Exhibit 4.1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
AMERIQUEST MORTGAGE COMPANY
Master Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
-----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1999
-----------------------------------------
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I
DEFINITIONS
1.01. Defined Terms..................................................................................4
Accrued Certificate Interest...................................................................4
Addition Notice................................................................................4
Adjustment Date................................................................................4
Affiliate......................................................................................4
Agreement......................................................................................5
Assignment.....................................................................................5
Available Distribution Amount..................................................................5
Bankruptcy Code................................................................................6
Bankruptcy Loss................................................................................6
Book-Entry Certificate.........................................................................6
Book-Entry Custodian...........................................................................6
Business Day...................................................................................6
Certificate....................................................................................6
Certificate Factor.............................................................................6
Certificateholder" or "Holder..................................................................6
Certificate Owner..............................................................................7
Certificate Principal Balance..................................................................7
Certificate Register" and "Certificate Registrar...............................................7
Class .......................................................................................7
Class A Certificate............................................................................7
Class A-1 Certificate..........................................................................7
Class A-2 Certificate..........................................................................7
Class A-1 Interest Distribution Amount.........................................................7
Class A-2 Interest Distribution Amount.........................................................7
Class A-1 Principal Distribution Amount........................................................8
Class A-2 Principal Distribution Amount........................................................8
Class CE Certificate...........................................................................8
Class Exemption................................................................................8
Class M-1 Certificate..........................................................................8
Class M-1 Principal Distribution Amount........................................................8
Class M-2 Certificate..........................................................................9
Class M-2 Principal Distribution Amount........................................................9
Class M-3 Certificate..........................................................................9
Class M-3 Principal Distribution Amount........................................................9
Class P Certificate............................................................................9
Class R-I Certificate..........................................................................9
Class R-II Certificate........................................................................10
SECTION PAGE
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Class R-III Certificates......................................................................10
Closing Date..................................................................................10
Code ......................................................................................10
Collection Account............................................................................10
Commission....................................................................................10
Corporate Trust Office........................................................................10
Corresponding Certificate.....................................................................10
Credit Enhancement Percentage.................................................................10
Cumulative Loss Percentage....................................................................11
Custodial Agreement...........................................................................11
Custodian.....................................................................................11
Cut-off Date..................................................................................11
DCR ......................................................................................11
Debt Service Reduction........................................................................11
Deficient Valuation...........................................................................11
Definitive Certificates.......................................................................11
Deleted Mortgage Loan.........................................................................11
Delinquency Percentage........................................................................11
Depositor.....................................................................................12
Depository....................................................................................12
Depository Institution........................................................................12
Depository Participant........................................................................12
Determination Date............................................................................12
Directly Operate..............................................................................12
Disqualified Organization.....................................................................12
Distribution Account..........................................................................13
Distribution Date.............................................................................13
Due Date......................................................................................13
Due Period....................................................................................13
Eligible Account..............................................................................13
ERISA ......................................................................................13
Estate in Real Property.......................................................................13
Excess Overcollateralized Amount..............................................................13
Expense Adjusted Mortgage Rate................................................................14
Extraordinary Trust Fund Expense..............................................................14
Xxxxxx Xxx....................................................................................14
FDIC ......................................................................................14
Final Recovery Determination..................................................................14
Xxxxxxx Mac...................................................................................14
Funding Period................................................................................14
Gross Margin..................................................................................14
Independent...................................................................................14
Independent Contractor........................................................................15
Index ......................................................................................15
SECTION PAGE
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Initial Mortgage Loan.........................................................................15
Insurance Proceeds............................................................................15
Interest Accrual Period.......................................................................15
Interest Carry Forward Amount.................................................................16
Interest Coverage Account.....................................................................16
Interest Coverage Amount......................................................................16
Interest Determination Date...................................................................16
Interest Distribution Amount..................................................................16
Interest Remittance Amount....................................................................16
Late Collections..............................................................................16
Liquidation Event.............................................................................16
Liquidation Proceeds..........................................................................17
Loan-to-Value Ratio...........................................................................17
London Business Day...........................................................................17
Majority Class CE Certificateholder...........................................................17
Master Servicer...............................................................................17
Master Servicer Event of Default..............................................................17
Master Servicer Prepayment Charge Payment Amount..............................................17
Master Servicer Remittance Date...............................................................17
Master Servicer Termination Test..............................................................17
Maximum I-LT7 Uncertificated Interest Deferral Amount.........................................17
Maximum Mortgage Rate.........................................................................18
Mezzanine Certificate.........................................................................18
Minimum Mortgage Rate.........................................................................18
Monthly Payment...............................................................................18
Xxxxx'x ......................................................................................18
Mortgage......................................................................................18
Mortgage File.................................................................................18
Mortgage Loan.................................................................................18
Mortgage Loan Purchase Agreement..............................................................18
Mortgage Loan Sale and Contribution Agreement.................................................18
Mortgage Loan Schedule........................................................................18
Mortgage Note.................................................................................20
Mortgage Pool.................................................................................20
Mortgage Rate.................................................................................20
Mortgaged Property............................................................................21
Mortgagor.....................................................................................21
Net Monthly Excess Cashflow...................................................................21
Net Mortgage Rate.............................................................................21
New Lease.....................................................................................21
Nonrecoverable P&I Advance....................................................................21
