the
Custodian on behalf of the Trustee will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee or to the Custodian on behalf of the
Trustee in trust for the use and benefit of all present and future Holders of
the Certificates. No later than 45 days after the Closing Date (or, with respect
to any Substitute Mortgage Loan, within 5 Business Days after the receipt by the
Custodian on behalf of the Trustee thereof), the Trustee agrees, for the benefit
of the Certificateholders, to cause the Custodian to review each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Seller, the Trustee and the Master Servicer an Initial
Certification substantially in the form annexed hereto as Exhibit G. In
conducting such review, the Trustee will cause the Custodian to ascertain
whether all required documents have been executed and received and whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibit B-1 to this Agreement, as supplemented (PROVIDED, HOWEVER,
that with respect to those documents described in subclauses (b)(iv), (b)(v) and
(b)(vi) of Section 2.01, the Custodian's obligations shall extend only to
documents actually delivered pursuant to such subsections). In performing any
such review, the Custodian may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Custodian finds any document constituting part of the
Mortgage File not to have been executed or received, or to be unrelated to the
Mortgage Loans identified in Exhibit B-1 or to appear to be defective on its
face, the Custodian shall promptly notify the Trustee and BSMCC. BSMCC shall
correct or cure any such defect within 90 days from the date of notice from the
Custodian of the defect and if BSMCC fails to correct or cure the defect within
such period, and such defect materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan, BSMCC will, subject to
Section 2.04, within 120 days from the Trustee's notification purchase such
Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that if such defect
relates solely to the inability of BSMCC to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, BSMCC shall not be required to purchase such Mortgage
Loan if BSMCC delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that BSMCC cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that BSMCC shall instead
deliver a recording receipt of such recording office or, if such receipt is not
available, a certificate of a Servicing Officer confirming that such documents
have been accepted for recording, and delivery to the Custodian shall be
effected by BSMCC within thirty days of its receipt of the original recorded
document.
(b) No later than 180 days after the Closing Date, the Trustee will
cause the Custodian to review, for the benefit of the Certificateholders, the
Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Seller, the Trustee and the Master Servicer, a
Final Certification substantially in the form annexed hereto as Exhibit H. In
conducting such review, the Trustee will cause the Custodian to ascertain
whether an original of each document required to be recorded has been returned
from the recording office with evidence of recording thereon or a certified copy
has been obtained from the recording office. If the Custodian finds any document
constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B-1 or to
appear defective on its face, the Custodian shall promptly notify the Trustee
and BSMCC (PROVIDED, HOWEVER, that with respect to those documents described in
subsection (b)(iv), (b)(v) and (b)(vi) of Section 2.01, the Custodian's
obligations shall extend only to the documents actually delivered pursuant to
such subsections). BSMCC shall correct or cure any such defect or shall deliver
to the Trustee and the Custodian an Opinion of Counsel to the effect that such
defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 90 days from the date of notice
from the Trustee of the defect and if BSMCC is unable to cure such defect within
such period, and if such defect materially and adversely affects the interests
of the Certificateholders in the related Mortgage Loan, BSMCC shall, subject to
Section 2.04, within 120 days from the Trustee's notification purchase such
Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that if such defect
relates solely to the inability of BSMCC to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, BSMCC shall not be required to purchase such Mortgage
Loan, if BSMCC delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by BSMCC in
accordance with Subsections 2.02(a) or (b) above, BSMCC shall provide the
Repurchase Price to the Trustee for deposit in the appropriate subaccount of the
Certificate Account and shall provide to the Trustee written notification
detailing the components of the Repurchase Price. Upon deposit of the Repurchase
Price in the appropriate subaccount of the Certificate Account, the Trustee
shall cause the Custodian to release to BSMCC the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by BSMCC as are necessary to vest in BSMCC title to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the Repurchase Price in available funds is
received by the Trustee. The Trustee shall amend the Mortgage Loan Schedule,
which was previously delivered to it by Seller in a form agreed to between the
Seller and the Trustee, to reflect such repurchase and shall promptly notify the
Master Servicer and the Rating Agencies of such amendment. The obligation of
BSMCC to repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER. (a) The Master Servicer hereby represents and warrants to the Trustee
as of the Closing Date that:
(i) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America and throughout the term of this Agreement will remain a
national banking association duly organized, validly existing and in
good standing under the laws of the United States of America, and has
the corporate power and authority to perform its obligations under
this Agreement;
(ii) The execution and delivery of this Agreement have been duly
authorized by all requisite corporate action;
(iii) This Agreement, assuming due authorization, execution, and
delivery by the other parties hereto, will constitute its legal, valid
and binding obligation, enforceable in accordance with its terms,
except only as such enforcement may be limited by applicable Debtor
Relief Laws and that certain equitable remedies may not be available
regardless of whether enforcement is sought in equity or at law;
(iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not
(A) violate its charter or bylaws (B) to its knowledge, violate any
law or regulation, or any administrative or judicial decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material contract, agreement or
other instrument to which it is a party or which may be applicable to
it or any of its assets;
(v) To its best knowledge, after reasonable investigation, it is
not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or
governmental agency, which default would reasonably be expected to
have consequences that would materially and adversely affect its
financial condition or operations or its performance hereunder;
(vi) It does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement to be performed by it;
(vii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of its business; and
(viii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to
materially and adversely affect its entering into this Agreement or
performing its obligations under this Agreement or which would have a
material adverse effect on its financial condition.
Section 2.03A. ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee all of its right, title
and interest in the Mortgage Loan Purchase Agreement, including but not limited
to Seller's rights and obligations pursuant to the Sub-Servicing Agreements and
the FUNB Sale Agreement, provided that the Seller retains a joint and several
right in the event of breach of the representations, warranties and covenants of
a Sub-Servicer or FUNB under any of the Sub-Servicing Agreements or the FUNB
Sale Agreement to enforce the provisions thereof and to seek all or any
available remedies; and provided further that this shall not be deemed an
agreement or requirement on the part of the Seller to pursue any such remedies;
provided, further, that the obligations of BSMCC to substitute or repurchase a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole remedy for
any breach thereof. At the request of the Trustee, the Seller shall take such
actions as may be necessary to enforce the above right, title and interest on
behalf of the Trustee and the Certificateholders or shall execute such further
documents as the Trustee may reasonably require in order to enable the Trustee
to carry out such enforcement. The Trustee hereby delegates to the Master
Servicer the rights to enforce the Trustee's rights under the Sub-Servicing
Agreements and the FUNB Sale Agreement.
(b) If the Seller, the Master Servicer, the Custodian or the Trustee
discovers a breach of any of the representations and warranties set forth in
Exhibit C or Section 7 of the Mortgage Loan Purchase Agreement and such breach
existed on the date the representation and warranty was made, which breach
materially and adversely affects the value of the interests of
Certificateholders or the Trustee in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. BSMCC within 90 days of its discovery or receipt of notice that
such breach has occurred (whichever occurs earlier), shall cure the breach in
all material respects or, subject to Section 2.04, shall purchase the Mortgage
Loan or any property acquired with respect thereto from the Trustee; PROVIDED,
HOWEVER, that if there is a breach of any representation set forth in Exhibit C
and the Mortgage Loan or the related property acquired with respect thereto has
been sold, then BSMCC shall pay, in lieu of the Repurchase Price, any excess of
the Repurchase Price over the Net Liquidation Proceeds received upon such sale.
(If the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall
be paid to BSMCC to the extent not required by law to be paid to the borrower.)
Any such purchase by BSMCC shall be made by providing an amount equal to the
Repurchase Price to the Trustee for deposit in the appropriate subaccount of the
Certificate Account and the Trustee, upon deposit of the Repurchase Price in the
appropriate subaccount of the Certificate Account and of written notification
detailing the components of such Repurchase Price, shall cause the Custodian to
release to BSMCC the related Mortgage File and shall execute and deliver all
instruments of transfer or assignment furnished to it by BSMCC, without
recourse, as are necessary to vest in BSMCC title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Master
Servicer, the Custodian and the Rating Agencies of such amendment. Enforcement
of the obligation of BSMCC, to purchase (or substitute a Substitute Mortgage
Loan for) any Mortgage Loan or any property acquired with respect thereto (or
pay the Repurchase Price as set forth in the above proviso) as to which a breach
has occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
Section 2.04. SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to Sections 2.02 or 2.03A, BSMCC may, no later than the date by which
such purchase by BSMCC would otherwise be required, tender to the Custodian on
behalf of the Trustee a Substitute Mortgage Loan accompanied by an Officer's
Certificate of BSMCC that such Substitute Mortgage Loan conforms to the
requirements set forth in the definition of "Substitute Mortgage Loan";
PROVIDED, HOWEVER, that substitution pursuant to this Section 2.04 in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day. The Trustee shall cause the Custodian to examine
the Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and shall notify the related Master Servicer in writing, within
five Business Days after receipt, whether or not the documents relating to the
Substitute Mortgage Loan satisfy the requirements of the third sentence of
Subsection 2.02(a). Within two Business Days after such notification, BSMCC
shall provide to the Trustee for deposit in the appropriate subaccount of the
Certificate Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to Scheduled Principal due on
such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by BSMCC of the Repurchase Price for the purchase of a Mortgage
Loan by BSMCC. After such notification to BSMCC and, if any such excess exists,
upon receipt of such deposit, the Trustee shall accept such Substitute Mortgage
Loan, which shall thereafter be deemed to be a Group 1 Mortgage Loan, Group 2
Mortgage Loan or Group 3 Mortgage Loan, as applicable, hereunder. In the event
of such a substitution, accrued interest on the Substitute Mortgage Loan for the
month in which the substitution occurs and any Principal Prepayments made
thereon during such month shall be the property of the Trust Fund and accrued
interest for such month on the Mortgage Loan for which the substitution is made
and any Principal Prepayments made thereon during such month shall be the
property of BSMCC. The Scheduled Principal on a Substitute Mortgage Loan due on
the Due Date in the month of substitution shall be the property of BSMCC and the
Scheduled Principal on the Mortgage Loan for which the substitution is made due
on such Due Date shall be the property of the Trust Fund. Upon acceptance of the
Substitute Mortgage Loan, the Trustee shall cause the Custodian to release to
BSMCC the related Mortgage File related to any Mortgage Loan released pursuant
to this Section 2.04 and shall execute and deliver all instruments of transfer
or assignment, without recourse, in form as provided to it as are necessary to
vest in BSMCC title to and rights under any Mortgage Loan released pursuant to
this Section 2.04. BSMCC shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of Subsections 2.01(b) and
2.02(b), with the date of acceptance of the Substitute Mortgage Loan deemed to
be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in Exhibit C shall be
deemed to have been made by BSMCC with respect to each Substitute Mortgage Loan
as of the date of acceptance of such Mortgage Loan by the Custodian on behalf of
the Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Master Servicer, the Custodian and the Rating Agencies.
Section 2.05. [Reserved]
Section 2.06. ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Seller, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Seller has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.
Section 2.07. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER.
The Seller hereby represents and warrants to the Trustee and the Master Servicer
as follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is
necessary, except where the failure so to qualify would not reasonably
be expected to have a material adverse effect on the Seller's business
as presently conducted or on the Purchaser's ability to enter into
this Agreement and to consummate the transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this Agreement
have been duly authorized by all necessary corporate action on the
part of the Seller; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the
articles of incorporation or by-laws of the Seller, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Seller's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in
respect of, any state, federal or other governmental authority or
agency, except those consents, approvals, notices, registrations or
other actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of
the Seller enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against the Seller, before or
by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Seller will be determined adversely to the Seller and
will if determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or perform
its obligations under this Agreement; and the Seller is not in default
with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Seller had good and marketable title to
and was the sole owner thereof and had full right to transfer and sell
such Mortgage Loan to the Trustee free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest.
Section 2.08. THE CUSTODIAN. Notwithstanding anything to the contrary
in this Agreement, the parties hereto acknowledge that the functions of the
Trustee with respect to the acceptance, inspection, custody and release of the
Mortgage Files pursuant to Sections 2.01, 2.02, 2.03A and 2.04 shall be
performed by the Custodian. The Custodian shall receive no separate fee for
performing such services. The Trustee shall not be liable for any acts or
omissions of the Custodian. The parties hereto hereby appoint Norwest Bank
Minnesota, National Association, and Norwest Bank Minnesota, National
Association hereby accepts such appointment, to serve as Custodian hereunder.
ARTICLE III
Administration and Servicing of Mortgage Loans
This Article III and certain other Sections of this Agreement
describe, in summary form, certain provisions of the Sub-Servicing Agreements
entered into among BSMCC and the various Sub-Servicers who will service the
Mortgage Loans. To the extent that any Sub-Servicing Agreement conflicts with
the summaries set forth in this Agreement, the provisions of the applicable
Sub-Servicing Agreement will govern. Except as otherwise set forth herein, this
Article III and the other Sections of this Agreement describing the
Sub-Servicing Agreements are for informational purposes only and do not
establish responsibilities and shall not be construed to impose any obligations
or duties on any Person, including, in particular, the Master Servicer or any
Sub-Servicer.
Section 3.01. MASTER SERVICER TO MASTER SERVICE. (a) The Master
Servicer shall supervise the servicing and administration of the Mortgage Loans
and any related REO Property in accordance with the terms of the related
Sub-Servicing Agreements and its normal master servicing practices, which
generally conform to the standards of an institution prudently master servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with the supervision
of such servicing and administration. The Master Servicer may perform its master
servicing responsibilities hereunder through other agents or independent
contractors, but shall not thereby be released from any of its responsibilities
as hereinafter set forth. The authority of the Master Servicer, in its capacity
as master servicer, shall include, without limitation, the power to consult with
and advise any Sub-Servicer regarding administration of a related Mortgage Loan.
The authority of the Master Servicer shall include, in addition, the power on
behalf of the Certificateholders, the Trustee or any of them to (i) execute and
deliver customary consents or waivers and other instruments and documents, (ii)
consent to transfers of any related Mortgaged Property and assumptions of the
related Mortgage Notes and Security Instruments (in the manner provided in this
Agreement) and (iii) collect any Insurance Proceeds and Liquidation Proceeds.
Without limiting the generality of the foregoing, the Master Servicer may, and
is hereby authorized, and empowered by the Trustee to, execute and deliver, on
behalf of itself, the Certificateholders, the Trustee, or any of them, any
instruments of satisfaction, cancellation, partial or full release, discharge
and all other comparable instruments, with respect to the related Mortgage
Loans, the Insurance Policies and the accounts related thereto, and the
Mortgaged Properties. The Master Servicer may exercise this power in its own
name or in the name of the Trustee.
(b) Notwithstanding the provisions of Subsection 3.01(a), the Master
Servicer shall not take any action which, in the Master Servicer's reasonable
business judgment, would be inconsistent with generally accepted good master
servicing procedures and practices and with the interest of the Trustee or the
Certificateholders in the related Mortgage Loans or with the rights and
interests of the Trustee or the Certificateholders under this Agreement.
(c) The Trustee shall furnish each Sub-Servicer and the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable each Sub-Servicer and the Master Servicer
to master service and administer the related Mortgage Loans and REO Property.
Section 3.02. SUB-SERVICING AGREEMENT BETWEEN A MASTER SERVICER AND
SUB-SERVICERS. (a) [Reserved].
(b) As part of its master 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. 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, but
shall be reimbursed therefor (i) from a general recovery resulting from such
enforcement only to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(c) Notwithstanding anything contained herein to the contrary, the
parties hereto agree that (i) BAFSB shall be the Sub-Servicer of the BA Mortgage
Loans pursuant to the BA Sub-Servicing Agreement, (ii) PHB shall be the
Sub-Servicer of the PHB Mortgage Loans pursuant to the PHB Sub-Servicing
Agreement, (iii) FUMC shall be the Sub-Servicer of the FUNB Mortgage Loans
pursuant to the FUMC Sub-Servicing Agreement, (iv) NBMC shall be the
Sub-Servicer of the NB Mortgage Loans pursuant to the NB Sub-Servicing Agreement
and (v) FNMC shall be the Sub-Servicer of the FNMC Mortgage Loans pursuant to
the FNMC Sub-Servicing Agreement.
Section 3.03. SUCCESSOR SUB-SERVICERS. The Master Servicer shall be
entitled to terminate any Sub-Servicing Agreement that may exist in accordance
with the terms and conditions of such Sub-Servicing Agreement and without any
limitation by virtue of this Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either act as servicer of the related
Mortgage Loan or enter into an appropriate contract with a successor
Sub-Servicer pursuant to which such successor Sub-Servicer will be bound by all
relevant terms of the related Sub-Servicing Agreement pertaining to the
servicing of such Mortgage Loan.
Section 3.04. [Reserved]
Section 3.05. ASSUMPTION OF MASTER SERVICING BY TRUSTEE. (a)
[Reserved]
(b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 8.02, upon the reasonable request of the Trustee or such
designee as successor master servicer, the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee, all
documents and records, electronic or otherwise in the Master Servicer's
possession, relating to the related Mortgage Loans or REO Property and an
accounting of amounts collected and held by it, if any, and will otherwise
cooperate and use its reasonable best efforts to effect the orderly and
efficient transfer of the master servicing responsibilities hereunder to the
Trustee, or at its written request to such designee as successor master
servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The Master
Servicer will coordinate and monitor remittances by Sub-Servicers with respect
to the related Mortgage Loans in accordance with this Agreement and the related
Sub-Servicing Agreements.
(b) The Master Servicer shall make its reasonable best efforts to
cause each Sub-Servicer to collect all payments required under the terms and
provisions of the related Sub-Servicing Agreement and the Sub-Servicers will
follow collection procedures comparable to the collection procedures of prudent
mortgage lenders servicing mortgage loans for their own account to the extent
such procedures shall be consistent with this Agreement. Consistent with the
foregoing, a Sub-Servicer may in its discretion (i) waive or permit to be waived
any late payment charge, prepayment charge, assumption fee, or any penalty
interest in connection with the prepayment of a related Mortgage Loan and (ii)
suspend or temporarily reduce or permit to be suspended or temporarily reduced
regular monthly payments for a period of up to six months, or arrange or permit
an arrangement with a Mortgagor for a scheduled liquidation of delinquencies. In
the event a Sub-Servicer shall consent to the deferment of the due dates for
payments due on a related Mortgage Note, the related Sub-Servicer shall make an
advance to the same extent as if such installment were due, owing and delinquent
and had not been deferred through liquidation of the Mortgaged Property;
PROVIDED, HOWEVER, that the obligation of the Sub-Servicer to make a Monthly
Advance shall apply only to the extent that the Sub-Servicer believes, in good
faith, that such advances are not Nonrecoverable Advances.
(c) A Sub-Servicer may not make any advances of amounts due in the
future with respect to a Mortgage Loan and a Sub-Servicer shall not permit (i)
any modification with respect to any Mortgage Loan that would change the
Mortgage Interest Rate, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan or (ii) any modification, waiver or
amendment of any term of any related Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
(B) cause any Series REMIC to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.
(d) Within five Business Days after a Sub-Servicer has determined that
all amounts which it expects to recover from or on account of a Mortgage Loan
have been recovered and that no further Liquidation Proceeds will be received in
connection therewith, such Sub-Servicer shall provide to the Master Servicer and
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan as of the date of such determination.
Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS. (a) The Sub-Servicers will establish and maintain, in
addition to the Protected Accounts, one or more Servicing Accounts. The
Sub-Servicers will deposit and retain therein all otherwise unapplied
collections from the Mortgagors, including amounts collected for the payment of
taxes, assessments, insurance premiums, or comparable items as agent of the
Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Sub-Servicer as Trustee of Taxes and
Insurance Custodial Account for borrowers and for the Sub-Servicer (and its
successors and assigns) acting on its own behalf and for the Sub-Servicer, as
agent for holders of various pass-through securities and other interests in
mortgage loans sold by it; and agent for various mortgagors, as their interests
may appear or under such other designation as may be permitted by a
Sub-Servicing Agreement. The amount at any time credited to a Servicing Account
must be fully insured by the FDIC, or, to the extent that such deposits exceed
the limits of such insurance, such excess must be (i) transferred to another
fully insured account in another Designated Depository Institution or (ii) if
permitted by applicable law, invested in Permitted Investments held in trust by
the Sub-Servicer as described above and maturing, or be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn, and in no event later than 45 days after the date of investment. The
Sub-Servicers may establish Servicing Accounts not conforming to the foregoing
requirements to the extent that such Servicing Accounts are Rating Agency
Eligible Accounts. Withdrawals of amounts from the Servicing Accounts may be
made only to effect timely payment of taxes, assessments, insurance premiums, or
comparable items, to transfer previously unapplied collections to a Protected
Account, to reimburse the Master Servicer or a Sub-Servicer for any advances
made with respect to such items, to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required, to Mortgagors on
balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement in accordance
with Section 10.01.
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS. Each Sub-Servicer shall provide to the Trustee,
the Master Servicer and the Seller access to the records and documentation
regarding the related Mortgage Loans and REO Property and the servicing thereof
and to the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC (to which the Trustee shall also provide) access to the
documentation regarding the related Mortgage Loans required by applicable
regulations, such access being afforded without charge but only upon reasonable
prior written request and during normal business hours at the offices of the
Sub-Servicers, the Custodian or the Trustee that are designated by these
entities; PROVIDED, HOWEVER, that, unless otherwise required by law, the
Trustee, the Custodian or the Sub-Servicer shall not be required to provide
access to such records and documentation if the provision thereof would violate
the legal right to privacy of any Mortgagor PROVIDED, FURTHER, HOWEVER, that the
Trustee and the Seller shall coordinate their requests for such access so as not
to impose an unreasonable burden on, or cause an interruption of, the business
of any Sub-Servicer. The Sub-Servicers, the Custodian and the Trustee shall
allow representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers their own actual out-of-pocket costs.
Section 3.09. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES;
COLLECTION THEREUNDER. Each Sub-Servicer shall exercise its best reasonable
efforts to maintain and keep in full force and effect each Primary Mortgage
Insurance Policy by a Qualified Insurer, or other insurer satisfactory to the
Rating Agencies, with respect to each related conventional Mortgage Loan as to
which as of the Cut-off Date such a Primary Mortgage Insurance Policy was in
effect (or, in the case of a Substitute Mortgage Loan, the date of substitution)
and the original principal amount of the related Mortgage Note exceeded 80% of
the Original Value in an amount at least equal to the excess of such original
principal amount over 75% of such Original Value until the principal amount of
any such Mortgage Loan is reduced below 80% of the Original Value or, based upon
a new appraisal, the principal amount of such Mortgage Loan represents less than
80% of the new appraised value. The related Sub-Servicer shall effect the timely
payment of the premium on each Primary Mortgage Insurance Policy. The related
Sub-Servicer shall have the power to substitute for any Primary Mortgage
Insurance Policy another substantially equivalent policy issued by another
Qualified Insurer; PROVIDED THAT such substitution is subject to the condition,
to be evidenced by a writing from each Rating Agency, that it would not cause
the ratings on the Certificates to be downgraded or withdrawn.
Section 3.10. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE.
(a) Each Sub-Servicer shall maintain and keep, with respect to each related
Mortgage Loan and each REO Property, in full force and effect hazard insurance
(fire insurance with extended coverage) equal to at least the lesser of the
Outstanding Principal Balance of the Mortgage Loan or the current replacement
cost of the Mortgaged Property, and containing a standard mortgagee clause;
PROVIDED, HOWEVER, that the amount of hazard insurance may not be less than the
amount necessary to prevent loss due to the application of any co-insurance
provision of the related policy. Unless applicable state law requires a higher
deductible, the deductible on such hazard insurance policy may be $1000 or 1% of
the applicable amount of coverage, whichever is less. In the case of a
condominium unit or a unit in a planned unit development, the required hazard
insurance shall take the form of a multiperil policy covering the entire
condominium project or planned unit development, in an amount equal to at least
100% of the insurable value based on replacement cost.
(b) Any amounts collected by a Sub-Servicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or repair
of the Mortgaged Property or amounts released to the Mortgagor in accordance
with the Sub-Servicer's normal servicing procedures, the terms of the Mortgage
Note, the Security Instrument or applicable law) shall be deposited initially in
a Protected Account, for transmittal to the appropriate subaccount of the
Certificate Account or Custody Account, subject to withdrawal pursuant to
Section 4.03.
(c) Any cost incurred by a Sub-Servicer in maintaining any such hazard
insurance policy shall not be added to the amount owing under the related
Mortgage Loan for the purpose of calculating monthly distributions to
Certificateholders, notwithstanding that the terms of such Mortgage Loan so
permit. Such costs shall be recoverable by the Sub-Servicer out of related late
payments by the Mortgagor or out of Insurance Proceeds or Liquidation Proceeds
or by the Sub-Servicer from the Repurchase Price, to the extent permitted by
Section 4.03.
(d) No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. Each year,
in accordance with standards and procedures required by FHLMC, the Master
Servicer shall perform, or cause a Sub-Servicer to perform, a review of the
related Mortgage Loans to determine which, if any, of the Mortgaged Properties
are located in a federally designated special flood hazard area and for each
Mortgaged Property found to be located in a federally designated special flood
hazard area, a Sub-Servicer shall use its best reasonable efforts to cause with
respect to the related Mortgage Loans and each REO Property, flood insurance (to
the extent available and in accordance with mortgage servicing industry
practice) to be maintained. Such flood insurance shall cover the related
Mortgaged Property, including all items taken into account in arriving at the
Appraised Value on which the Mortgage Loan was based, and shall be in an amount
equal to the lesser of (i) the Outstanding Principal Balance of the related
Mortgage Loan and (ii) the minimum amount required under the terms of coverage
to compensate for any damage or loss on a replacement cost basis, but not more
than the maximum amount of such insurance available for the related Mortgaged
Property under either the regular or emergency programs of the National Flood
Insurance Program (assuming that the area in which such Mortgaged Property is
located is participating in such program). Unless applicable state law requires
a higher deductible, the deductible on such flood insurance may not exceed
$1,000 or 1% of the applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with Subsections
3.10(a) and (d) and there shall have been a loss which would have been covered
by such insurance had it been maintained, the related Sub-Servicer shall pay for
any necessary repairs.
(f) The related Sub-Servicer shall present, if it is a permitted
claimant, claims under the related hazard insurance or flood insurance policy.
(g) Each Sub-Servicer shall obtain and maintain an errors and
omissions insurance policy covering such Sub-Servicer's officers, employees and
other persons acting on its behalf in connection with its activities under this
Agreement and the related Sub-Servicing Agreement. The amount of coverage shall
be at least equal to the coverage acceptable to FNMA or FHLMC to service loans
for it or otherwise in an amount as is commercially available at a cost that is
generally not regarded as excessive by industry standards. The Master Servicer
shall maintain at its own expense and for the duration of this Agreement a
fidelity bond in such amount as is customary for master servicers or trustees of
mortgage loans. The Master Servicer shall promptly notify the Trustee of any
material change in the terms of its bond or policy. If any such bond of the
Master Servicer ceases to be in effect, the Master Servicer shall, to the extent
possible, give the Trustee ten days' notice prior to any such cessation and
shall use its best efforts to obtain a comparable replacement bond or policy, as
the case may be. Any amounts relating to the Mortgage Loans collected under such
bond or policy shall be remitted to the appropriate subaccount of the
Certificate Account to the extent that such amounts have not previously been
paid to such account.
Section 3.11. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) In any
case in which a Sub-Servicer is notified that a Mortgaged Property relating to a
Mortgage Loan has been or is about to be conveyed by the Mortgagor, such
Sub-Servicer shall enforce any due-on-sale clause contained in the related
Security Instrument to the extent permitted under the terms of the related
Mortgage Note and by applicable law unless such Sub-Servicer reasonably believes
such enforcement is likely to result in legal action by the Mortgagor. If such
Sub-Servicer reasonably believes that such due-on-sale clause cannot be enforced
under applicable law or if the related Mortgage Loan does not contain a
due-on-sale clause, such Sub-Servicer may consent to a conveyance subject to the
lien of the Mortgage, and to take or enter into an assumption agreement from or
with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the related Mortgage Note and
unless prohibited by applicable state law, such Mortgagor remains liable
thereon, on condition, however, that the related Mortgage Loan shall continue to
be covered (if so covered before the related Sub-Servicer enters into such
agreement) by any Primary Mortgage Insurance Policy. The Sub-Servicer shall
notify the Trustee, whenever possible, before the completion of such assumption
agreement, and shall forward to the Custodian on behalf of the Trustee the
original copy of such assumption agreement, which copy shall be added by the
Custodian to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. In connection with any
such assumption agreement, the interest rate on the related Mortgage Loan shall
not be changed and no other material alterations in the Mortgage Loan shall be
made. Any fee or additional interest collected by the Sub-Servicer for
consenting to any such conveyance or entering into any such assumption agreement
may be retained by the related Sub-Servicer as additional servicing
compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Sub-Servicer shall not be deemed to be in default, breach or
any other violation of its obligations under its Sub-Servicing Agreement by
reason of any assumption of a related Mortgage Loan by operation of law or any
conveyance by the Mortgagor of the related Mortgaged Property or assumption of a
Mortgage Loan which the Sub-Servicer reasonably believes, based on prudent
servicing standards, it may be restricted by law from preventing, for any reason
whatsoever or if the exercise of such right would impair or threaten to impair
any recovery under any applicable Insurance Policy, or, in the Sub-Servicer's
judgment, be reasonably, likely to result in legal action by the Mortgagor or
would otherwise adversely affect the Certificateholders.
Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) Each
Sub-Servicer shall foreclose upon or otherwise comparably convert the ownership
of properties securing any related Mortgage Loans that come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.06 except that a Sub-Servicer shall
not foreclose upon or otherwise comparably convert a Mortgaged Property if there
is evidence of environmental hazards or toxic waste thereon and such Sub-
Servicer determines it would be imprudent to do so or not in accordance with
appropriate servicing standards. A Sub-Servicer can conclusively rely on results
of third party inspections from parties it reasonably believes are qualified to
conduct such inspections. In connection with such foreclosure or other
conversion, the related Sub-Servicer shall use its best reasonable efforts to
preserve REO Property and to realize upon related defaulted Mortgage Loans in
such manner as to maximize the receipt of principal and interest by the
Certificateholders, taking into account, among other things, the timing of
foreclosure and the considerations set forth in Subsection 3.12(b). The
foregoing is subject to the proviso that a Sub-Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it determines in good faith (i) that such
restoration or foreclosure will increase the proceeds of liquidation of the
related Mortgage Loan to Certificateholders after reimbursement to itself for
such expenses and (ii) that such expenses will be recoverable to it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of reimbursements from the Certificate Account pursuant to Section
4.03) or through Insurance Proceeds (respecting which it shall have similar
priority). A Sub-Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; PROVIDED, HOWEVER, that it shall be
entitled to reimbursement thereof (as well as its normal servicing
compensation), and to receive Excess Liquidation Proceeds as additional
servicing compensation to the extent that transfers or withdrawals from the
Certificate Account with respect thereto are permitted under Section 4.03. Any
income from or other funds (net of any income taxes) generated by REO Property
shall be deemed for purposes of this Agreement to be Insurance Proceeds.
(b) The Trust Fund shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or imminent default of a Mortgage Loan. In the event that the Trust Fund
acquires any real property (or personal property incident to such real property)
in connection with a default or imminent default of a Mortgage Loan, such
property shall be disposed of by the Trust Fund before the close of the third
taxable year following the taxable year in which the Trust Fund acquired such
property (the "grace period") unless the Trustee shall have received a REMIC
Opinion with respect to such longer retention or the Master Servicer applies for
and receives an extension of the grace period under Section 856(e)(3) of the
Code, in which case such grace period described above will be extended by the
period set forth in such REMIC Opinion or approved application, as the case may
be. The Trustee and the Master Servicer shall have no obligation to pay for such
REMIC Opinion.
Section 3.13. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES. (a)
Upon payment in full of any Mortgage Loan or the receipt by the related
Sub-Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the related Sub-Servicer will immediately notify
the Custodian by a certification signed by a Servicing Officer in the Form of
Exhibit D (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Certificate Account have been or will be so
deposited in the appropriate subaccount thereof) and shall request delivery to
the Master Servicer or a Sub-Servicer, as the case may be, of the Mortgage File.
Upon receipt of such certification and request, the Custodian shall release
within five Business Days the related Mortgage File to the Master Servicer or a
Sub-Servicer and execute and deliver to the Master Servicer or related
Sub-Servicer, without recourse, the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Security Instrument (furnished by the related Sub-Servicer),
together with the Mortgage Note with written evidence of cancellation thereon.
No expenses incurred in connection with any instrument of satisfaction or deed
of reconveyance shall be chargeable to the Certificate Account. If upon receipt
of a properly executed request for release the Custodian fails to release the
Mortgage File to the Sub-Servicer within the time frame required under this
Agreement, the Custodian shall indemnify such Sub-Servicer for any penalties,
charges, costs or damages payable as a result of such failure.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under a Required Insurance
Policy, the Master Servicer or a Sub-Servicer shall deliver to the Trustee and
the Custodian a Request for Release signed by a Servicing Officer on behalf of
the Master Servicer or related Sub-Servicer in substantially the form attached
as Exhibit D hereto. Upon receipt of the Request for Release, the Custodian
shall deliver the Mortgage File to the Master Servicer or Sub-Servicer, as the
case may be.
(c) Each Sub-Servicer shall cause each Mortgage File released pursuant
to Subsection 3.13(b) to be returned to the Custodian when the need therefor no
longer exists, and in any event within 21 days of the such Sub-Servicer's
receipt thereof, unless the related Mortgage Loan has become a Liquidated
Mortgage Loan and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the appropriate subaccount of the Certificate Account or such
Mortgage File is being used to pursue foreclosure or other legal proceedings.
Prior to return of a Mortgage File to the Custodian, the related Insurer or
Sub-Servicer to whom such file was delivered shall retain such file in its
respective control unless the Mortgage File has been delivered to an attorney,
or to a public trustee or other public official as required by law, to initiate
or pursue legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or non-judicially, and the Sub-Servicer has delivered
to the Trustee and the Custodian a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File was
delivered and the purpose or purposes of such delivery. If a related Mortgage
Loan becomes a Liquidated Mortgage Loan, the Sub-Servicer shall deliver the
Request for Release with respect thereto to the Trustee and the Custodian upon
deposit of the related Liquidation Proceeds in the appropriate subaccount of the
Certificate Account.
(d) The Trustee shall execute and deliver to the Master Servicer and
the related Sub-Servicer any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity. Together with such documents or pleadings
the Master Servicer or the related Sub-Servicer shall deliver to the Trustee a
certificate of a Servicing Officer in which it requests the Trustee to execute
the pleadings or documents. The certificate shall certify and explain the
reasons for which the pleadings or documents are required. It shall further
certify that the Trustee's execution and delivery of the pleadings or documents
will not invalidate any insurance coverage under the Required Insurance Policies
or invalidate or otherwise affect the lien of the Security Instrument, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.14. MASTER SERVICING AND SUB-SERVICING COMPENSATION. (a) As
compensation for its activities hereunder, the Master Servicer shall be entitled
to receive the Master Servicing Fee from investment earnings on amounts in the
Master Servicer Collection Account pursuant to Section 4.01(d). Each
Sub-Servicer shall be entitled to receive the Sub-Servicing Fee from full
payments of accrued interest on each Mortgage Loan for which it is acting as
Sub-Servicer, subject to each Sub-Servicer's obligation to pay Compensating
Interest Payments pursuant to Section 6.09. In addition, FNMC shall be entitled
to receive the Excess Servicing Fee from full payments of accrued interest on
each FNMC Mortgage Loan. The Excess Servicing Fee shall not be reduced for
Compensating Interest Payments, FNMC shall remain entitled to receive the Excess
Servicing Fee notwithstanding the removal of FNMC as a Sub-Servicer and neither
the Master Servicer nor any Sub-Servicer shall be entitled to receive the Excess
Servicing Fee.
(b) The Master Servicer or a Sub-Servicer may retain additional
servicing compensation in the form of prepayment charges, if any, assumption
fees, tax service fees, fees for statement of account or payoff, late payment
charges, interest on amounts deposited in any Accounts or Permitted Investments
of such amounts, or otherwise. The related Sub-Servicer is also entitled to
receive Excess Liquidation Proceeds as additional servicing compensation. The
Master Servicer shall be required to pay all expenses it incurs in connection
with its activities under this Agreement, and shall not be entitled to
reimbursement except as provided in this Agreement. Expenses to be paid by the
Master Servicer under this Subsection 3.14(b) shall include payment of the
expenses of the accountants retained pursuant to Section 3.16.
Section 3.15. ANNUAL STATEMENT OF COMPLIANCE. Within 120 days after
December 31st of each year, commencing December 1998, the Master Servicer at its
own expense (other than with respect to clause (iii) below), shall deliver to
the Trustee, with a copy to the Rating Agencies, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Master Servicer during the preceding fiscal year or applicable portion thereof
and of performance under this Agreement has been made under such officer's
supervision, (ii) to the best of such officer's knowledge, based on such review,
the Master Servicer has fulfilled all its obligations under this Agreement for
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof including the steps being taken by the Master Servicer to
remedy such default; (iii) a review of the reports required to be furnished by
each Sub-Servicer pursuant to the applicable Sub-Servicing Agreement during the
Sub-Servicer's most recently ended fiscal year on or prior to such December 31st
has been made under such Officer's supervision; and (iv) to the best of the
Servicing Officer's knowledge, based on his review of such reports (unless the
Servicing Officer has reason to believe that reliance on such reports is not
justified), either nothing has come to the attention of such Officer that would
cause such Officer to believe that a Sub-Servicer has failed to perform and
fulfill its duties, responsibilities and obligations under its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.
Section 3.16. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after December 31st of each year, commencing December 1998,
the Master Servicer, at its expense, shall furnish to the Trustee and the Seller
a copy of the Master Servicer's audited financial statements for the year most
recently ended.
(b) Promptly after its receipt from a Sub-Servicer, the Master
Servicer, at its expense, shall furnish to the Trustee a copy of the most
recently available letter or letters from one or more firms of Independent
certified public accountants who are members of the American Institute of
Certified Public Accountants reporting the results of such firm's examination of
the servicing procedures of any such Sub-Servicer in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers, or
such other program as may be set forth in any such letter.
Section 3.17. REMIC-RELATED COVENANTS. For as long as the Series
REMICs shall exist, the Master Servicer and the Trustee shall act in accordance
herewith to assure continuing treatment of each such Series REMIC as a REMIC,
and the Trustee shall comply with any directions of the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a) sell
or permit the sale of all or any portion of the Mortgage Loans or of any
Permitted Investment unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to Section 2.04, accept any contribution to
any Series REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.18. ADDITIONAL INFORMATION. The Master Servicer agrees to
furnish the Seller, at no expense to the Master Servicer, from time to time upon
reasonable request, such further information, reports and financial statements
as the Seller deems appropriate to prepare and file all necessary reports with
the Securities and Exchange Commission.
Section 3.19. OPTIONAL PURCHASE OF DEFAULTED FNMC MORTGAGE LOANS. FNMC
shall have the right, but not the obligation, to purchase any Defaulted FNMC
Mortgage Loan for a price equal to the Repurchase Price therefor. FNMC shall
also have the right, but not the obligation, to purchase any FNMC Mortgage Loan
that becomes an REO Property at a price equal to the average of the appraised
value for such REO Property obtained from two independent appraisers. Any such
purchases shall be accomplished as provided in Subsection 2.02(c) hereof.
ARTICLE IV
Accounts
Section 4.01. PROTECTED ACCOUNTS AND MASTER SERVICER COLLECTION
ACCOUNT. (a) Each Sub-Servicer shall establish and maintain a Protected Account
complying with the requirements set forth in this Section 4.01, with records to
be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which accounts shall be deposited within 2 Business Days of receipt all
collections of principal and interest on any Mortgage Loan and with respect to
any REO Property received by the Master Servicer, or a Sub-Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Sub-Servicer's own funds (less servicing compensation as permitted
by Subsection 3.14(a)) and all other amounts to be deposited in the Protected
Accounts. The Master Servicer is hereby authorized to make withdrawals from and
deposits to the related Protected Accounts for purposes required or permitted by
this Agreement. All Protected Accounts shall be held in a Designated Depository
Institution and segregated on the books of such institution. The amount at any
time credited to a Protected Account shall be fully insured by the FDIC or, to
the extent that such balance exceeds the lesser of $100,000 or the limits of
such insurance, such excess must be transferred to the appropriate subaccount of
the Certificate Account or the related Custody Account or invested in Permitted
Investments or may be deposited in a Rating Agency Eligible Account in the name
of the Trustee for the benefit of Certificateholders and, except as provided in
the next sentence, not commingled with any other funds. The Master Servicer may
permit a Sub-Servicer to transfer funds to other accounts (which shall for
purposes hereof be deemed to be Protected Accounts), commingle accounts or to
establish Protected Accounts not conforming to the foregoing requirements, to
the extent that such other accounts or Protected Accounts meet the requirements
of each of the Rating Agencies for the maintenance of the ratings on the
Certificate.
Amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Custody Account or Master Servicer
Collection Account, and shall be held until required for such deposit. The
income earned from Permitted Investments made pursuant to this Section 4.01
shall be paid to the related Sub-Servicer as additional compensation for its
obligations under this Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Sub-Servicer. The related Sub-Servicer
shall deposit the amount of any such loss in the related Protected Account
within two Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Sub-Servicer Remittance Date.
(b) On or before each Sub-Servicer Remittance Date, each Sub-Servicer
shall withdraw from the Protected Accounts or the Custody Account and shall
immediately remit to the Master Servicer Collection Account amounts representing
the following collections and payments (other than with respect to principal of
or interest on the Mortgage Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the related Mortgage Loans received
or any related portion thereof advanced by the related Sub-Servicer
which were due on or before the related Due Date, net of the amount
thereof comprising the applicable Sub-Servicing Fee due the related
Sub-Servicer and the Excess Servicing Fee due FNMC;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the related Sub-Servicer with respect to such Mortgage
Loans in the related Prepayment Period, with interest to the date of
prepayment or liquidation, net of the amount thereof comprising the
applicable Sub-Servicing Fee due the related Sub-Servicer and the
Excess Servicing Fee due FNMC, to the extent such amounts exceed the
related Compensating Interest Payments;
(iii) Partial prepayments of principal received by
the related Sub-Servicer for such Mortgage Loans in the
related Prepayment Period; and
(iv) Any amount to be used as a Certificate Account
Advance.
(c) Withdrawals may be made from a Protected Account only to make
remittances as provided in Subsections 4.01(b) or 4.03(c), or Section 4.04; to
reimburse the Master Servicer or a Sub-Servicer for advances of principal and
interest which have been recovered by subsequent collection from the related
Mortgagor; to remove amounts deposited in error; to remove fees, charges or
other such amounts deposited on a temporary basis; or to clear and terminate the
account at the termination of this Agreement in accordance with Section 10.01.
As provided in Section 4.02(b) certain amounts otherwise due to the Master
Servicer or a Sub-Servicer may be retained by it and need not be deposited in
the Master Servicer Collection Account.
(d) The Master Servicer shall establish and maintain a Master Servicer
Collection Account in the name of the Trustee for the benefit of the
Certificateholders (other than any investment earnings, which shall be for the
account of the Master Servicer). The Master Servicer shall deposit to the Master
Servicer Collection Account, within one Business Day of receipt, all amounts
received from the Sub-Servicers. The Master Servicer is hereby authorized to
make withdrawals from and deposits to the Master Servicer Collection Account for
purposes required or permitted by this Agreement. The Master Servicer Collection
Account shall be held in a Designated Depository Institution, and amounts on
deposit therein shall be invested in Permitted Investments selected by the
Master Servicer.
All investment earnings on amounts on deposit in the Master Servicer
Collection Account shall be paid to the Master Servicer as additional
compensation for its obligations under this Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The Master
Servicer shall, deposit the amount of any such loss in the Master Servicer
Collection Account within two Business Days of receipt of notification of such
loss but not later than the Business Day prior to the Distribution Date on which
the moneys so invested are required to be distributed to the Certificateholders.
As its compensation (the "Master Servicer Compensation"), the Master
Servicer shall be entitled to receive all investment earnings on amounts in the
Master Servicer Collection Account and the Certificate Account. On the Business
Day prior to each Distribution Date, the Master Servicer shall withdraw from the
Master Servicer Collection Account and remit to the Trustee all amounts in the
Master Servicing Collection Account, net of the portion of the Master Servicer
Compensation allocable to the Master Servicer Collection Account.
Section 4.02. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated non-interest bearing trust account or
accounts. The Certificate Account shall have three separate subaccounts, one
each for all funds with respect to each Mortgage Loan Group. The Trustee will
deposit in the appropriate subaccount of the Certificate Account, as identified
by the Master Servicer, as received the following amounts:
(i) Any amounts withdrawn from the Master Servicer Collection
Account pursuant to Section 4.01(d);
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received by
or on behalf of the Master Servicer which were not deposited in a
Protected Account or the Custody Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by BSMCC pursuant to Sections 2.02 or 2.03, any amounts
which are to be treated pursuant to Section 2.04 as the payment of
such a Repurchase Price, amounts received from FNMC pursuant to
Section 3.19 pursuant to the repurchase of a Defaulted FNMC Mortgage
Loan or an REO Property relating to an FNMC Mortgage Loan and all
proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by the Seller or its designee pursuant to Section
10.01;
(v) Any amounts required to be deposited with respect to losses
on Permitted Investments pursuant to Section 4.04(d) below; and
(vi) Any other amounts received by or on behalf of the Master
Servicer, a Sub-Servicer or the Trustee and required to be deposited
in such subaccount of the Certificate Account pursuant to this
Agreement.
(b) All amounts deposited to the Certificate Account shall be
deposited by 12:00 P.M. New York time in immediately available funds on the
Master Servicer Remittance Date and shall be held by the Trustee in the name of
the Trustee in trust for the benefit of the Certificateholders in accordance
with the terms and provisions of this Agreement, subject to the right of the
Master Servicer to require the Trustee to make withdrawals therefrom as provided
herein. The foregoing requirements for crediting the Certificate Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of (i) prepayment or late
payment charges or assumption, tax service, statement account or payoff,
substitution, satisfaction, release and other like fees and charges and (ii) the
items enumerated in Subsections 4.03(a)(ii), (iii), (iv), (v), (vii), (viii),
(x) and (xii) need not be credited by the related Sub-Servicer to the Master
Servicer Collection Account and may be retained by the related Sub-Servicer as
servicing compensation. In the event that the Master Servicer shall deposit or
cause to be deposited to the Certificate Account any amount not required to be
credited thereto, or shall deposit or cause to be deposited to a subaccount of
the Certificate Account any amount which should appropriately be credited to
another subaccount of the Certificate Account, the Trustee, upon receipt of a
written request therefor signed by a Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the Master Servicer or to the appropriate
other subaccount of the Certificate Account, as applicable, any provision herein
to the contrary notwithstanding.
(c) The Certificate Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office , and the Certificate Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The amount at any time
credited to the Certificate Account shall be (i) fully insured by the FDIC to
the maximum coverage provided thereby or, (ii) provided such amounts are
received pursuant to Section 4.02(b), invested, at the written direction of the
Master Servicer, in Permitted Investments. In the absence of written direction
by the Master Servicer, all funds in the Certificate Account shall remain
uninvested. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Trustee
or, if such obligor is any other Person, the Business Day preceding such
Distribution Date. With respect to the Certificate Account and the funds
deposited therein, the Trustee shall take such action as may be necessary to
ensure that the Certificateholders shall be entitled to the priorities afforded
to such a trust account (in addition to a claim against the estate of the
Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
appropriate subaccount of the Certificate Account as the Master Servicer or
related Sub-Servicer has designated for such transfer or withdrawal as specified
in a certificate signed by a Servicing Officer (upon which the Trustee may
conclusively rely) for the following purposes (limited in the case of amounts
due the related Sub-Servicer to those not withdrawn from the Protected Account
in accordance with the terms of this Agreement):
(i) [intentionally omitted];
(ii) to reimburse the Master Servicer or any Sub-Servicer for any
Monthly Advance of its own funds or any advance of such Sub-Servicer's
own funds, the right of the Master Servicer or a Sub-Servicer to
reimbursement pursuant to this subclause (ii) being limited to amounts
received on a particular related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance or advance was made;
(iii) to reimburse the Master Servicer or any Sub-Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
related Mortgage Loan for amounts expended by the Master Servicer or
such Sub-Servicer pursuant to Section 3.12 in good faith in connection
with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of
such Mortgage Loan;
(iv) to reimburse the Master Servicer or any Sub-Servicer from
Insurance Proceeds relating to a particular related Mortgage Loan for
Insured Expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer or such Sub-Servicer from Liquidation
Proceeds from a particular related Mortgage Loan for Liquidation
Expenses incurred with respect to such Mortgage Loan; PROVIDED THAT
the related Sub-Servicer shall not be entitled to reimbursement for
Liquidation Expenses with respect to a Mortgage Loan to the extent
that (i) any amounts with respect to such Mortgage Loan were paid as
Excess Liquidation Proceeds pursuant to clause (xii) of this
Subsection 4.03(a) to the related Sub-Servicer; and (ii) such
Liquidation Expenses were not included in the computation of such
Excess Liquidation Proceeds;
(v) to pay any Sub-Servicer, from Liquidation Proceeds or
Insurance Proceeds received in connection with the liquidation of any
Mortgage Loan, the amount which such Sub-Servicer would have been
entitled to receive under its Sub-Servicing Agreement or subclause (x)
of this Subsection 4.03(a) as servicing compensation on account of
each defaulted scheduled payment on such Mortgage Loan if paid in a
timely manner by the related Mortgagor, but only to the extent that
the aggregate of Liquidation Proceeds and Insurance Proceeds with
respect to such Mortgage Loan, after any reimbursement to any
Sub-Servicer, pursuant to subclauses (ii), (iii), (iv) and (vii) of
this Subsection 4.03(a), exceeds the Outstanding Principal Balance of
such Mortgage Loan plus accrued and unpaid interest thereon at the
related Mortgage Interest Rate less the applicable Sub-Servicing Fee
Rate to but not including the date of payment;
(vi) to pay any Sub-Servicer from the Repurchase Price for any
related Mortgage Loan, the amount which such Sub-Servicer would have
been entitled to receive under its Sub-Servicing Agreement or
subclause (x) of this Subsection 4.03(a) as servicing compensation,
but only to the extent that the Repurchase Price with respect to such
Mortgage Loan after any reimbursement to the related Sub-Servicer
pursuant to subclauses (ii) and (vii) of this Subsection 4.03(a)
exceeds the Outstanding Principal Balance of such Mortgage Loan plus
accrued and unpaid interest thereon at the related Mortgage Interest
Rate less the applicable Sub-Servicing Fee Rate through the last day
of the month of repurchase;
(vii) to reimburse the Master Servicer or any Sub-Servicer for
advances of funds hereunder or under the related Sub-Servicing
Agreement, the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds
and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(viii) to pay a Master Servicer or any Sub-Servicer, as the case
may be, with respect to each related Mortgage Loan that has been
purchased pursuant to Section 2.02, 2.03A, 2.04 or 10.01, all amounts
received thereon, representing recoveries of principal that reduce the
Outstanding Principal Balance of such Mortgage Loan below the
Outstanding Principal Balance used in calculating the Repurchase Price
or representing interest included in the calculation of the Repurchase
Price or accrued after the end of the month during which such
repurchase occurs;
(ix) to reimburse the Master Servicer or any Sub-Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Monthly Advance or
advance has not been reimbursed pursuant to clauses (ii) and (vii),
such reimbursement to come from the subaccount relating to the
Mortgage Loan Group of which the related Mortgage Loan is a part;
(x) to pay any Sub-Servicer servicing compensation as set forth
in Section 3.14;
(xi) to reimburse the Master Servicer, any Sub-Servicer or the
Trustee for expenses, costs and liabilities incurred by and
reimbursable to it pursuant to Sections 7.03, 7.04(d) or 11.03, which,
if not specifically allocable to a Mortgage Loan Group, shall be
allocated between the subaccounts, PRO RATA, based on the Scheduled
Principal Balances of the Group 1 Mortgage Loans, the Group 2 Mortgage
Loans and the Group 3 Mortgage Loans, respectively;
(xii) to pay to the related Sub-Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds;
(xiii) to reimburse a Sub-Servicer for any amounts to which it is
entitled to reimbursement under the terms of its Sub-Servicing
Agreement;
(xiv) to clear and terminate the Certificate Account pursuant to
Section 10.01; and
(xv) to remove amounts deposited in error.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to subclauses (i) through
(vii), inclusive, and (ix) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Certificate Account under Section
4.02(b).
(b) On each Distribution Date, the Trustee shall make the following
payments in the priority set forth from the funds in the Certificate Account:
(i) First, the amount of investment earnings, net of losses, to
the Master Servicer; and
(ii) Second, the amount distributable to the Holders of the
Certificates shall be payable in accordance with Section 6.01.
(c) Notwithstanding the provisions of this Section 4.03, the Master
Servicer may, but is not required to, allow the Sub-Servicers to deduct from
amounts received by them or from the related Protected Account, prior to deposit
in the Master Servicer Collection Account or the Custody Account, any portion to
which such Sub-Servicers are entitled as servicing compensation (including
income on Permitted Investments) or reimbursement of any reimbursable advances
made by such Sub-Servicers.
Section 4.04 CUSTODY ACCOUNT. (a) The Master Servicer shall establish
and maintain for the benefit of the Certificateholders the Custody Account as a
segregated non-interest bearing trust account in the corporate trust department
of either a Designated Depository Institution or the Master Servicer. The
Custody Account shall be segregated on the books of the Designated Depository
Institution or the Master Servicer, as applicable, and held by the Designated
Depository Institution or the Master Servicer, as applicable in trust, and such
Account and the funds deposited therein shall not be subject to, and shall be
protected from, all claims, liens, and encumbrances of any creditors or
depositors of the Designated Depository Institution, the Trustee, the Master
Servicer, any Sub-Servicer or the Seller (whether made directly, or indirectly
through a liquidator or receiver of the Designated Depository Institution, the
Trustee, the Master Servicer, any Sub-Servicer or the Seller). If the Custody
Account is maintained with the Trustee, the Trustee shall take such action as
may be necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable, or
any applicable comparable state statute applicable to state chartered banking
corporations.
(b) Within one Business Day after receipt, each Sub-Servicer shall
withdraw or shall cause to be withdrawn from each Protected Account and shall
immediately deposit or cause to be deposited in the applicable Custody Account
all amounts in the Protected Account not otherwise invested in Permitted
Investments pursuant to Section 4.01 and exceeding the lesser of $100,000 or the
FDIC insurance limit (other than with respect to principal of or interest on the
Mortgage Loans due on or before the Cut-off Date).
(c) Withdrawals may be made from the Custody Account only to make
remittances as provided in Sections 4.01(b) or 4.04(d); to reimburse the Master
Servicer or any Sub-Servicer for advances of principal and interest which have
been recovered by subsequent collection from the related Mortgagor; to remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01.
(d) Funds in a Custody Account may be invested at the written
direction of the applicable Sub-Servicer in Permitted Investments held in trust
in the name of the Trustee for the benefit of the Certificateholders and in the
absence of such directions, funds in a Custody Account shall be invested in
Permitted Investments described in clause (iii) or clause (viii) of the
definition thereof. Such Permitted Investments must mature, or be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Master Servicer Collection Account
pursuant to Section 4.01(b) and shall be held in such Account until required for
such deposit. The income earned from Permitted Investments made pursuant to this
Section 4.04 shall be paid to the applicable Sub-Servicer as additional
compensation for its obligations under the applicable Sub-Servicing Agreement,
and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the related Sub-Servicer. The amount of any such loss shall be deposited
by the related Sub-Servicer in the applicable Custody Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders.
ARTICLE V
Certificates
Section 5.01. CERTIFICATES. (a) The Depository, the Seller and the
Trustee have entered into Depository Agreements dated as of February 27, 1998
(the "Depository Agreement"). Except for the Residual Certificates and the
Individual Certificates and as provided in Subsection 5.01(b), the Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to a successor to the Depository; (ii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Trustee shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants.
The Residual Certificates are initially Physical Certificates. If at
any time the Holders of all of the Certificates of one or more such Classes
request that the Trustee cause such Class to become Global Certificates, the
Trustee and the Seller will take such action as may be reasonably required to
cause the Depository to accept such Class or Classes for trading.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Seller, the
Master Servicer nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
(c) (i) REMIC II will be evidenced by (x) the REMIC II Regular
Certificates, described below, which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC II and (y) the Class R-2 Certificate, which is hereby
designated as the single "residual interest" in REMIC II. Except as
discussed below, principal and interest shall be payable to, and
shortfalls, losses and prepayments are allocable to, the REMIC II
Regular Certificates in the same order and priority as payments are to
be made on, and shortfalls, losses and prepayments are allocable to,
the Corresponding Classes of Certificates. Except as noted below, the
Corresponding Classes of Certificates are those Group 1 Certificates
which have the same designation as the REMIC II Certificates (without
the "II-"). The REMIC II Regular Certificates and the Class R-2
Certificate will have the following designations and pass-through
rates, and distributions of principal and interest thereon shall be
allocated to the Corresponding Class of Certificates in the following
manner:
REMIC II CERTIFICATES Initial Balance ($) Pass-Through Rate
--------------------- ------------------- -----------------
II-A-1 $ 49,765,000 6.75 (1)
II-A-2 $ 29,066,000 6.75 (1)
II-A-3 $ 10,959,000 6.75 (1)
II-A-4 $ 54,926,000 6.75 (1)
II-A-5 $ 49,041,000 6.75 (1)
II-A-6 $ 43,048,000 6.75 (1)
II-A-7 $ 5,717,000 6.75 (1)
II-A-9 $ 240,377,000 6.75
II-A-10 $ 41,553,000 6.75
II-A-11/12 $ 121,743,000 6.75 (2)
II-A-13/17 $ 10,126,000 6.75 (3)
II-A-14/15/16/17 $ 22,202,000 6.75 (4)
II-A-18 $ 79,391,221 6.75
II-P $ 269,679 6.75
II-X (5) (5)
II-B-1 $ 18,656,900 6.75
II-B-2 $ 6,748,300 6.75
II-B-3 $ 3,572,600 6.75
II-B-4 $ 2,778,600 6.75
II-B-5 $ 1,984,800 6.75
II-B-6 $ 1,984,848 6.75
II-R-1 $ 50 6.75
R-2 $ 50 6.75
-----------------
(1) The interest on this Class in excess of the interest on the
Corresponding Class is allocated to the Class A-8 Certificates.
(2) The interest on this Class is allocated to the Class A-12 and
Class A-13 Certificates.
(3) 12.50% of the interest and principal on this Class is allocated
to the Class A-17 Certificates. The remainder of the interest and
principal as allocated to the Class A-13 Certificates.
(4) 12.50% of the interest and principal on this Class is allocated
to the Class A-17 Certificates. The remainder of the interest and
principal is allocated to the Class A-14, Class A-15 and Class
A-16 Certificates (principal in proportion to principal balances
and interest in proportion to interest due on such Certificates).
(5) The Class X Certificates will have a Notional Amount equal to the
aggregate Scheduled Principal Balances of the Group 1 Mortgage
Loans and will bear interest on their Notional Amount at a
variable Pass-Through Rate equal to the weighted average of the
excess, if any, of (a) the net Rates on each Group 1 Mortgage
Loan over (b) 6.75% per annum.
(ii) REMIC III will be evidenced by (x) the REMIC III Regular
Certificates, described below, which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC III and (y) the Class R-3 Certificate, which is hereby
designated as the single "residual interest" in REMIC III. Except as
discussed below, principal and interest shall be payable to, and
shortfalls, losses and prepayments are allocable to, the REMIC III
Regular Certificates in the same order and priority as payments are to
be made on, and shortfalls, losses and prepayments are allocable to,
the Corresponding Classes of Certificates. Except as noted below, the
Corresponding Classes of Certificates are those Group 2 Certificates
which have the same designation as the REMIC III Certificates (without
the "III-"). The REMIC III Regular Certificates and the Class R-3
Certificate will have the following designations and pass-through
rates, and distributions of principal and interest thereon shall be
allocated to the Corresponding Class of Certificates in the following
manner:
REMIC III CERTIFICATES Initial Balance ($) Pass-Through Rate
---------------------- ------------------- -----------------
III-2-A-1 $ 26,972,970 (1) (2)
III-2-A-2 $ 31,103,944 (1) (2)
III-2-A-3 $ 88,152,745 (1) (2)
III-2-A-4 $ 41,525,070 (1)
III-2-A-5 $ 23,718,000 (1)
III-2-A-6 $ 41,000,000 (1)
III-2-A-7 $ 19,488,000 (1)
III-2-A-8 $ 31,623,346 (1)
III-2-B-1 $ 5,850,300 (1)
III-2-B-2 $ 2,688,000 (1)
III-2-B-3 $ 1,423,000 (1)
III-2-B-4 $ 1,106,800 (1)
III-2-B-5 $ 790,600 (1)
III-2-B-6 $ 790,639 (1)
R-3 $ 50 (1)
------------------
(1) These Group 2 Certificates (as defined herein) will bear
interest at a variable rate equal to the weighted rate equal
to the weighted average of the Net Rates of the Group 2
Mortgage Loans.
(2) All the interest on this Class in excess of the pass-through
rate of the Corresponding Class is allocated to the Class
2-A-4 Certificates.
(iii) REMIC IV will be evidenced by (x) the REMIC IV Regular
Certificates, described below, which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC IV and (y) the Class R-4 Certificate, which is hereby
designated as the single "residual interest" in REMIC IV. Except as
discussed below, principal and interest shall be payable to, and
shortfalls, losses and prepayments are allocable to, the REMIC IV
Regular Certificates in the same order and priority as payments are to
be made on, and shortfalls, losses and prepayments are allocable to,
the Corresponding Classes of Certificates. Except as noted below, the
Corresponding Classes of Certificates are those Group 3 Certificates
which have the same designation as the REMIC IV Certificates (without
the "IV-"). The REMIC IV Regular Certificates and the Class R-4
Certificate will have the following designations and pass-through
rates, and distributions of principal and interest thereon shall be
allocated to the Corresponding Class of Certificates in the following
manner:
REMIC IV CERTIFICATES Initial Balance ($) Pass-Through Rate
---------------------- ------------------- -----------------
IV-3-A $ 43,636,450 (1)
IV-3-B-1 $ 446,400 (1)
IV-3-B-2 $ 156,250 (1)
IV-3-B-3 $ 89,250 (1)
IV-3-B-4 $ 156,250 (1)
IV-3-B-5 $ 66,950 (1)
IV-3-B-6 $ 89,323 (1)
R-4 $ 50 (1)
------------------
(1) All Group 3 Certificates (as defined herein) will bear interest at a
variable rate equal to the weighted average of the Net Rates of the
Group 3 Mortgage Loans.
(d) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
DESIGNATION INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE
A-1 $ 49,765,000 6.15%
A-2 $ 29,066,000 6.15%
A-3 $ 10,959,000 6.20%
A-4 $ 54,926,000 6.25%
A-5 $ 49,041,000 6.35%
A-6 $ 43,048,000 6.50%
A-7 $ 5,717,000 6.65%
A-8 (1) 6.75%
A-9 $ 240,377,000 6.75%
A-10 $ 41,553,000 6.75%
A-11 $ 96,678,264 (2)
A-12 $ 25,064,736 (3)
A-13 $ 8,860,250 7.00%
A-14 $ 17,426,750 7.00%
A-15 $ 1,000,000 6.75%
A-16 $ 1,000,000 7.25%
A-17 $ 4,041,000 5.00%
A-18 $ 79,391,221 6.75%
P $ 269,679 (4)
X (5) (5)
B-1 $ 18,656,900 6.75%
B-2 $ 6,748,300 6.75%
B-3 $ 3,572,600 6.75%
B-4 $ 2,778,600 6.75%
B-5 $ 1,984,800 6.75%
B-6 $ 1,984,848 6.75%
2-A-1 $ 26,972,970 6.40%
2-A-2 $ 31,103,944 6.35%
2-A-3 $ 88,152,745 6.50%
2-A-4 $ 41,525,070 (6)
2-A-5 $ 23,718,000 (7)
2-A-6 $ 41,000,000 (7)
2-A-7 $ 19,488,000 (7)
2-A-8 $ 31,623,346 (7)
2-B-1 $ 5,850,300 (7)
2-B-2 $ 2,688,000 (7)
2-B-3 $ 1,423,000 (7)
2-B-4 $ 1,106,800 (7)
2-B-5 $ 790,600 (7)
2-B-6 $ 790,639 (7)
3-A $ 43,636,450 (8)
3-B-1 $ 446,400 (8)
3-B-2 $ 156,250 (8)
3-B-3 $ 89,250 (8)
3-B-4 $ 156,250 (8)
3-B-5 $ 66,950 (8)
3-B-6 $ 89,323 (8)
R-1 $ 50 6.75%
R-2 $ 50 6.75%
R-3 $ 50 (7)
R-4 $ 50 (8)
------------------
(1) The Notional Amount of the Class A-8 Certificates on any Distribution
Date will be equal to the sum of (i) the product of (A) 8.0000000000% and
(B) the Current Principal Amount of the Class A-1 Certificates, (ii) the
product of (A) 8.0000000000% and (B) the Current Principal Amount of the
Class A-2 Certificates, (iii) the product of (A) 8.1481481481% and (B) the
Current Principal Amount of the Class A-3 Certificates, (iv) the product of
(A) 7.4074074074% and (B) the Current Principal Amount of the Class A-4
Certificates, (v) the product of (A) 5.9259259259% and (B) the Current
Principal Amount of the Class A-5 Certificates, (vi) the product of (A)
3.7037037037% and (B) the Current Principal Amount of the Class A-6
Certificates and (vii) the product of (A) 1.4814814815% and (B) the Current
Principal Amount of the Class A-7 Certificates.
(2) During the initial Interest Accrual Period, interest will accrue on the
Class A-11 Certificates at the rate of 6.49375% per annum. During each
Interest Accrual Period thereafter, interest will accrue on the Class A-11
Certificates at a per annum rate of 0.90% above LIBOR, determined monthly
as described herein, subject to a maximum rate of 8.50% and a minimum rate
of 0.90%.
(3) During the initial Interest Accrual Period, interest will accrue on the
Class A-12 Certificates at the rate of 7.738393% per annum. During each
Interest Accrual Period thereafter, interest will accrue on the Class A-12
Certificates at a per annum rate equal to 29.31428% -(3.85714235 x LIBOR)
determined monthly as described herein, subject to a maximum rate of
29.31428% and a minimum rate of 0.00%
(4) The Class P Certificates are principal only Certificates and will not
bear interest.
(5) The Class X Certificates will xxxx a Notional Amount equal to the
aggregate Scheduled Principal Balances of the Group 1 Mortgage Loans and
will bear interest on their Notional Amount at a variable Pass-Through Rate
equal to the weighted average of the excess, if any, of (a) the net Rates
on each Group 1 Mortgage Loan over (b) 6.75% per annum.
(6) During the initial Interest Accrual Period, interest will accrue on
the Class 2-A-4 Certificates at the rate of 9.00% per annum. During each
Interest Accrual Period thereafter, interest will accrue on the class 2-A-4
Certificates at a per annum rate equal to a fraction, expressed as a
percentage, the numerator of which is an amount equal to the sum of (i) the
product of (A) the weighted average of the net Rates of the Group 2
Mortgage Loans and (B) the Current Principal Amount of the Class 2-A-4
Certificates and (ii) the product of (A) the excess, if any, of (x) the
weighted average of the Net Rates of the Group 2 Mortgage Loans over (y)
the weighted average Pass-Through Rate of the Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates and (B) the aggregate Current Principal Amounts of
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates, and the
denominator of which is the Current Principal Amount of the Class 2-A-4
Certificates.
(7) These Group 2 Certificates (as defined herein) will bear interest at a
variable rate equal to the weighted rate equal to the weighted average of
the Net Rates of the Group 2 Mortgage Loans.
(8) All Group 3 Certificates (as defined herein) will bear interest at a
variable rate equal to the weighted average of the Net Rates of the Group 3
Mortgage Loans.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount or Notional Amount of such
Class applicable to such Distribution Date.
(f) (i) Commencing on February 26, 1998, with respect to the Class
A-11 and Class A-12 Certificates, and monthly thereafter on the second
business day prior to the first day of the related Interest Accrual
Period for the Class A-11 and Class A-12 Certificates (each, a "LIBOR
Determination Date), until the Current Principal Amounts of such
Classes of Certificates have been reduced to zero, the Master Servicer
will request each of the designated reference banks meeting the
criteria set forth herein (the "Reference Banks") to inform the Master
Servicer of the quotation offered by its principal London office for
making one-month United States dollar deposits in leading banks in the
London interbank market, as of 11:00 a.m. (London time) on such LIBOR
Determination Date. (For purposes of calculating LIBOR, "business day"
means a day on which banks are open for dealing in foreign currency
and exchange in London and New York City.) In lieu of making a request
of the Reference Banks, the Master Servicer may rely on the quotations
for those Reference Banks that appear at such time on the Reuters
Screen LIBO Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions
for Swaps, 1986 Edition), to the extent available.
(ii) LIBOR will be established by the Master Servicer on each
LIBOR Determination Date as follows:
(a) If on any LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/32%).
(b) If on any LIBOR Determination Date only one or none of
the Reference Banks provides such offered quotations, LIBOR for the
next Interest Accrual Period shall be whichever is the higher of (i)
LIBOR as determined on the previous LIBOR Determination Date or (ii)
the Reserve Interest Rate. The "Reserve Interest Rate" shall be the
rate per annum which the Master Servicer determines to be either (i)
the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/32%) of the one-month United States dollar lending rates
that New York City banks selected by the Seller are quoting, on the
relevant LIBOR Determination Date, to the principal London offices of
at least two of the Reference Banks to which such quotations are, in
the opinion of the Master Servicer, being so made, or (ii) in the
event that the Master Servicer can determine no such arithmetic mean,
the lowest one-month United States dollar lending rate which New York
City banks selected by BSMSI are quoting on such LIBOR Determination
Date to leading European banks.
(c) If on the first LIBOR Determination Date, the Master
Servicer is required but is unable to determine the Reserve Interest
Rate in the manner provided in paragraph (b) above, LIBOR shall be
5.59375%. If on any subsequent LIBOR Determination Date, the Trustee
is required but is unable to determine the Reserve Interest Rate in
the manner provided in paragraph (b) above, LIBOR shall be LIBOR for
the immediately preceding LIBOR Determination Date.
(iii) Each Reference Bank shall (i) be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency
market, (ii) not control, be controlled by, or be under common control
with the Seller, and (iii) have an established place of business in
London. If any such Reference Bank should be unwilling or unable to
act as such or if the Seller should terminate the appointment of any
such Reference Bank, the Seller will promptly appoint another leading
bank meeting the criteria specified above.
(iv) The establishment of LIBOR on each LIBOR Determination Date
by the Master Servicer and the Master Servicer's calculation of the
rate of interest applicable to the Class A-11 and Class A-12
Certificates for the related Interest Accrual Period shall (in the
absence of manifest error) be final and binding. Each such rate of
interest may be obtained by telephoning the Master Servicer at (410)
884-2000.
(g) The Certificates shall be substantially in the forms set forth in
Exhibit A-1 and A-2. On original issuance, the Trustee shall sign, countersign
and shall deliver them at the direction of the Seller. Pending the preparation
of definitive Certificates of any Class, the Trustee may sign and countersign
temporary Certificates that are printed, lithographed or typewritten, in
authorized denominations for Certificates of such Class, substantially of the
tenor of the definitive Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers or authorized signatories executing such Certificates may
determine, as evidenced by their execution of such Certificates. If temporary
Certificates are issued, the Seller will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of definitive
Certificates, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the office of the
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Trustee shall sign and countersign and
deliver in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(h) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount or Notional
Amount of such Class on the Closing Date. On the Closing Date, the Trustee shall
execute and countersign Physical Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of such Class on the
Closing Date. The Class B-4, Class B-5, Class B-6, Class 2-B-4, Class 2-B-5,
Class 2-B-6, Class 3-B-4, Class 3-B-5 and Class 3-B-6 Certificates will be
issued in certificated fully-registered form in minimum denominations of $50,000
and increments of $1.00 in excess thereof, except that one Certificate of each
such Class may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. The Class R-1, Class
R-2, Class R-3 and Class R-4 Certificates shall be issued in certificated
fully-registered form in the denomination of $50 each. Each Class of Global
Certificates, if any, shall be issued in fully registered form in minimum dollar
denominations of $50,000 and integral multiples of $1.00 in excess thereof,
except that one Certificate of each Class may be in a different denomination so
that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Current Principal Amount of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case of
each Class of Offered Certificates, the Certificate in the entire Current
Principal Amount of the respective Class and (ii) in the case of each Class of
Private Certificates, Individual Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of each such respective
Class on the Closing Date. The Certificates referred to in clause (i) and if at
any time there are to be Global Certificates, the Global Certificates shall be
delivered by the Seller to the Depository or pursuant to the Depository's
instructions, shall be delivered by the Seller on behalf of the Depository to
and deposited with the DTC Custodian. The Trustee shall sign the Certificates by
facsimile or manual signature and countersign them by manual signature on behalf
of the Trustee by one or more authorized signatories, each of whom shall be
Responsible Officers of the Trustee or its agent. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent at the time of issuance shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such positions prior to the delivery of such Certificate.
(i) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(j) The Closing Date is hereby designated as the "startup" day of each
Series REMIC within the meaning of Section 860G(a)(9) of the Code.
(k) For federal income tax purposes, each Series REMIC shall have a
tax year that is a calendar year and shall report income on an accrual basis.
(l) The Trustee on behalf of the Trust shall cause each Series REMIC
to elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(m) The Assumed Final Distribution Dates for distributions on the
Group 1 Certificates, the Group 2 Certificates and the Group 3 Certificates, are
March 25, 2028, March 28, 2028 and February 25, 2013, respectively.
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee
who has provided the Trustee with a Rule 144A Certificate or
comparable evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall
be fully protected in so doing), provided that, if based upon an
Opinion of Counsel to the effect that the delivery of (x) and (y)
above are not sufficient to confirm that the proposed transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
other applicable laws, the Trustee shall as a condition of the
registration of any such transfer require the transferor to furnish
such other certifications, legal opinions or other information prior
to registering the transfer of an Individual Certificate as shall be
set forth in such Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being
transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the
Trustee with a Rule 144A Certificate or comparable evidence as to its
QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate or
Certificates of such Class, an exchange of an Individual Certificate or
Certificates of a Class for a beneficial interest in the Global Certificate of
such Class and an exchange of an Individual Certificate or Certificates of a
Class for another Individual Certificate or Certificates of such Class (in each
case, whether or not such exchange is made in anticipation of subsequent
transfer, and, in the case of the Global Certificate of such Class, so long as
such Certificate is outstanding and is held by or on behalf of the Depository)
may be made only in accordance with this Subsection 5.02(e) and in accordance
with the rules of the Depository:
(i) A holder of a beneficial interest in a Global Certificate of
a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a
Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable
evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee shall (or
shall request the Depository to) endorse on the schedule affixed to
such Global Certificate (or on a continuation of such schedule affixed
to such Global Certificate and made a part thereof) or otherwise make
in its books and records an appropriate notation evidencing the date
of such exchange or transfer and a decrease in the certificate balance
of such Global Certificate equal to the certificate balance of such
Individual Certificate issued in exchange therefor or upon transfer
thereof.
(g) The Securities Legend shall be placed on any Individual
Certificate issued in exchange for or upon transfer of another Individual
Certificate or of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination or any integral multiple of $1.00 in
excess thereof) by surrendering such Certificate at the Corporate Trust Office,
or at the office of any transfer agent, together with an executed instrument of
assignment and transfer satisfactory in form and substance to the Trustee in the
case of transfer and a written request for exchange in the case of exchange. The
holder of a beneficial interest in a Global Certificate may, subject to the
rules and procedures of the Depository, cause the Depository (or its nominee) to
notify the Trustee in writing of a request for transfer or exchange of such
beneficial interest for an Individual Certificate or Certificates. Following a
proper request for transfer or exchange, the Trustee shall, within five Business
Days of such request made at such Corporate Trust Office, sign, countersign and
deliver at such Corporate Trust Office, to the transferee (in the case of
transfer) or holder (in the case of exchange) or send by first class mail at the
risk of the transferee (in the case of transfer) or holder (in the case of
exchange) to such address as the transferee or holder, as applicable, may
request, an Individual Certificate or Certificates, as the case may require, for
a like aggregate Fractional Undivided Interest and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
Corporate Trust Office by the registered holder in person, or by a duly
authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; PROVIDED, HOWEVER, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge 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.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
(m) The following legend shall be placed on each Class of Subordinate
Certificates (other), whether upon original issuance or upon issuance of any
other Certificate of any such Class in exchange therefor or upon transfer
thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING
OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND/OR OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0,
XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY DUTIES ON THE PART OF THE MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF A PRIVATE
CERTIFICATE.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a)
If (i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Master Servicer, the
Trustee and any agent of the Seller, the Master Servicer or the Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
6.01 and for all other purposes whatsoever. Neither the Seller, the Master
Servicer, the Trustee nor any agent of the Seller, the Master Servicer or the
Trustee shall be affected by notice to the contrary. No Certificate shall be
deemed duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the third Business Day preceding such Record Date.
Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is not a Disqualified Organization (as defined in Subsection 5.05(b))
(and, unless the Tax Matters Person and the Seller consent to the transfer to a
person who is not a U.S. Person, an affidavit that it is a U.S. Person) as
provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is not any of (A) the United States, any state or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing (other
than an instrumentality that is a corporation all of whose activities are
subject to tax under Chapter 1 of Subtitle A of the Code and (except in the case
of FHLMC) a majority of whose board of directors is not selected by the United
States, or any state or political subdivision thereof), (B) any organization
that is exempt from any tax imposed by Chapter 1 of Subtitle A of the Code,
other than (x) a tax-exempt farmers' cooperative within the meaning of Section
521 of the Code or (y) an organization that is subject to the tax imposed by
Section 511 of the Code on "unrelated business taxable income" or (C) a
corporation operating on a cooperative basis that is engaged in furnishing
electric energy or providing telephone service to persons in rural areas (within
the meaning of Section 1381(a)(2)(C) of the Code) (any Person described in (A),
(B), or (C) being referred to herein as a "Disqualified Organization") and that
(ii) such transferee is not acquiring such Residual Certificate for the account
of a Disqualified Organization. The Tax Matters Person shall not consent to a
transfer of a Residual Certificate if it has actual knowledge that any statement
made in the affidavit issued pursuant to the preceding sentence is not true.
Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to a Disqualified Organization, such transfer, sale or other
disposition shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to a Disqualified Organization and
that any transfer of such Residual Certificates will not cause the imposition of
a tax upon the Trust or cause any Series REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing
(which consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a "United States person,"
as such term is defined in Section 7701(a)(30) of the Code.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Master Servicer to act as its agent
with respect to all matters concerning the tax obligations of the Trust.
Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES.
(a) No offer, sale, transfer or other disposition (including pledge) of a
Private Certificate shall be made by any Holder thereof unless registered under
the Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Seller) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-1 hereto, or a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions of the
immediately preceding sentence, no restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in a Physical
Certificate that is a Global Certificate of a Class to a transferee that takes
delivery in the form of a beneficial interest in the Global Certificate of such
Class provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB. In the case of a proposed transfer of
a Private Certificate to a transferee other than a QIB, the Trustee may require
an Opinion of Counsel that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.
(b) Each Class B-4, Class B-5, Class B-6, Class 2-B-4, Class 2-B-5,
Class 2-B-6, Class 3-B-4, Class 3-B-5 and Class 3-B-6 Certificate shall bear a
Securities Legend.
Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Class of Private Certificates may be acquired directly or
indirectly by, or on behalf of, an employee benefit plan or other retirement
arrangement which is subject to Title I of ERISA and/or Section 4975 of the
Code, unless the proposed transferee provides a representation to the Trustee
(upon which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of a Certificate and the servicing, management and
operation of the Trust: (i) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (ii) will not give
rise to any additional fiduciary duties under ERISA on the part of either Master
Servicer or the Trustee.
(b) Any Person acquiring an interest in a Book-Entry Certificate or a
Global Certificate which is a Subordinate Certificate, by acquisition of such
Certificate, shall be deemed to have represented to the Trustee that it is
either: (i) not acquiring an interest in such Certificate directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of ERISA and/or Section 4975 of the Code, or (ii)
such Person provides a representation or certification to the Trustee to the
effect that the transfer and/or holding of an interest in such Certificate and
the servicing, management and/or operation of the Trust and its assets: (I) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not limited
to, XXX 00-00, XXX 00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II) will not
give rise to any additional fiduciary duties on the part of either Master
Servicer or the Trustee.
Section 5.08. RULE 144A INFORMATION. For so long as any Private
Certificates are outstanding and are "restricted securities" within the meaning
of Rule 144(a)(3) of the Securities Act, (1) the Seller will provide or cause to
be provided to any holder of such Certificates and any prospective purchaser
thereof designated by such a holder, upon the request of such holder or
prospective purchaser, the information required to be provided to such holder or
prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2) the
Seller shall update such information from time to time in order to prevent such
information from becoming false and misleading and will take such other actions
as are necessary to ensure that the safe harbor exemption from the registration
requirements of the Securities Act under Rule 144A is and will be available for
resales of such Certificates conducted in accordance with Rule 144A. The Master
Servicer shall cooperate with the Seller and furnish the Seller such information
in the Master Servicer's possession as the Seller may reasonably request.
ARTICLE VI
Payments to Certificateholders
Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on the Certificates will be distributed monthly on each Distribution
Date, commencing in March 1998, in an aggregate amount equal to the Available
Funds for such Distribution Date.
(i) GROUP 1 SENIOR CERTIFICATES. (A) On each Distribution Date, the
Group 1 Available Funds will be distributed in the following order of priority
among the Group 1 Senior Certificates except as otherwise noted and subject to
the provisions of Section 6.01(c):
FIRST, to the interest-bearing Classes of Group 1 Senior Certificates,
the Accrued Certificate Interest on each such Class for such
Distribution Date. As described below, Accrued Certificate Interest on
each Class of Group 1 Certificates is subject to reduction in the
event of certain Net Interest Shortfalls allocable thereto. Any Net
Interest Shortfalls shall be allocated among the Group 1 Senior
Certificates as provided under 6.01(e);
SECOND, to the interest-bearing Classes of Group 1 Senior
Certificates, any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to the extent of
remaining Group 1 Available Funds, any shortfall in available amounts
being allocated among such Classes in proportion to the amount of such
Accrued Certificate Interest remaining undistributed for each such
Class for such Distribution Date;
THIRD, to the Group 1 Senior Certificates (other than the Class A-8
and Class X Certificates) in reduction of the Current Principal
Amounts thereof:
(a) the Group 1 Senior P&I Optimal Principal Amount, in the following
order of priority:
first, concurrently to the Class R-1 and Class R-2 Certificates,
PRO RATA, based upon their Current Principal Amounts until their
respective Current Principal Amounts thereof have been reduced to
zero;
second, to the Class A-18 Certificates up to the Class A-18
Optimal Principal Amount for such Distribution Date, until the
Current Principal Amount thereof has been reduced to zero;
third, sequentially, to the Class X-0, Xxxxx X-0, Class A-3,
Class A-4, Class A-5, Class A-6 and Class A-7 Certificates, in
that order, until their respective Current Principal Amounts have
been reduced to their respective Planned Balances (as set forth
in Exhibit I hereto) for such Distribution Date;
fourth, sequentially, to the Class A-9 and Class A-10
Certificates, in that order, until their respective Current
Principal Amounts have been reduced to their respective Planned
Balances (as set forth in Exhibit I hereto) for such Distribution
Date;
fifth, concurrently to the Class A-13 and Class A-17 Certificates
in the percentages of 87.50% and 12.50% respectively, until their
respective Current Principal Amounts have been reduced to their
respective Planned Balances (as set forth in Exhibit I hereto)
for such Distribution Date;
sixth, concurrently to the Class A-14, Class A-15, Class A-16 and
Class A-17 Certificates, PRO RATA, based upon their respective
Current Principal Amounts, until their respective Current
Principal Amounts have been reduced to their respective Planned
Balances (as set forth in Exhibit I hereto) for such Distribution
Date;
seventh, concurrently to the Class A-11 and Class A-12
Certificates, pro rata, based on their respective Current
Principal Amounts, until their respective Current Principal
Amounts thereof have been reduced to zero;
eighth, sequentially, to the Class A-9 and Class A-10
Certificates, in that order, without regard to their respective
Planned Balances for such Distribution Date, until their
respective Current Principal Amounts thereof have been reduced to
zero;
ninth, concurrently to the Class A-13 and Class A-17 Certificates
in the percentage set forth in clause fifth above, without regard
to their respective Planned Balances for such Distribution Date,
until the respective Current Principal Amounts thereof have been
reduced to zero;
tenth, concurrently to the Class A-14, Class A-15, Class A-16 and
Class A-17 Certificates, PRO RATA, based upon their respective
Current Principal Amounts, without regard to their respective
Planned Balances for such Distribution Date, until their
respective Current Principal Amounts thereof have been reduced to
zero; and
eleventh, sequentially to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6 and Class A-7 Certificates, in
that order, without regard to their respective Planned Balances
for such Distribution Date, until their respective Current
Principal Amounts thereof have been reduced to zero; and
(b) the Class P Principal Distribution Amount for such Distribution
Date, to the Class P Certificates, until the Current Principal
Amount of the Class P Certificates has been reduced to zero;
FOURTH, the Class P Deferred Amount for such Distribution Date, to the Class P
Certificates; provided, that (i) on any Distribution Date, distributions
pursuant to this priority fourth shall not exceed the excess, if any, of (x) the
Group 1 Available Funds remaining after giving effect to distributions pursuant
to clauses FIRST through THIRD above over (y) the sum of the amount of Accrued
Certificate Interest for such Distribution Date and Accrued Certificate Interest
remaining undistributed from previous Distribution Dates on all Classes of Group
1 Subordinate Certificates then outstanding, (ii) such distributions shall not
reduce the Current Principal Amount of the Class P Certificates, and (iii) no
distribution will be made in respect of the Class P Deferred Amount after the
Group 1 Cross-Over Date;
(B) On each Distribution Date after the Group 1 Cross-Over Date,
distributions of principal on the outstanding Group 1 Senior Certificates (other
than the Class A-8, Class X and Class P Certificates) will be made pro rata
among all such Group 1 Senior Certificates, regardless of the allocation, or
sequential nature, of principal payments described in priority THIRD above,
based upon the then Current Principal Amounts of such Group 1 Senior
Certificates.
(C) If, after distributions have been made pursuant to priorities
FIRST and SECOND of this Section 6(a)(i) on any Distribution Date, the remaining
Group 1 Available Funds, are less than the sum of the Group 1 Senior P&I Optimal
Principal Amount and the Class P Principal Distribution Amount for such
Distribution Date, such amounts shall be proportionately reduced, and such
remaining Group 1 Available Funds will be distributed on the Group 1 Senior
Certificates (other than the Class A-8 and Class X Certificates) on the basis of
such reduced amounts. Notwithstanding any reduction in principal distributable
to the Class P Certificates pursuant to this paragraph, the principal balance of
the Class P Certificates shall be reduced not only by principal so distributed
but also by the difference between (i) principal distributable to the Class P
Certificates in accordance with clause (b) of priority THIRD above and (ii)
principal actually distributed to the Class P Certificates after giving effect
to this paragraph (such difference, the "Class P Cash Shortfall"). The Class P
Cash Shortfall with respect to any Distribution Date will be added to the Class
P Deferred Amount.
(D) The "Class A-18 Optimal Principal Amount" for any Distribution
Date occurring prior to the Distribution Date in March 2003 will equal zero. The
Class A-18 Optimal Principal Amount for any Distribution Date occurring after
the first five years following the Closing Date will be as follows: for any
Distribution Date during the sixth, seventh, eighth and ninth years after the
Closing Date, 30%, 40%, 60% and 80%, respectively, of the Class A-18 Pro Rata
Optimal Principal Amount for such Distribution Date; and, for any Distribution
Date thereafter, 100% of the Class A-18 Pro Rata Optimal Principal Amount for
such Distribution Date. Notwithstanding the foregoing, if on any Distribution
Date the Current Principal Amount of each Class of Group 1 Senior Certificates
(other than the Class A-18 Certificates and the Class P Certificates) has been
reduced to zero, the Class A-18 Optimal Principal Amount shall equal the Group 1
Senior P&I Optimal Principal Amount to the extent not distributed on such
Distribution Date to other Classes of Group 1 Senior Certificates.
(E) For any Distribution Date, the "Class A-18 Pro Rata Optimal
Principal Amount" shall be an amount equal to the product of (x) the sum of the
Group 1 Senior P&I Optimal Principal Amount and the Group 1 Subordinate Optimal
Principal Amount for such Distribution Date multiplied by (y) a fraction, the
numerator of which is the sum of the Current Principal Amounts of the Class A-18
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Current Principal Amounts of all Classes of Group 1
Senior Certificates (other than the Class P Certificates) immediately prior to
such Distribution Date.
(ii) [Reserved]
(iii) GROUP B SUBORDINATE CERTIFICATES. On each Distribution Date,
subject to the provisions of Section 6.01(c), the Group 1 Available Funds
remaining after the distributions described above under Section 6.01(a)(i) will
be distributed among the Group B Subordinate Certificates sequentially, in the
following order, to the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (c) such Class's Allocable
Share for such Distribution Date.
(iv) [Reserved]
(v) GROUP 2 CERTIFICATES. (A) On each Distribution Date, the Group 2
Available Funds will be distributed in the following order of priority among the
Group 2 Certificates except as otherwise noted:
FIRST, to the Group 2 Senior Certificates, the Accrued Certificate
Interest on each such Class for such Distribution Date. As described
below, Accrued Certificate Interest on each such Class of Group 2
Certificates is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto. Any Net Interest Shortfalls
shall be allocated among the Group 2 Senior Certificates as described
below;
SECOND, to the Group 2 Senior Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous Distribution
Dates, to the extent of remaining Group 2 Available Funds, any
shortfall in available amounts being allocated among such Classes in
proportion to the amount of such Accrued Certificate Interest
remaining undistributed for each such Class for such Distribution
Date;
THIRD, to the Group 2 Senior Certificates in reduction of the Current
Principal Amounts thereof, the Group 2 Senior P&I Optimal Principal
Amount, in the following order of priority:
first, to the Class R-3 Certificates, until the Current Principal
Amounts thereof has been reduced to zero;
second, to the Class 2-A-8 Certificates up to the Class 2-A-8
Optimal Principal Amount (as defined herein) for such
Distribution Date, until the Current Principal Amount thereof has
been reduced to zero;
third, concurrently, to the Class 2-A-1 and Class 2-A-4
Certificates in the percentages of 76.3961170121% and
23.6038829879%, respectively, until the Current Principal Amount
of the Class 2-A-1 Certificates has been reduced to zero;
fourth, concurrently, to the Class 2-A-2 and Class 2-A-4
Certificates in the percentages of 74.9546810613% and
25.0453189387%, respectively, until the Current Principal Amount
of the Class 2-A-2 Certificates has been reduced to zero;
fifth, concurrently, to the Class 2-A-3 and Class 2-A-4
Certificates in the percentages of 79.4519607755% and
20.0000000000%, respectively, until the Current Principal Amounts
thereof have been reduced to zero; and
sixth, sequentially, to the Class 2-A-5, Class 2-A-6 and Class
2-A-7 Certificates, in that order, until their respective Current
Principal Amounts have been reduced to zero; and
FOURTH, sequentially, in the following order, to the Class 2-B-1,
Class 2-B-2, Class 2-B-3, Class 2-B-4, Class 2-B-5 and Class 2-B-6
Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (c) such
Class's Allocable Share for such Distribution Date.
(B) On each Distribution Date after the Group 2 Cross-Over Date,
distributions of principal on the outstanding Group 2 Senior Certificates will
be made pro rata among all such Group 2 Senior Certificates, regardless of the
allocation, or sequential nature, of principal payments described in priority
THIRD above, based upon the then Current Principal Amounts of such Group 2
Senior Certificates.
(C) The "Class 2-A-8 Optimal Principal Amount" for any Distribution
Date occurring prior to the Distribution Date in March 2003 will equal zero. The
Class 2-A-8 Optimal Principal Amount for any Distribution Date occurring after
the first five years following the Closing Date will be as follows: for any
Distribution Date during the sixth, seventh, eighth and ninth years after the
Closing Date, 30%, 40%, 60% and 80%, respectively, of the Class 2-A-8 Pro Rata
Optimal Principal Amount (as defined below) for such Distribution Date; and, for
any Distribution Date thereafter, 100% of the Class 2-A-8 Pro Rata Optimal
Principal Amount for such Distribution Date. Notwithstanding the foregoing, if
on any Distribution Date the Current Principal Amount of each Class of Group 2
Senior Certificates (other than the Class 2-A-8 Certificates) has been reduced
to zero, the Class 2-A-8 Optimal Principal Amount shall equal the Group 2 Senior
P&I Optimal Principal Amount to the extent not distributed on such Distribution
Date to other Classes of Group 2 Senior Certificates or Residual Certificates.
(D) For any Distribution Date, the "Class 2-A-8 Pro Rata Optimal
Principal Amount" shall be an amount equal to the product of (x) the sum of the
Group 2 Senior P&I Optimal Principal Amount and the Group 2 Subordinate Optimal
Principal Amount for such Distribution Date multiplied by (y) a fraction, the
numerator of which is the sum of the Current Principal Amounts of the Class
2-A-8 Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Current Principal Amounts of all Classes
of Group 2 Senior Certificates immediately prior to such Distribution Date.
(vi) GROUP 3 CERTIFICATES. (A) On each Distribution Date, the Group 3
Available Funds will be distributed in the following order of priority among the
Group 3 Certificates except as otherwise noted:
FIRST, to the Group 3 Senior Certificates, the Accrued Certificate
Interest for each such Class for such Distribution Date. As described
below, Accrued Certificate Interest on each such Class of Group 3
Certificates is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto. Any Net Interest Shortfalls
shall be allocated between the Group 3 Senior Certificates as
described below;
SECOND, to the Group 3 Senior Certificates, any Accrued Certificate
Interest thereon remaining undistributed from previous Distribution
Dates, to the extent of remaining Group 3 Available Funds, any
shortfalls in available amounts being allocated between such Classes
in proportion to the amount of Accrued Certificate Interest remaining
undistributed for each such Class for such Distribution Date;
THIRD, sequentially to the Class R-4 and Class 3A Certificates, in
that order, in reduction of the Current Principal Amount thereof, the
Group 3 Senior P&I Optimal Principal Amount, until the respective
Current Principal Amounts thereof have been reduced to zero; and
FOURTH, sequentially, in the following order, to the Class 3-B-1,
Class 3-B-2, Class 3-B-3, Class 3-B-4, Class 3-B-5 and Class 3-B-6
Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (c) such
Class's Allocable Share for such Distribution Date.
(B) On each Distribution Date after the Group 3 Cross-Over Date,
distributions of principal on the outstanding Group 3 Senior Certificates will
be made pro rata among all such Group 3 Senior Certificates, regardless of the
allocation, or sequential nature, of principal payments described in priority
THIRD above, based upon the then Current Principal Amounts of such Group 3
Senior Certificates.
(b) "Pro rata" distributions among Classes of Certificates will be
made in proportion to the then Current Principal Amount of such Classes.
(c) On each Distribution Date, any Available Funds remaining after
payment of interest and principal as described above will be distributed, to the
Class R-1 Certificates; provided, however, that if the Group Available Funds for
any Certificate Group are insufficient to pay the entire amount required to be
paid to such Certificate Group on such Distribution Date, the amount payable to
the Class A-1 Certificates pursuant to this subclause (c) shall instead be paid
to the related Certificate Groups, pro rata based upon the amount of such
shortfalls.
(d) No Accrued Certificate Interest will be payable with respect to
any Class of Certificates after the Distribution Date on which the Current
Principal Amount or Notional Amount of such Certificate has been reduced to
zero.
(e) If on any Distribution Date the applicable Available Funds for the
Senior Certificates of a Certificate Group is less than the Accrued Certificate
Interest on such Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfall and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
interest-bearing Senior Certificates in such Certificate Group in proportion to
the respective amounts of Accrued Certificate Interest that would have been
allocated thereto in the absence of such Net Interest Shortfall and/or Realized
Losses for such Distribution Date. In addition, the amount of any interest
shortfalls with respect to the related Mortgage Loan Group will constitute
unpaid Accrued Certificate Interest and will be distributable to holders of the
Certificates of the related Classes entitled to such amounts on subsequent
Distribution Dates, to the extent of the applicable Available Funds after
current interest distributions as required herein. Any such amounts so carried
forward will not bear interest. Shortfalls in interest payments will not be
offset by a reduction in the servicing compensation of the Sub-Servicers or
otherwise, except to the extent of applicable Compensating Interest Payments.
(f) On each Distribution Date, the funds available for distribution
shall be allocated to distributions on each of the REMIC II, REMIC III and REMIC
IV Regular Interests in an amount sufficient to make the distributions on the
corresponding Certificates on such Distribution Date in accordance with the
provisions of subsection (a) of this Section 6.01 and Section 5.01, unless
specifically provided otherwise in this Agreement.
(g) The expenses and fees of the Trust shall be paid by each of REMIC
II, REMIC III and REMIC IV, respectively, to the extent that such expenses
relate to the assets for each of such respective Series REMICs, and all other
expenses and fees of the Trust shall be paid pro rata by each of REMIC II, REMIC
III and REMIC IV.
Section 6.02. [Reserved]
Section 6.03. ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan in each Mortgage Loan Group that
occurred during the immediately preceding calendar month. The Master Servicer's
determination of any Realized Losses shall be based solely upon the information
provided by the Sub-Servicers. The Trustee shall then with respect to each such
Mortgage Loan in each Mortgage Loan Group allocate Realized Losses on a pro rata
basis between the PO Percentage of the Scheduled Principal Balance of a Mortgage
Loan which suffered a Realized Loss and the Non-PO Percentage of the Scheduled
Principal Balance of such Mortgage Loan.
(b) (A) With respect to any Determination Date, with respect to Group
1 Certificates, the principal portion of each Realized Loss on a Group 1
Mortgage Loan (other than any Excess Special Hazard Loss and Excess Fraud Loss)
shall be allocated as follows:
(i) The applicable PO Percentage of any such Realized Loss
shall be allocated to the Class P Certificates; and
(ii) The applicable Non-PO Percentage of any such Realized
Loss shall be allocated as follows:
first, to the Class B-6 Certificates until the current
Principal Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current
Principal amount thereof has been reduced to zero;
seventh, to the Classes of Group 1 Senior Certificates
(other than the Class A-8, Class X and Class P Certificates), pro
rata, in accordance with their Current Principal Amounts; and
(B) With respect to any Distribution Date, with respect to Group
2 Certificates, the principal portion of each Realized Loss on a Group 2
Mortgage Loan shall be allocated as follows:
(i) [Reserved]
(ii) The applicable Non-PO Percentage of such Realized Loss
(other than any Excess Special Hazard Loss and Excess Fraud Loss)
shall be allocated as follows:
first, to the Class 2-B-6 Certificates until the
Current Principal Amount thereof has been reduced to zero;
second, to the Class 2-B-5 Certificates until the
Current Principal Amount thereof has been reduced to zero;
third, to the Class 2-B-4 Certificates until the
Current Principal Amount thereof has been reduced to zero;
fourth, to the Class 2-B-3 Certificates until the
Current Principal Amount thereof has been reduced to zero;
fifth, to the Class 2-B-2 Certificates until the
Current Principal Amount thereof has been reduced to zero;
sixth, to the Class 2-B-1 Certificates until the
Current Principal Amount thereof has been reduced to zero;
seventh, to the Classes of Group 2 Senior Certificates,
pro rata, in accordance with their Current Principal Amounts; and
(C) With respect to any Distribution Date, with respect to Group
3 Certificates, the principal portion of each Realized Loss on a Group 3
Mortgage Loan (other than any Excess Special Hazard Loss and Excess Fraud Loss)
shall be allocated as follows:
(i) [Reserved]
(ii) The applicable Non-PO Percentage of any such Realized
Loss shall be allocated as follows:
first, to the Class 3-B-6 Certificates until the
Current Principal Amount thereof has been reduced to zero;
second, to the Class 3-B-5 Certificates until the
Current Principal Amount thereof has been reduced to zero;
third, to the Class 3-B-4 Certificates until the
Current Principal Amount thereof has been reduced to zero;
fourth, to the Class 3-B-3 Certificates until the
Current Principal Amount thereof has been reduced to zero;
fifth, to the Class 3-B-2 Certificates until the
Current Principal Amount thereof has been reduced to zero;
sixth, to the Class 3-B-1 Certificates until the
Current Principal amount thereof has been reduced to zero;
seventh, to the Class 3-A Certificates; and
(D) With respect to any Distribution Date, the principal portion
of any Excess Loss related to a Mortgage Loan Group shall be allocated as
follows:
(i) with respect to the Group 1 Mortgage Loans, the
applicable PO Percentage of any such Excess Loss shall be allocated to
the Class P Certificates; and
(ii) with respect to each Group of Mortgage Loans, the
applicable Non-PO Percentage of any such Excess Loss shall be
allocated among all Classes of Certificates of the related Certificate
Group (other than the Class A-8, Class P and Class X Certificates),
pro rata, based on the respective Current Principal Amounts thereof.
(E) [Reserved]
(F) Notwithstanding the foregoing, no such allocation of any
Realized Loss shall be made on a Distribution Date to (A) any Class of Group 1
Certificates to the extent that such allocation would result in the reduction of
the aggregate Current Principal Amounts of all the Group 1 Certificates as of
such Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of all of the Group 1 Mortgage Loans as of
the first day of the month of such Distribution Date (such limitation, the
"Group 1 Loss Allocation Limitation"), (B) a Class of Group 2 Certificates to
the extent that such allocation would result in the reduction of the aggregate
Current Principal Amounts of all the Group 2 Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of the Group 2 Mortgage Loans as of the
first day of the month of such Distribution Date (such limitation, the "Group 2
Loss Allocation Limitation") and (C) a Class of Group 3 Certificates to the
extent that such allocation would result in the reduction of the aggregate
Current Principal Amounts of all the Group 3 Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of the Group 3 Mortgage Loans as of the
first day of the month of such Distribution Date (such limitation, the "Group 3
Loss Allocation Limitation").
(c) Any Realized Losses allocated to a Class of Certificates pursuant
to Subsection 6.03(b) shall be allocated among the Certificates of such Class in
proportion to their respective Current Principal Amounts. Any allocation of
Realized Losses pursuant to this Subsection 6.03(c) shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date in accordance with Subsection 6.03(d).
(d) Realized Losses allocated in accordance with this Section 6.03
shall be allocated on the Distribution Date in the month following the month in
which such loss was incurred and, in the case of the principal portion thereof,
after giving effect to distributions made on such Distribution Date, except that
the aggregate amount of Realized Losses to be allocated to the Class P
Certificates on any Distribution Date through the Group 1 Cross-Over Date will
be taken into account in determining distributions in respect of the Class P
Deferred Amount for such Distribution Date.
(e) On each Distribution Date, the Master Servicer shall determine the
Group 1 Subordinate Certificate Writedown Amount, Group 2 Subordinate
Certificate Writedown Amount and Group 3 Subordinate Certificate Writedown
Amount, respectively, if any. Any such Group 1 Subordinate Certificate Writedown
Amount, Group 2 Subordinate Certificate Writedown Amount or Group 3 Subordinate
Certificate Writedown Amount, respectively, shall effect a corresponding
reduction in the Current Principal Amount of (i) if prior to the Group 1
Cross-Over Date, the Group 2 Cross-Over Date or Group 3 Cross-Over Date, as
applicable, the Current Principal Amounts of the Group 1 Subordinate
Certificates, the Group 2 Subordinate Certificates and the Group 3 Subordinate
Certificates, respectively, in the reverse order of their numerical Class
designations and (ii) from and after the Group 1 Cross-Over Date, the Group 2
Cross-Over Date or Group 3 Cross-Over Date, as applicable, the Group 1 Senior
Certificates, the Group 2 Senior Certificates and the Group 3 Senior
Certificates, respectively, pro rata based on their respective Current Principal
Amounts, which reduction shall occur on such Distribution Date after giving
effect to distributions made on such Distribution Date.
(f) On each Distribution Date, on or prior to the Group 1 Cross-Over
Date, the Trustee shall determine the Class P Deferred Payment Writedown Amount,
if any. Any such Class P Deferred Payment Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of the Group 1
Subordinate Certificates, in the reverse order of their numerical Class
designations.
(g) The interest portion of any Realized Losses on Group 1 Mortgage
Loans, Group 2 Mortgage Loans and Group 3 Mortgage Loans occurring on or prior
to the Group 1 Cross-Over Date, the Group 2 Cross-Over Date or the Group 3
Cross-Over Date, respectively, will not be allocated among any Certificates, but
will reduce the amount of Group 1 Available Funds, Group 2 Available Funds and
Group 3 Available Funds, respectively, on the related Distribution Date. As a
result of the subordination of the, Group 1 Subordinate Certificates, Group 2
Subordinate Certificates and Group 3 Subordinate Certificates, respectively, in
right of distribution, such Realized Losses on the Group 1 Mortgage Loans, the
Group 2 Mortgage Loans and the Group 3 Mortgage Loans, will be borne first by
the Group 1 Subordinate Certificates, Group 2 Subordinate Certificates and Group
3 Subordinate Certificates, respectively, in inverse order of their numerical
Class designations.
(h) Notwithstanding anything contained herein to the contrary
(including but not limited to Section 6.03(b)(F) above), Bankruptcy Losses will
be allocated to the Class of Subordinate Certificates with the highest numerical
designation regardless of Group and if two or more Subordinate Groups have as
the most Subordinate Certificates outstanding Subordinate Certificates with the
same numerical designation, then first to the related Subordinate Certificates
until that Class has been reduced to zero and then to the other Class or
Classes, pro rata (based upon Current Principal Amount).
Section 6.04. [Reserved]
Section 6.05. PAYMENTS. (a) No later than three Business Days prior to
the Distribution Date, the Master Servicer shall provide to the Trustee in such
electronic format mutually agreed on by the Trustee and the Master Servicer any
information that the Master Servicer has received from the Sub-Servicers and
required to enable the Trustee to make, or cause its agent to make,
distributions on the Certificates and prepare reports to Certificateholders.
(b) On each Distribution Date, other than the final Distribution Date,
the Trustee shall distribute to each Certificateholder of record on the directly
preceding Record Date the Certificateholder's PRO RATA share of its Class (based
on the aggregate Fractional Undivided Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class. The Master Servicer shall calculate the amount to be
distributed to each Class and, based on such amounts, the Trustee shall
determine the amount to be distributed to each Certificateholder.
(c) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder holding Certificates representing an
initial aggregate Current Principal Amount or Notional Amount of not less than
$1,000,000 by wire transfer to a United States dollar account maintained by the
payee at any United States depository institution with appropriate facilities
for receiving such a wire transfer; PROVIDED, however, that the final payment in
respect of each Class of Certificates will be made only upon presentation and
surrender of such respective Certificates at the office or agency of the Trustee
specified in the notice to Certificateholders of such final payment.
Section 6.06. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Trustee shall forward by
first-class mail to each Certificateholder, with a copy to the Seller and the
Rating Agencies, a statement setting forth the following information, expressed
with respect to clauses (i) through (vi) in the aggregate and as a Fractional
Undivided Interest representing an initial Current Principal Amount of $1,000,
or in the case of Class A-8 and Class X Certificates, a Notional Amount of
$1000, or in the case of the Residual Certificates, an initial Current Principal
Amount of $50:
(i) the Current Principal Amount (or Notional Amount in the case
of the Class A-8 and Class X Certificates) of each Class of
Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class of interest-bearing
Certificates during the related Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of interest-bearing Certificates;
(v) the amount of the distribution allocable to interest on each
Class of interest-bearing Certificates;
(vi) the Pass-Through Rates for each Class of interest-bearing
Certificates with respect to such Distribution Date;
(vii) the Current Principal Amount (or Notional Amount in the
case of the Class A-8 and Class X Certificates) of each Class of
Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest
Payments and outstanding unreimbursed advances by the Sub-Servicers or
the Master Servicer included in such distribution separately stated
for each Mortgage Loan Group;
(ix) the amount of any Realized Losses (listed separately for
each Mortgage Loan Group) during the related Prepayment Period and
cumulatively since the Cut-off Date and the amount and source
(separately identified) of any distribution in respect thereof
included in such distribution;
(x) the amount of Scheduled Principal and Principal Prepayments,
(including but separately identifying the principal amount of
principal prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation
Proceeds) with respect to each Mortgage Loan Group and the number and
principal balance of Mortgage Loans purchased or substituted for
during the relevant period and cumulatively since the Cut-off Date
with respect to each Mortgage Loan Group;
(xi) the number of Mortgage Loans (excluding REO Property) in
each Mortgage Loan Group remaining in the Trust Fund as of the end of
the related Due Period;
(xii) information for each Mortgage Loan Group regarding any
Mortgage Loan delinquencies as of the end of the related Due Period,
including the aggregate number, aggregate Outstanding Principal
Balance and aggregate Scheduled Principal Balance of Mortgage Loans
delinquent one month, two months and three months or more;
(xiii) for each Mortgage Loan Group, the number of Mortgage Loans
in the foreclosure process as of the end of the related Due Period and
the aggregate Outstanding Principal Balance of such Mortgage Loans;
(xiv) for each Mortgage Loan Group, the number and aggregate
Outstanding Principal Balance of all Mortgage Loans as to which the
Mortgaged Property was REO Property as of the end of the related Due
Period;
(xv) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property in each
Mortgage Loan Group; PROVIDED THAT, in the event that such information
is not available to the relevant Master Servicer and the Trustee on
the Distribution Date, such information shall be furnished promptly
after it becomes available;
(xvi) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate
for all prior Distribution Dates; and
(xvii) the then applicable Senior Percentage, Senior Prepayment
Percentage, Subordinate Percentage and Subordinate Prepayment
Percentage for each Certificate Group.
The information set forth above shall be calculated, or reported, as
the case may be, by the Master Servicer, upon which the Trustee may conclusively
rely. The information furnished by the Master Servicer shall be sufficient for
the Trustee to calculate any statements it is required to make.
(b) By April 30 of each year beginning in 1999, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer may determine to be necessary
and/or to be required by the Internal Revenue Service or by a federal or state
law or rules or regulations to enable such Holders to prepare their tax returns
for such calendar year. Such obligations shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Trustee pursuant to the requirements of the Code.
The Master Servicer shall supply to the Trustee in a timely manner the
information required for the reports described above.
Section 6.07. [Reserved].
Section 6.08. MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act, the applicable Sub-Servicing Agreement will
require the Sub-Servicer to deposit in the Master Servicer Collection Account on
the applicable Sub-Servicer Remittance Date an amount equal to such deficiency,
net the related Sub-Servicing Fee and Excess Servicing Fee, except to the extent
the applicable Sub-Servicer determines any such advance to be nonrecoverable
from Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage
Loan for which such Monthly Advance was made. On each Distribution Date, to the
extent that any Sub-Servicer fails to make a Monthly Advance required by the
applicable Sub-Servicing Agreement, the Master Servicer will be obligated to
make such Monthly Advance, except to the extent the Master Servicer determines
any such advance to be nonrecoverable from Liquidation Proceeds, Insurance
Proceeds or from future payments on the Mortgage Loan for which the advance was
made. Any amount used as a Certificate Account Advance shall be replaced by the
related Sub-Servicer by deposit in the appropriate subaccount of the
Certificate Account on or before any future date on which and to the extent that
funds in the appropriate subaccount of the Certificate Account on such date are
less than the amount required to be transferred to such subaccount of the
Certificate Account. If applicable, on the Business Day preceding each
Distribution Date, the Master Servicer shall present an Officer's Certificate to
the Trustee (i) stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount and (ii) detailing the reason it deems the advance to
be nonrecoverable.
Section 6.09. COMPENSATING INTEREST PAYMENTS. Each Sub-Servicer shall
deposit in the Master Servicer Collection Account not later than the
Sub-Servicer Remittance Date immediately preceding the related Distribution Date
an amount equal to the lesser of (i) the aggregate amounts determined pursuant
to subclauses (a) and (b) of the definition of Interest Shortfall as calculated
with respect to Mortgage Loans sub-serviced by such Sub-Servicer for the related
Distribution Date and (ii) the applicable Sub-Servicing Fee for such
Distribution Date (such amount, the "Compensating Interest Payment"). One
Business Day prior to each Distribution Date, the Master Servicer shall deposit
in the Certificate Account the sum of (i) all Compensating Interest Payments
received from the Sub-Servicers for such Distribution Date and (ii) Compensating
Interest Payments required to be made by a Sub-Servicer but not made by such
Distribution Date (provided that the amount determined pursuant to (ii) shall
not exceed the Master Servicer Compensation for such Distribution Date). Neither
the Master Servicer nor any Sub-Servicer shall be entitled to any reimbursement
of any Compensating Interest Payment.
Section 6.10. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. Each year the Master Servicer shall cause the Sub-Servicers to report
or cause to be reported to the Internal Revenue Service foreclosures and
abandonments of any Mortgaged Property as required by Section 6050J of the Code.
ARTICLE VII
The Master Servicer
Section 7.01. LIABILITIES OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein. The parties agree that
the Master Servicer shall master service the Mortgage Loans in accordance with
the terms of this Agreement. In that regard, the Master Servicer shall
supervise, administer, monitor and oversee the servicing of the Mortgage Loans
by each Sub-Servicer pursuant to the terms of its Sub-Servicing Agreement, in
accordance with this Agreement and applicable laws and regulations and giving
due consideration to customary and usual standards of practice of prudent
mortgage lenders and master servicers. In addition, the Master Servicer shall
(i) oversee and consult with each Sub-Servicer as appropriate from time to time
to fulfill the Master Servicer's obligations hereunder, (ii) receive, review and
evaluate all reports, information and other data and documents provided to the
Master Servicer by each Sub-Servicer and (iii) otherwise exercise its best
efforts, as more fully set forth herein, to cause each Sub-Servicer to perform
and observe the covenants, obligations and conditions required to be performed
under its Sub-Servicing Agreement.
Section 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER. (a)
[Reserved].
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. INDEMNIFICATION OF THE TRUSTEE. The Trust shall
indemnify the Indemnified Persons for, and to hold them harmless against, any
loss, liability or expense incurred on their part, arising out of, or in
connection with, this Agreement, including the costs and expenses (including
reasonable legal fees and expenses) of defending themselves against any such
claim other than (i) any loss, liability or expense related to such Indemnified
Person's failure to perform such Indemnified Person's duties in strict
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement and (ii) any loss,
liability or expense incurred by reason of such Indemnified Person's willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. In
addition, the Master Servicer shall indemnify the Indemnified Person for, and
hold them harmless against, any loss, liability or expense incurred on their
part, arising out of, or in connection with, this Agreement, including the costs
and expenses (including reasonable legal fees and expenses) of defending
themselves against any such claim, but only to the extent any such loss,
liability or expense results solely from the Master Servicer's failure to
perform its duties in strict compliance with this Agreement. This indemnity
shall survive the resignation or removal of the Trustee and the termination of
this Agreement.
Section 7.04. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. (a) Neither the Master Servicer, any Sub-Servicer nor any of their
directors, officers, employees or agents shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect either Master Servicer, any Sub-Servicer or any
such Person against any breach of warranties or representations made herein or
any liability which would otherwise be imposed by reason of such Person's
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent
of the Master Servicer may rely in good faith on any document of any kind PRIMA
FACIE properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and each Sub-Servicer and any director,
officer, employee or agent of the Master Servicer or any Sub-Servicer shall be
indemnified by the Trust and held harmless thereby against any loss, liability
or expense incurred in connection with any legal proceedings relating to this
Agreement or the Certificates (including reasonable legal fees and disbursements
of counsel), other than (i) any loss, liability or expense related to its
failure to perform its duties in strict compliance with this Agreement (except
as any such loss, liability or expense shall be otherwise reimbursable pursuant
to this Agreement) and (ii) any loss, liability or expense incurred by reason of
such Person's willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder.
(d) Neither the Master Servicer nor any Sub-Servicer shall be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; PROVIDED, HOWEVER, the Master Servicer
and any Sub-Servicer may in its discretion, with the consent of the Trustee,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer and
any Sub-Servicer shall be entitled to be reimbursed therefor out of the related
Protected Account or the Certificate Account as provided by Subsection 4.03(a).
Any such indemnification or reimbursement to the Master Servicer and the
Sub-Servicers which is not specifically related to a Mortgage Loan Group shall
be charged against the subaccounts of the Certificate Account PRO RATA based
upon the respective outstanding principal amounts of the Mortgage Loans in each
of the Mortgage Loan Groups. Nothing in this Subsection 7.04(d) shall affect the
Master Servicer's obligation to supervise the servicing and administration of
the Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
Section 7.05. MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Independent Counsel to such effect delivered to the Trustee. No such
resignation by the Master Servicer shall become effective until the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
Section 7.06. [Reserved]
Section 7.07. SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in their entirety as Master Servicer under this Agreement; PROVIDED, HOWEVER,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
FNMA or FHLMC; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
ARTICLE VIII
Default
Section 8.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) The Master Servicer fails to cause to be deposited in the
Certificate Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
two Business Days after the date such deposit was required to be made;
or
(ii) The Master Servicer fails to observe or perform in any
material respect any other covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements
materially affect the rights of Certificateholders, and such failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, properly requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for
the winding up or liquidation of its affairs, and the continuance of
any such decree or order is unstayed and in effect for a period of 60
consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization
statute and the petition is not dismissed within 60 days after the
commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to
pay its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute,
makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting
such assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Mortgage Loans and/or the REO Property serviced by
the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates, the Mortgage
Loans, REO Property or under any other related agreements, including the
Sub-Servicing Agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; (ii) originals or copies of
all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder; and (iii) the
rights and obligations of the Master Servicer under the Sub-Servicing Agreements
with respect to the Mortgage Loans. In addition to any other amounts which are
then, or, notwithstanding the termination of its activities under this
Agreement, may become payable to the Master Servicer under this Agreement, the
Master Servicer shall be entitled to receive, out of any amount received on
account of a Mortgage Loan or REO Property, that portion of such payments which
it would have received as reimbursement pursuant to Section 3.14 if notice of
termination had not been given. The termination of the rights and obligations of
the Master Servicer shall not affect any obligations incurred by the Master
Servicer prior to such termination nor the right of the Master Servicer to its
accrued fees and expenses.
Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; PROVIDED, HOWEVER, that the Trustee (i) shall be
under no obligation to purchase any Mortgage Loan pursuant to Section 10.01; and
(ii) shall have no obligation whatsoever with respect to any liability (other
than advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of receipt by the Master Servicer of such
notice or by the Trustee of such Opinion of Independent Counsel. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to retain if the Master
Servicer had continued to act hereunder, except for those amounts due the Master
Servicer as reimbursement for advances previously made or expenses previously
incurred. Notwithstanding the above, the Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution which is a FNMA-or FHLMC-approved servicer, and with
respect to a successor to the Master Servicer only, having a net worth of not
less than $10,000,000, as the successor to such Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Pending appointment of a successor to the Master
Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; PROVIDED, HOWEVER, that
no such compensation shall be in excess of that permitted the Trustee under this
Subsection 8.02(a), and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04. WAIVER OF DEFAULTS. The Trustee shall transmit by mail
to all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences thereof, except a default in the making of or the
causing to be made any required distribution on the Certificates. Upon any such
waiver of a past default, such default shall be deemed to cease to exist, and
any Event of Default arising therefrom shall be deemed to have been timely
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived. The Trustee shall give notice of any such waiver to
the Rating Agencies.
Section 8.05. LIST OF CERTIFICATEHOLDERS. Upon written request of
three or more Certificateholders of record, for purposes of communicating with
other Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
ARTICLE IX
Concerning the Trustee
Section 9.01. DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement as duties of the
Trustee. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and subject to Section 8.02(b) use the same degree of care and skill
in their exercise, as a prudent person would exercise under the circumstances in
the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; PROVIDED, HOWEVER, that the Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer hereunder; PROVIDED, FURTHER, that the Trustee shall not be
responsible for the accuracy or verification of any calculation provided to it
pursuant to this Agreement.
(c) The Trustee shall make monthly distributions and the final
distribution to the Certificateholders as provided in Sections 6.01 and 10.01
herein.
(d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be liable in its individual capacity
for an error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund, if such action or non-action relates to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or other power
conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice,
the Trustee may conclusively assume there is no such default or Event
of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless
it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency. Notwithstanding the preceding sentence, the
Trustee shall not in any way be liable for any loss on any Permitted
Investment made by or on behalf of the Trustee; and
(vi) Anything in this Agreement to the contrary notwithstanding,
in no event shall the Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of
action.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Trustee and required to be deposited in
the Certificate Account and the Custody Account pursuant to this Agreement will
be promptly so deposited by the Trustee.
(f) Except for those actions that the Trustee is required to take
hereunder, the Trustee shall have no obligation or liability to take any action
or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, Officer's
Certificate, certificate of a Servicing Officer, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the 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 an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual
knowledge (which has not been cured or waived), to exercise such of
the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise, as a prudent person
would exercise under the circumstances in the conduct of his own
affairs;
(iv) The Trustee shall not be liable in its individual capacity
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing
to do so by Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust Fund and provided
that 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, reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement. The Trustee may require reasonable indemnity against
such expense or liability as a condition to taking any such action.
The reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
agents or attorneys; PROVIDED, HOWEVER, that the Trustee may not
appoint any agent to perform its custodial functions with respect to
the Mortgage Files other than the Custodian or paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consent will not be unreasonably withheld and provided
further that the Master Servicer hereby consents to the appointment of
Norwest Bank Minnesota, National Association to perform the custodial
functions provided for herein on behalf of the Trustee. The Trustee
shall not be liable or responsible for the misconduct or negligence of
any of the Trustee's agents or attorneys or a custodian or paying
agent appointed hereunder by the Trustee with due care and, when
required, with the consent of the Master Servicer;
(vii) Should the Trustee deem the nature of any action required
on its part, other than a payment or transfer under Subsection 4.02(b)
or Section 4.03, to be unclear, the Trustee may require prior to such
action that it be provided by the Master Servicer with reasonable
further instructions;
(viii) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(ix) The Trustee shall not be required to give any bond or surety
with respect to the execution of the trust created hereby or the
powers granted hereunder; and
(x) The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by BSMCC pursuant to this Agreement
and/or the Mortgage Loan Purchase Agreement or the eligibility of any
Mortgage Loan for purposes of this Agreement.
Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall have no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee of the obligation to cause the Custodian to review
the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature
and countersignature (or countersignature of its agent) on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. The Trustee
shall not be accountable for the use or application by the Seller of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Seller with respect to the Mortgage Loans.
Subject to the provisions of Section 2.05, the Trustee shall not be responsible
for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or
of any supplement hereto or instrument of further assurance, or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
hereunder or intended to be issued hereunder. The Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity
and enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. The Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
Section 9.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual capacity or in any capacity other than as Trustee hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not Trustee, and may otherwise deal with the parties hereto.
Section 9.05. TRUSTEE'S FEES AND EXPENSES. The Master Servicer
covenants and agrees to pay to the Trustee the Trustee's Fees as set forth in,
and in accordance with, such understanding as may be agreed to between such
parties. Such compensation obligation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust.
Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee and
any successor Trustee shall during the entire duration of this Agreement be a
state bank or trust company or a national banking association organized and
doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus and undivided profits of at least $40,000,000 or, in the
case of a successor Trustee, $50,000,000, subject to supervision or examination
by federal or state authority and, in the case of a successor Trustee other than
pursuant to Section 9.10, rated in one of the two highest long-term debt
categories of, or otherwise acceptable to, each of the Rating Agencies. The
Trustee shall not be an Affiliate of the Master Servicer, unless the Trustee
acts as successor Master Servicer hereunder. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07. INSURANCE. The Trustee, at its own expense, shall at all
times maintain and keep in full force and effect: (i) fidelity insurance, (ii)
theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers'
Blanket Bond"). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks which act as custodians for investor-owned mortgage pools. A
certificate of an officer of the Trustee as to the Trustee's compliance with
this Section 9.07 shall be furnished to the Master Servicer or any
Certificateholder upon reasonable written request.
Section 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE. (a) The Trustee
may at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Master Servicer shall
promptly appoint a successor Trustee by written instrument, in triplicate, one
copy of which instrument shall be delivered to each of the resigning Trustee and
the successor Trustee. If no successor Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Master Servicer or if at any time the Trustee
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Master Servicer shall be entitled to remove the Trustee and appoint a successor
Trustee by written instrument, in triplicate, one copy of which instrument shall
be delivered to each of the Trustee so removed and the successor Trustee.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee and appoint a successor Trustee by written instrument or
instruments, in quadruplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Master Servicer, the Trustee so removed and the successor so appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 9.09.
Section 9.09. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed
as provided in Section 9.08 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Trustee shall then
become effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor Trustee shall after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee all
assets and records of the Trust held by it hereunder, and the Master Servicer
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.09, the successor Trustee shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register and to the Rating Agencies. The Master Servicer
shall pay the cost of any mailing by the successor Trustee.
Section 9.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any state bank or
trust company or national banking association into which the Trustee may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any state
bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such state bank or trust company or
national banking association shall be eligible under the provisions of Section
9.06. Such succession shall be valid without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting 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 and the Master Servicer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 9.11, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable.
(b) If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a written request so to do, or in case
an Event of Default with respect to the Master Servicer shall have occurred and
be continuing, the Trustee shall have the power to make such appointment without
the Master Servicer.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust 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.
(e) 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 IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate 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.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Master Servicer and the Trustee acting jointly may at any time accept the
resignation of or remove any separate trustee or co-trustee, except that
following the occurrence of any Event of Default which has not been cured, the
Trustee acting alone may accept the resignation of or remove any separate
trustee or co-trustee.
Section 9.12. MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY
REQUIRED. The Master Servicer shall furnish to the Trustee, during the term of
this Agreement, such periodic, special, or other reports or information (and in
such electronic format or other means acceptable to the Trustee) as the Master
Servicer may have in its possession and as may reasonably be requested by the
Trustee in order to fulfill its duties and obligations under this Agreement.
Section 9.13. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS. (a) For federal income tax purposes, the taxable year of
each of REMIC shall be a calendar year and the Master Servicer shall maintain or
cause the maintenance of the books of each Series REMIC on the accrual method of
accounting.
(b) The Master Servicer shall prepare and the Trustee will file or
cause to be filed with the Internal Revenue Service Federal tax information
returns with respect to each Series REMIC, the Trust Fund, if applicable, and
the Certificates containing such information and at the times and in the manner
as may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year for
which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby. In connection with the
foregoing, the Master Servicer shall provide the name and address of the person
who can be contacted to obtain information required to be reported to the
holders of regular interests in each Series REMIC (the "REMIC Reporting Agent")
as required by IRS Form 8811. The Trustee shall make the elections to treat each
Series REMIC as a REMIC (which election shall apply to the taxable period ending
December 31, 1998 and each calendar year thereafter) in such manner as the Code
or applicable Treasury regulations may prescribe. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may
be required by the Code, and in doing so shall rely entirely upon, and shall
have no liability for information provided by, or calculations provided by, the
Seller or the Master Servicer. The Holder of the Class R-1 Certificate is hereby
designated as the "Tax Matters Person" (within the meaning of Treas. Reg. xx.xx.
1.860F-4(d)) for REMIC I, the Holder of the Class R-2 Certificate is hereby
designated as "Tax Matters Person" for REMIC II, the Holder of the Class R-3
Certificate is hereby designated as "Tax Matters Person" for REMIC III and the
Holder of the Class R-4 Certificate is hereby designated as "Tax Matters Person"
for REMIC IV. The Master Servicer is hereby designated and appointed as the
agent of each such Tax Matters Person. Any Holder of a Residual Certificate will
by acceptance thereof appoint the Master Servicer as agent and attorney-in-fact
for the purpose of acting as Tax Matters Person for each Series REMIC during
such time as the Master Servicer does not own any such Residual Certificate. In
the event that the Code or applicable Treasury regulations prohibit the Trustee
from signing tax or information returns or other statements, or the Master
Servicer from acting as Tax Matters Person (as an agent or otherwise), the
Trustee shall take whatever action that in its sole good faith judgment is
necessary for the proper filing of such information returns or for the provision
of a tax matters person, including designation of the Holder of a Residual
Certificate to sign such returns or act as tax matters person. Each Holder of a
Residual Certificate shall be bound by this Section.
(c) The Master Servicer shall provide upon request and receipt of
reasonable compensation, such information as required in Section 860D(a)(6)(B)
of the Code to the Internal Revenue Service, to any Person purporting to
transfer a Residual Certificate to a Person other than a transferee permitted by
Section 5.05(b), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described in
Section 1381 of the Code, or nominee holding an interest in a pass-through
entity described in Section 860E(e)(6) of the Code, any record holder of which
is not a transferee permitted by Section 5.05(b) (or which is deemed by statute
to be an entity with a disqualified member).
(d) The Master Servicer shall prepare and the Trustee shall file or
cause to be filed any state income tax returns required under Applicable State
Law with respect to each Series REMIC or the Trust Fund.
ARTICLE X
Termination
Xxxxxxx 00.00. XXXXXXXXXXX XXXX XXXXXXXXXX BY THE SELLER OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS. (a) Subject to Section 10.02, the
respective obligations and responsibilities of the Seller, the Master Servicer,
the Custodian and the Trustee created hereby, other than the obligation of the
Trustee or the Master Servicer to make payments to Certificateholders as
hereinafter set forth and to the Trustee, shall terminate upon:
(i) the repurchase by or at the direction of the Seller or its
designee (or if the Seller or its designee do not exercise such
option, the Master Servicer) of all Mortgage Loans in a Mortgage Loan
Group and all REO Property remaining in the Trust relating to such
Mortgage Loan Group at a price equal to (a) 100% of the Outstanding
Principal Balance of each Mortgage Loan in such Mortgage Loan Group
(other than a Mortgage Loan related to REO Property) as of the date of
repurchase, net of the principal portion of any unreimbursed Monthly
Advances made by the purchaser, together with interest at the
applicable Mortgage Interest Rate accrued but unpaid through and
including the last day of the month of repurchase, plus (b) the
appraised value of any REO Property, less the good faith estimate of
the Seller of liquidation expenses to be incurred in connection with
its disposal thereof (but not more than the Outstanding Principal
Balance of the related Mortgage Loan, together with interest at the
applicable Mortgage Interest Rate accrued on that balance but unpaid
through and including the last day of the month of repurchase), such
appraisal to be calculated by an appraiser mutually agreed upon by the
Seller and the Trustee at the expense of the Seller; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund or the disposition of all property
acquired with respect to any Mortgage Loan; PROVIDED, HOWEVER, that in
the event that an advance has been made, but not yet recovered, at the
time of such termination, the Person having made such advance shall be
entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was
made.
(b) In no event, however, 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 of this Agreement.
(c) [Intentionally omitted.]
(d) The right of the Seller or its designee or the Master Servicer, as
the case may be, to repurchase all Mortgage Loans in a Mortgage Loan Group
pursuant to Subsection 10.01(a)(i) above shall be exercisable only if (i) in the
case of the Seller or the Master Servicer, the aggregate unpaid principal
balance of the Mortgage Loans in such Mortgage Loan Group at the time of any
such repurchase is less than 5% of the portion of the Cut-off Date Balance (or,
with respect to the Master Servicer, 1% of the portion of the Cut-off Date
Balance) allocable to such Mortgage Loan Group or (ii) in the case of the
Seller, the Seller, based upon an Opinion of Counsel, has determined that the
REMIC status of any Series REMIC has been lost or that a substantial risk exists
that such REMIC status will be lost for the then-current taxable year. At any
time thereafter, in the case of (i) above, the Seller or the Master Servicer, as
the case may be, and in the case of (ii) above, the Seller may elect to
terminate the related Series REMIC at any time, and upon such election, the
Seller or its designee or the Master Servicer, as the case may be, shall
repurchase all the Mortgage Loans of the related Mortgage Loan Group.
(e) [Intentionally omitted].
(f) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Rating Agencies, upon which the
Certificateholders shall surrender their Certificates to the Trustee for payment
of the final distribution and cancellation. Such notice shall be given by
letter, mailed not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified.
(g) If the option of the Seller or the Master Servicer, as the case
may be, to repurchase or cause the repurchase of all Mortgage Loans in a
Mortgage Loan Group under Subsection 10.01(a)(i) above is exercised, the Seller
and/or its designee or the Master Servicer, as the case may be, shall deliver to
the Trustee for deposit in the Certificate Account, by the Business Day prior to
the applicable Distribution Date, an amount equal to the repurchase price for
the Mortgage Loans being purchased by it and all property acquired with respect
to such Mortgage Loans remaining in the applicable Series REMIC. Upon the
presentation and surrender of the Certificates, the Trustee shall distribute an
amount equal to (i) the amount otherwise distributable to the Certificateholders
(other than the holder of the Class of Residual Certificate corresponding to
such Mortgage Loan Group) on such Distribution Date but for such repurchase,
(ii) the Current Principal Amount and any accrued but unpaid interest at the
Pass-Through Rate to the Certificateholders of each Class, and (iii) the
remainder to the Class R-1 Certificateholder. If the relevant Group Available
Funds are not sufficient to pay all of the related Certificates in full, any
such deficiency will be allocated to the outstanding Class or Classes of
Subordinate Certificates in the related Certificate Group having the highest
numerical designation or if after the applicable Cross-Over Date to the Senior
Certificates of the related Certificate Group pro rata. Upon deposit of the
required repurchase price and following such final Distribution Date, the
Trustee shall cause the Custodian to release promptly to the Seller and/or its
designee or the Master Servicer, as the case may be, the Mortgage Files for the
remaining Mortgage Loans, and the Accounts shall terminate, subject to the
Trustee's obligation to hold any amounts payable to Certificateholders in trust
without interest pending final distributions pursuant to Subsection 10.01(i).
(h) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
each Sub-Servicer shall deliver to the Trustee for deposit in the appropriate
subaccount of the Certificate Account all distributable amounts remaining in
their Protected Accounts. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the Certificateholders, in
accordance with their respective interests, all distributable amounts remaining
in the Certificate Account. Upon deposit by any Sub-Servicers of such
distributable amounts and delivery to the Trustee of an Officer's Certificate
from the Master Servicer certifying that such deposit has been made, and
following such final Distribution Date, the Trustee shall cause the Custodian to
release promptly to the Seller or its designee or the Master Servicer, as the
case may be, the Mortgage Files for the remaining Mortgage Loans, and the
Accounts shall terminate, subject to the Trustee's obligation to hold any
amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to Subsection 10.01(i).
(i) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option
of the Seller or the Master Servicer to repurchase all the Mortgage Loans in a
Mortgage Loan Group under Subsection 10.01(a)(i) above is exercised, the
corresponding Series REMIC shall be terminated in accordance with the following
additional requirements, unless the Trustee has been furnished with an Opinion
of Counsel to the effect that the failure of the Trust to comply with the
requirements of this Section 10.02 will not (i) result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the Code on any
Series REMIC or (ii) cause any Series REMIC to fail to qualify as a REMIC at any
time that any Regular Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at the
written direction of the Seller, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete
liquidation of any of the Series REMICs provided to it by the Seller
meeting the requirements of a "Qualified Liquidation" under Section
860F of the Code and any regulations thereunder.
(ii) at or after the time of adoption of such a plan of complete
liquidation of any of the Series REMICs and at or prior to the final
Distribution Date, the Trustee shall sell for cash all of the assets
of the Trust to or at the direction of the Seller; and
(iii) at the time of the making of the final payment on any such
Group of Certificates, the Trustee shall distribute or credit from the
Certificate Account (or cause to be distributed or credited) (i) to
the Certificateholders, other than the Holder of the corresponding
Residual Certificates, the Current Principal Amount of the
Certificates plus 30 days' interest thereon at the applicable
Pass-Through Rate, and (ii) to the corresponding Residual
Certificateholder, all cash on hand from the Certificate Account
relating to the Mortgage Loan Group (other than cash retained to meet
claims); and the corresponding Series REMIC shall terminate at such
time.
(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
relevant Series REMIC upon the written request of the Seller and to take such
action in connection therewith as may be reasonably requested by the Seller and
(ii) appoint the Seller as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Trustee shall adopt such plan of liquidation by filing the appropriate statement
on the final tax return of such Series REMIC.
(c) At such time as each of REMIC II, REMIC III and REMIC IV are
terminated either by a complete liquidation or upon final distribution of all of
the assets of REMIC II, REMIC III and REMIC IV is made, REMIC I shall terminate.
ARTICLE XI
Miscellaneous Provisions
Section 11.01. INTENT OF PARTIES. The parties intend that each of the
Series REMICs shall be treated as a REMIC for federal income tax purposes and
that the provisions of this Agreement should be construed in furtherance of this
intent.
Section 11.02. AMENDMENT. (a) This Agreement may be amended from time
to time by the Seller, the Trustee and the Master Servicer, without notice to or
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, to comply with any changes in the Code or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Independent Counsel, adversely affect in any material respect the interests of
any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Seller, the Trustee and the Master Servicer, with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund or of the applicable Class or Classes if such amendment
affects only such Class or Classes for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; 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) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause any of the Series
REMICs to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel which shall be provided to the
Trustee other than at the Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to Section 11.02(b), Certificates registered in the name of or held for
the benefit of the Seller, the Master Servicer, a Sub-Servicer or the Trustee or
any Affiliate thereof shall be entitled to vote their Undivided Fractional
Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
Section 11.03. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Master
Servicer shall effect such recordation, at the expense of the Trust upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04. LIMITATION ON RIGHTS OF Certificateholders. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Master Servicer or any successor to any such parties unless (i) such
Certificateholder previously shall have given to the Trustee a written notice of
a continuing default, as herein provided, (ii) the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund 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 and expenses and liabilities to be incurred therein or thereby, and (iii)
the Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding.
(d) No one or more Certificateholders shall have any right by virtue
of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05. ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the Master Servicer nor any successor to any such parties
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued upon
the registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Seller, the Master Servicer, the Custodian or any successor to any
such party in reliance thereon, whether or not notation of such action is made
upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Seller, the Master Servicer or any
Sub-Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which the Trustee knows
to be so owned shall be so disregarded. Certificates which have been pledged in
good faith to the Trustee, the Seller, the Master Servicer or any Sub-Servicer
or any Affiliate thereof may be regarded as outstanding if the pledgor
establishes to the satisfaction of the Trustee the pledgor's right to act with
respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Seller, the Master Servicer or any Sub-Servicer, as the case may
be.
Section 11.06. [Reserved]
Section 11.07. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.08. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at or mailed by registered
mail, return receipt requested, postage prepaid, or by recognized overnight
courier, to (i) in the case of the Seller, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Vice President-Servicing (but with respect to monthly reports
sent pursuant to Section 6.07(b), Attention: Xxxx Xxx), or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Master Servicer, 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: Master Servicing Department (BSMSI 1998-1) or such other
address as may hereafter be furnished to the other parties in writing; (iii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; or (iv) in
the case of the Rating Agencies, Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Department and Standard &
Poor's Rating Services, a Division of the XxXxxx-Xxxx Companies, Inc., 00
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Residential Mortgage
Surveillance, Xxxxxxxxx Xxxxxx. Any notice delivered to the Seller, the Master
Servicer or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 11.09. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.10. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
Section 11.11. ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.13 NOTICE TO RATING AGENCIES. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custody Account or the
Certificate Account.
In addition, in accordance with Section 6.06 and Section 3.16, the
Trustee and the Master Servicer, respectively, shall promptly furnish to each
Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 6.06; and
2. Each annual independent public accountants' servicing report
received as described in Section 3.16.
IN WITNESS WHEREOF, the Seller, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
BEAR XXXXXXX MORTGAGE SECURITIES INC.,
as Seller
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Master Servicer and
Custodian
By: /s/ XXXXX X. XXXXXXXXX
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Vice President
Accepted and Agreed as to
Sections 2.02, 2.03A and 2.04
BEAR XXXXXXX MORTGAGE CAPITAL
CORPORATION
By: /s/ XXXXXX XXXXXXXXX
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of February, 1998 before me, a notary public in and
for said State, personally appeared Xxxx X. Xxxxxxxx, known to me to be a Vice
President of Bear Xxxxxxx Mortgage Securities Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of February, 1998 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxxxxx, known to me to be a
Director and Authorized Officer of Bear Xxxxxxx Mortgage Capital Corporation,
the corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of February, 1998 before me, a notary public in and
for said State, personally appeared ____________, known to me to be a
_______________ of Norwest Bank Minnesota, National Association, the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of February, 1998 before me, a notary public in and
for said State, personally appeared ____________, known to me who, being by me
duly sworn, did depose and say that ______________; that he/she is ____________
of The Chase Manhattan Bank, one of the parties that executed the foregoing
instrument; that he/she knows the seal of said Bank; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said Bank; and that he/she signed his/her name thereto by
order of the Board of Directors of said Bank.
---------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF FACE OF CERTIFICATES
EXHIBIT A-2
FORM OF REVERSE OF CERTIFICATES
EXHIBIT B-1
MORTGAGE LOAN SCHEDULE
INTENTIONALLY OMITTED
SEE EXHIBIT 3 TO MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT B-2
GROUP 1 MORTGAGE LOAN SCHEDULE
INTENTIONALLY OMITTED
SEE EXHIBIT 3 TO MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT B-3
GROUP 2 MORTGAGE LOAN SCHEDULE
INTENTIONALLY OMITTED
SEE EXHIBIT 3 TO MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT B-4
GROUP 3 MORTGAGE LOAN SCHEDULE
INTENTIONALLY OMITTED
SEE EXHIBIT 3 TO MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF BSMCC
CONCERNING THE MORTGAGE LOANS
(a) The information set forth in the Mortgage Loan Schedule is true,
complete and correct in all material respects as of the Cut-Off Date;
(b) [Reserved]
(c) The Mortgage Loan has not been delinquent thirty (30) days or more
on more than one occasion during the 12 months preceding the Cut-Off Date. As of
the Closing Date, the Mortgage Loan is not delinquent in payment more than 30
days and has not been dishonored; there are no defaults under the terms of the
Mortgage Loan; and BSMCC has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan;
(d) There are no delinquent taxes, assessments or other outstanding
charges and with respect to Cooperative Loans, no maintenance charges, affecting
the related Mortgaged Property;
(e) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage Note or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(f) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, except with respect to
certain releases in part that do not materially affect the value of the
Mortgaged Property, nor has any instrument been executed that would effect any
such satisfaction, release, cancellation, subordination or rescission;
(g) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage were not subject to an assignment or pledge,
and BSMCC had good and marketable title to and was the sole owner thereof and
had full right to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(h) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event, which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither BSMCC nor any prior mortgagee has waived any default,
breach, violation or event permitting acceleration;
(i) There are no mechanics, or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;
(j) All improvements subject to the Mortgage lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) except for DE MINIMUS
encroachments permitted by the FNMA Guide (MBS Special Servicing Option) and
which has been noted on the appraisal, and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by a title insurance policy and all improvements on the property comply
with all applicable zoning and subdivision laws and ordinances;
(k) The Mortgaged Property (and in the case of a Cooperative Loan, the
Cooperative Unit related thereto) at origination of the Mortgage Loan was and
currently is free of damage and waste or any such damage and waste is adequately
covered by an insurance policy, and at origination of the Mortgage Loan there
was, and there currently is, no proceeding pending for the total or partial
condemnation thereof;
(l) No Mortgage Loan has a Loan-to-Value Ratio in excess of 95.00%.
The original Loan-to-Value Ratio of each Mortgage Loan either was not more than
95.00% or the excess over 80.00% is insured as to payments defaults by a Primary
Mortgage Insurance Policy issued by a primary mortgage insurer acceptable to
FNMA and Xxxxxxx Mac until the Loan-to-Value Ratio of such Mortgage Loan is
reduced to 80.00%;
(m) (i) With respect to each Mortgage Loan other than a Cooperative
Loan, the Mortgage creates a first lien or a first priority ownership interest
in an estate in fee simple in real property securing the related Mortgage Note,
free and clear of all adverse claims, liens and encumbrances having priority
over the first lien of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
Mortgage Loan, or (B) which do not adversely affect the appraised value of the
Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property; and
(ii) with respect to each Cooperative Loan, the Mortgage creates a first lien or
first priority interest on the property securing the related Mortgage Note, free
and clear of all adverse claims, liens and encumbrances having priority over the
first lien of the Mortgage, subject only to (1) the lien of the related
Cooperative housing corporation for unpaid assessments, (2) the related
Proprietary Lease being subordinated or otherwise subject to the mortgage on the
related Cooperative building, and (3) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the value or marketability
of the related Mortgaged Property;
(n) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by applicable law, and copies of which written instruments are included
in the Mortgage File. No other instrument of waiver, alteration or modification
has been executed, and no Mortgage has been released, in whole or in part, from
the terms thereof except in connection with an assumption agreement, which
assumption agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule;
(o) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer pursuant to standard hazard policies conforming to
the requirements of Section 3.10 of the Agreement. All such standard hazard
policies are in effect and on the date of origination contained a standard
mortgagee clause naming BSMCC and its successors in interest as loss payee and
such clause is still in effect and all premiums due thereon have been paid. If
the Mortgaged Property is located in an area identified by the Federal Emergency
Management Agency as having special flood hazards under the Flood Disaster
Protection Act of 1973, as amended, such Mortgaged Property is covered by flood
insurance in an amount not less than that set forth in Section 4.10. 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 the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(p) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects;
(q) The Mortgage is a valid, subsisting and enforceable (subject to
the exceptions set forth in clause (m) above) first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any other security interest or other interest or
right thereto. Such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only to
permitted encumbrances set forth in clause (m)(i) (1), (2) and (3) or (ii) (1),
(2) and (3) herein. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein;
(r) The Mortgage Note and the related Mortgage are original and
genuine (including in the case of a Cooperative Loan, the Cooperative Shares,
the Proprietary Lease and the Recognition Agreement) and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency and other laws of
general application affecting the rights of creditors, and BSMCC has taken all
action necessary to transfer such rights of enforceability to the Purchaser. All
parties to the Mortgage Note and the Mortgage had the legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage, and with respect to a Cooperative Loan, the related Proprietary Lease
and Recognition Agreement. The Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have been
complied with;
(s) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy of insurance, issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (m)(i)
(1), (2) and (3) or (ii)(1), (2) and (3) above) BSMCC, its successors and
assigns, as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan. BSMCC is the sole insured of such lender's title
insurance policy, 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 the Purchase Agreement and this Agreement and will
inure to the benefit of the Purchaser and its assigns without any further act.
No claims have been made under such lender's title insurance policy, and no
prior holder of the related Mortgage has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;
(t) The Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of BSMCC's underwriting standards in effect
at the time of originations of such Mortgage Loan; provided, that certain
Mortgage Loans may have characteristics outside of such underwriting guidelines
where compensating factors are present acceptable to the mortgage banking
industry. The Mortgage Notes and Mortgages are on uniform Xxxxxx Xxx/Xxxxxxx Mac
instruments or are on forms acceptable to Xxxxxx Mae or Xxxxxxx Mac. The
Mortgage Loan bears interest at a fixed rate as set forth in the Mortgage Loan
Schedule, and Monthly Payments under the Mortgage Note are due and payable on
the first day of each month. The Mortgage Loan contains the usual and
enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount if the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder. Each prepayment penalty feature, if any, relating to a Mortgage Loan
is enforceable in all respects in accordance with its terms, subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors;
(u) The related Mortgage contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. 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;
(v) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustees sale or attempted sale after
default by the Mortgagor;
(w) The Mortgage File contains an appraisal of the related Mortgaged
Property made and signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by the originator or Sub-Servicer
thereof. The appraisal is in a form generally acceptable to Xxxxxx Mae or
Xxxxxxx Mac;
(x) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;
(y) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(z) The Mortgage Loan does not contain "graduated payment" features or
"buydown" features;
(aa) Each Group 1 and Group 2 Mortgage Loan has an original term to
maturity of not more than thirty years and each Group 3 Mortgage Loan has an
original term to maturity of not more than 15 years, in each case, with interest
payable in arrears on the first day of each month. The Mortgage Loan does not
contain terms or provisions which would result in negative amortization;
(bb) Each of the Mortgaged Properties consists of a single parcel of
real property with single-family residence erected thereon, or a two-to
four-family dwelling, or an individual condominium unit in a condominium project
or an individual unit in a planned unit development. No Mortgaged Property
consists of a single parcel of real property with a cooperative housing
development erected thereon. Any condominium unit or planned unit development
either conforms with applicable Xxxxxx Mae or Xxxxxxx Mac requirements regarding
such dwellings or is covering by a waiver confirming that such condominium unit
or planned unit development is acceptable to Xxxxxx Mae or Xxxxxxx Mac or is
otherwise "warrantable" with respect thereto. No Mortgaged Property is a
townhouse, a mobile home or manufactured dwelling. To the best of BSMCC's
knowledge each Mortgaged Property is lawfully occupied under applicable law;
(cc) The Mortgage Loans were originated with full, alternative or
reduced documentation;
(dd) 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; and
(ee) BSMCC is either, and each Mortgage Loan was originated by, (i) a
savings and loan association, savings bank, commercial bank, credit union,
insurance company or similar institution which is supervised and examined by a
federal or State authority, (ii) a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Section 203 and 211 of the National
Housing Act or (iii) a mortgage banker or broker licensed or authorized to do
business in the jurisdiction in which the related Mortgaged Property is located,
applying the same standards and procedures used by the applicable seller in
originating Mortgage Loans directly;
(ff) With respect to each Cooperative Loan (i) there is no provision
in the Proprietary Lease which requires the Mortgagor to offer for sale the
shares owned by such Mortgagor first to the Cooperative for a price less than
the outstanding amount of the Cooperative Loan, (ii) there is no prohibition in
the Proprietary Lease against pledging such shares or assigning the Proprietary
Lease that has been violated in connection with the origination of the
Cooperative Loan, and (iii) the Recognition Agreement provided by the
Cooperative is substantially in the form of the "AZTECH" form of agreement or
includes provisions which are not materially less favorable to the lender than
those of such AZTECH form of agreement;
(gg) With respect to each Cooperative Loan, as of the closing of such
Cooperative Loan, BSMCC, obtained evidence that, if the Cooperative Building is
in a federally designated flood area, a flood insurance policy has been obtained
in an amount equal to at least that required by applicable law, which insurance
the Cooperative is obligated to maintain at the Cooperative's cost and expense;
(hh) With respect to each Cooperative Loan, as of the Closing Date,
such Cooperative Loan is secured by shares held by a "tenant-stockholder" of a
corporation that qualifies as a "cooperative housing corporation" as such terms
are defined in section 216 (b) (1) of the Internal Revenue Code of 1986, as
amended, and to the best of BSMCC's knowledge, no Cooperative is subject to
proceedings which would, if adversely determined, result in such Cooperative
losing its status as a "cooperative housing corporation" under Section 216 (b)
(1) of the Internal Revenue Code of 1986, as amended; and
(ii) With respect to each Cooperative Loan, the related Mortgage
creates a first-priority security interest in the stock in the Cooperative and
the Proprietary Lease of the related Cooperative Unit which were pledged to
secure such Cooperative Loan, and the Cooperative owns the Cooperative Building
as an estate in fee simple in real property or pursuant to a leasehold
acceptable to Xxxxxx Xxx.
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Norwest Bank Minnesota, National Association
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000
RE: Pooling and Servicing Agreement dated as of
February 1, 1998, among BSMSI, The Chase
Manhattan Bank and Norwest Bank Minnesota,
National Association as Custodian and Master Servicer
In connection with the administration of the Mortgage Loans held by
you, as Custodian, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
MORTGAGE LOAN NUMBER:
MORTGAGOR NAME, ADDRESS & ZIP CODE:
REASON FOR REQUESTING DOCUMENTS (check one):
______ 1. Mortgage Paid in Full and proceeds have been deposited into
the Custodial Account
______ 2. Foreclosure
______ 3. Substitution
______ 4. Other Liquidation
______ 5. Nonliquidation Reason: _____________________
By: ________________________
(authorized signer)
Issuer: ____________________
Address:_____________________
Date: ______________________
CUSTODIAN
Norwest Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature and date
below:
____________________________ ______________________________
Signature Date
Documents returned to Custodian:
____________________________ ______________________________
Custodian Date
Date: ______________________, 19__
________________________________________
[NAME OF MASTER SERVICER]
By:
Name:
Title:
EXHIBIT E
Affidavit pursuant to Section
860E(e)(4) of the Internal Revenue
Code of 1986, as amended, and for
other purposes
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of__________] [the United States], on behalf of
which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear Xxxxxxx Mortgage
Securities Inc. Mortgage Pass-Through Certificates, Series 1998-1, [Class R-1]
[Class R-2] [Class R-3] [Class R-4] Certificates (the "Residual Certificates")
for the account of a disqualified organization; (iii) it consents to any
amendment of the Pooling and Servicing Agreement that shall be deemed necessary
by Bear Xxxxxxx Mortgage Securities Inc. (upon advice of counsel) to constitute
a reasonable arrangement to ensure that the Residual Certificates will not be
owned directly or indirectly by a disqualified organization; and (iv) it will
not transfer such Residual Certificates unless (a) it has received from the
transferee an affidavit in substantially the same form as this affidavit
containing these same four representations and (b) as of the time of the
transfer, it does not have actual knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
taxable as such created or organized in or under the laws of the United States
or any political subdivision thereof or (iii) an estate that is subject to U.S.
federal income tax regardless of the source of its income, or (iv) a trust other
than a "foreign trust,' as defined in Section 7701(a)(31) of the Code.
4. That the Investor's taxpayer identification number is ___________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _____________, 19__.
[NAME OF INVESTOR]
By: _________________________________
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt
of distributions]
Address of Investor for receipt of tax
information:
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _______, 19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of _______, 19__.
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
The Chase Manhattan Bank
_________________________
_________________________
Bear Xxxxxxx Mortgage Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: BSMSI Series 1998-1 Mortgage Pass-Through Certificates
(the "Certificates"), including the Class B-4, Class B-5, Class
B-6, Class 2-B-4, Class 2-B-5, Class 2-B-6, Class 3-B-4, Class
3-B-5 AND CLASS 3-B-6 CERTIFICATES (THE "PRIVATELY OFFERED
CERTIFICATES")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are
not being registered under the Securities Act of 1933, as
amended (the "Act") or any applicable state securities or
"Blue Sky" laws, and are being sold to us in a transaction
that is exempt from the registration requirements of such
laws;
(ii) any information we desired concerning the Certificates,
including the Privately Offered Certificates, the trust in
which the Certificates represent the entire beneficial
ownership interest (the "Trust") or any other matter we
deemed relevant to our decision to purchase Privately
Offered Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment in
Privately Offered Certificates; we are an institutional
"accredited investor" as defined in Section 501(a) of
Regulation D promulgated under the Act and a sophisticated
institutional investor;
(iv) we are acquiring Privately Offered Certificates for our
own account, not as nominee for any other person, and not
with a present view to any distribution or other
disposition of the Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged,
hypothecated or in any way disposed of) unless
subsequently registered under the Act and any applicable
state securities or "Blue Sky" laws or an exemption from
the registration requirements of the Act and any
applicable state securities or "Blue Sky" laws is
available;
(vi) we agree that in the event that at some future time we
wish to dispose of or exchange any of the Privately
Offered Certificates (such disposition or exchange not
being currently foreseen or contemplated), we will not
transfer or exchange any of the Privately Offered
Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as
defined below), (2) if required by the Pooling and
Servicing Agreement (as defined below) a letter to
substantially the same effect as either this letter or, if
the Eligible Purchaser is a Qualified Institutional Buyer
as defined under Rule 144A of the Act, the Rule 144A and
Related Matters Certificate in the form attached to the
Pooling and Servicing Agreement (as defined below) (or
such other documentation as may be acceptable to the
Trustee) is executed promptly by the purchaser and
delivered to the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether
directly or through any agent acting on our behalf, are
limited only to Eligible Purchasers and are not made by
means of any form of general solicitation or general
advertising whatsoever; and
(B) if the Privately Offered Certificate is not
registered under the Act (as to which we acknowledge you
have no obligation), the Privately Offered Certificate is
sold in a transaction that does not require registration
under the Act and any applicable state securities or "blue
sky" laws and, if The Chase Manhattan Bank (the "Trustee")
so requests, a satisfactory Opinion of Counsel is
furnished to such effect, which Opinion of Counsel shall
be an expense of the transferor or the transferee;
(vii) we agree to be bound by all of the terms (including
those relating to restrictions on transfer) of the Pooling
and Servicing, pursuant to which the Trust was formed; we
have reviewed carefully and understand the terms of the
Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately Offered
Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended, and/or section
4975 of the Internal Revenue Code of 1986, as amended, or
(ii) are providing a representation to the effect that the
proposed transfer and/or holding of a Privately Offered
Certificate and the servicing, management and/or operation
of the Trust and its assets: (I) will not result in any
prohibited transaction which is not covered under an
individual or class prohibited transaction exemption,
including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or
PTE 96-23 and (II) will not give rise to any additional
fiduciary duties on the part of the Master Servicer or the
Trustee.
(ix) We understand that each of the Class X-0, X-0, Class
B-6, Class 2-B-4, Class 2-B-5, Class 2-B-6, Class 3-B-4,
Class 3-B-5 and 3-B-6 Certificates bears, and will
continue to bear, a legend to substantiate the following
effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS
INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(a)(1),
(2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE
TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH
OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER
AND/OR HOLDING OF A CERTIFICATE AND THE SERVICING,
MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS:
(I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00,
XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE
RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
EITHER MASTER SERVICER OR THE TRUSTEE," WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE
OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER
OF A PRIVATE CERTIFICATE.
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement dated as of February 1, 1998 among
Bear Xxxxxxx Mortgage Securities Inc., Norwest Bank Minnesota, National
Association and The Chase Manhattan Bank, as Trustee (the "Pooling and Servicing
Agreement").
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By: ___________________________
Authorized Officer)
[By: ___________________________
Attorney-in-fact]
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By: ___________________________
Authorized Officer)
[By: ___________________________
Attorney-in-fact]
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[Date]
[SELLER]
The Chase Manhattan Bank
_________________________
_________________________
Bear Xxxxxxx Mortgage Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: BSMSI Series 1998-1 Mortgage Pass-Through Certificates,
Class B-4, Class B-5, Class B-6, Class 2-B-4, Class 2-B-5, Class
2-B-6, Class 3-B-4, Class 3-B-5 and Class 3-B-6 CERTIFICATES (THE
"PRIVATELY OFFERED CERTIFICATES")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:
Date: _____________, 19__ (must be on or after the close of its most recent
fiscal year)
Amount: $_________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the following
entities:
(1) / / an insurance company as defined in Section 2(13) of the Act;
or (1)
(2) / / an investment compapny registered under the Investment
Company Act or any business development as defined in
Section 2(a)(48) of the Business Investment Act of 1958; or
(3) / / a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958; or
(4) / / a plan (i) established and maintained by a state, its
political subdivisions, or any agency or instrumentality of
a state or its political subdivisions, the laws of which
permit the purchase of securities of this type, for the
benefit of its employees and (ii) the governing investment
guidelines of which permit the purchase of securities of
this type; or
(5) / / a business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
or
(6) / / a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution), partnership,
Massachusetts or similar business trust, or an organization
described in Section 501(c)(3) of the Internal Revenue Code;
or
(7) / / a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of at
least $25 million as demonstrated in its latest annual
financial statements; or
(8) / / an investment adviser registered under the Investment
Advisers Act; or
b. / / greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. / / less than $10 million, and the undersigned is a
broker-dealer registered with the SEC and will only purchase
Rule 144A securities in transactions in which it acts as a
riskless principal (as defined in Rule 144A); or
d. / / less than $100 million, and the undersigned is an
investment company registered under the Investment Company Act
of 1940, which, together with one or more registered investment
companies having the same or an affiliated investment adviser,
owns at least $100 million of eligible securities; or
-----------------------
1 A purchase by an insurance company for one or more of its separate
accounts, as defined by Secton 2(a)(37) of the Investment Company Act
of 1940, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such
insurance company.
e. / / less than $100 million, and the undersigned is an entity,
all the equity owners of which are qualified institutional
buyers.
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) 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 in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.
The undersigned agrees that if at some future time it wishes to
dispose of or exchange any of the Privately Offered Certificates, it will not
transfer or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement dated as of February 1, 1998 among Bear Xxxxxxx Mortgage
Securities Inc., Norwest Bank Minnesota, National Association and The Chase
Manhattan Bank, as Trustee, pursuant to which the Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, and/or
section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) is
providing a representation to the effect that the proposed transfer and/or
holding of a Privately Offered Certificate and the servicing, management and/or
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, Prohibited Transaction
Exemption ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX 00-00 or PTE 96-23 and (II)
will not give rise to any additional fiduciary duties on the part of the Master
Servicer or the Trustee.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By: ----------------------------
(Authorized Officer)
[By: ---------------------------
Attorney-in-fact]
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By: ----------------------------
(Authorized Officer)
[By: ---------------------------
Attorney-in-fact]
EXHIBIT G
FORM OF INITIAL CERTIFICATION
[Seller]
[Master Servicer]
[Trustee]
Re: Pooling and Servicing Agreement dated as of February 1, 1998,
among Bear Xxxxxxx Mortgage Securities Inc., as seller, Norwest
Bank Minnesota, National Association and The Chase Manhattan
BANK, AS TRUSTEE MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
1998-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[ ]
By: -------------------------------
Name:
Title:
EXHIBIT H
FORM OF FINAL CERTIFICATION
Bear Xxxxxxx Mortgage Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Norwest Bank Minnesota, National Association
The Chase Manhattan Bank, as Trustee
Re: Pooling and Servicing Agreement dated as of February 1, 1998,
among Bear Xxxxxxx Mortgage Securities Inc., AS seller, Norwest
Bank Minnesota, National Association and The Chase Manhattan
BANK, AS TRUSTEE MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
1998-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has received the documents set forth in Section
2.01 and has determined that (i) all documents required to be included in the
Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[ ]
By: ------------------------------
Name:
Title:
EXHIBIT I
PLANNED BALANCES OF THE PAC CERTIFICATES
EXHIBIT J
LIST OF BA MORTGAGE LOANS
FOR WHICH MORTGAGE NOTES ARE LOST