Non-United States Person......................................................................21
Notional Amount...............................................................................22
Officers' Certificate.........................................................................22
SECTION PAGE
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One-Month LIBOR...............................................................................22
One-Month LIBOR Pass-Through Rate.............................................................22
Opinion of Counsel............................................................................23
Original Pre-Funded Amount....................................................................23
Original Mortgage Loan........................................................................23
Originator....................................................................................23
Overcollateralized Amount.....................................................................23
Overcollateralization Deficiency Amount.......................................................24
Overcollateralization Increase Amount.........................................................24
Overcollateralization Reduction Amount........................................................24
Ownership Interest............................................................................24
Pass-Through Rate.............................................................................24
Percentage Interest...........................................................................25
Periodic Rate Cap.............................................................................26
Permitted Investments.........................................................................26
Permitted Transferee..........................................................................27
Person ......................................................................................27
P&I Advance...................................................................................27
Plan ......................................................................................27
Pre-Funding Account ..........................................................................27
Prepayment Assumption.........................................................................27
Prepayment Charge.............................................................................27
Prepayment Charge Schedule....................................................................27
Prepayment Interest Shortfall.................................................................28
Prepayment Period.............................................................................28
Principal Distribution Amount.................................................................28
Principal Prepayment..........................................................................29
PTCE ......................................................................................29
Purchase Price................................................................................29
Qualified Substitute Mortgage Loan............................................................30
Rating Agency or Rating Agencies..............................................................30
Realized Loss.................................................................................31
Record Date...................................................................................32
Reference Banks...............................................................................32
Refinanced Mortgage Loan......................................................................32
Regular Certificate...........................................................................32
Regular Interest..............................................................................32
Relief Act....................................................................................32
Relief Act Interest Shortfall.................................................................32
REMIC ......................................................................................32
REMIC I ......................................................................................32
REMIC I Interest Loss Allocation Amount.......................................................33
REMIC I Overcollateralized Amount.............................................................33
REMIC I Principal Loss Allocation Amount......................................................33
SECTION PAGE
REMIC I Regular Interest......................................................................33
REMIC I Regular Interest I-LT1................................................................33
REMIC I Regular Interest I-LT2................................................................34
REMIC I Regular Interest I-LT3................................................................34
REMIC I Regular Interest I-LT4................................................................34
REMIC I Regular Interest I-LT5................................................................34
REMIC I Regular Interest I-LT6................................................................34
REMIC I Regular Interest I-LT7................................................................34
REMIC I Regular Interest I-LTP................................................................35
REMIC I Remittance Rate.......................................................................35
REMIC I Required Overcollateralized Amount....................................................35
REMIC II......................................................................................35
REMIC II Regular Interest.....................................................................35
REMIC II Regular Interest II-LT1..............................................................35
REMIC II Regular Interest II-LT2..............................................................35
REMIC II Regular Interest II-LT3..............................................................36
REMIC II Regular Interest II-LT4..............................................................36
REMIC II Regular Interest II-LT5..............................................................36
REMIC II Regular Interest II-LT6..............................................................36
REMIC II Regular Interest II-LT7..............................................................36
REMIC II Regular Interest II-LTP..............................................................36
REMIC II Regular Interest II-LT2S.............................................................36
REMIC II Regular Interest II-LT3S.............................................................37
REMIC II Regular Interest II-LT4S.............................................................37
REMIC II Regular Interest II-LT5S.............................................................37
REMIC II Regular Interest II-LT6S.............................................................37
REMIC II Remittance Rate......................................................................37
REMIC III.....................................................................................37
REMIC III Certificate.........................................................................38
REMIC III Certificateholder...................................................................38
Remittance Report.............................................................................38
Rents from Real Property......................................................................38
REO Account...................................................................................38
REO Disposition...............................................................................38
REO Imputed Interest..........................................................................38
REO Principal Amortization....................................................................38
REO Property..................................................................................38
Request for Release...........................................................................39
Required Overcollateralized Amount............................................................39
Reserve Interest Rate.........................................................................39
Residential Dwelling..........................................................................39
Residual Certificate..........................................................................39
Residual Interest.............................................................................39
Responsible Officer...........................................................................39
SECTION PAGE
Scheduled Principal Balance...................................................................39
Seller ......................................................................................40
Servicing Account.............................................................................40
Servicing Advances............................................................................40
Servicing Fee.................................................................................40
Servicing Fee Rate............................................................................41
Servicing Officer.............................................................................41
Single Certificate............................................................................41
S&P ......................................................................................41
Startup Day...................................................................................41
Stated Principal Balance......................................................................41
Stayed Funds..................................................................................42
Stepdown Date.................................................................................42
Subsequent Cut-off Date.......................................................................42
Subsequent Mortgage Loan......................................................................42
Subsequent Mortgage Loan Purchase Agreement...................................................42
Subsequent Transfer Date......................................................................42
Subsequent Transfer Instrument................................................................42
Sub-Servicer..................................................................................43
Sub-Servicing Account.........................................................................43
Sub-Servicing Agreement.......................................................................43
Substitution Shortfall Amount.................................................................43
Tax Returns...................................................................................43
Telerate Page 3750............................................................................43
Termination Price.............................................................................43
Terminator....................................................................................43
Transfer......................................................................................43
Transferee....................................................................................43
Transferor....................................................................................43
Trigger Event.................................................................................43
Trust Fund....................................................................................43
Trustee ......................................................................................44
Trustee's Fee.................................................................................44
Trustee's Fee Rate............................................................................44
Uncertificated Balance........................................................................44
Uncertificated Corresponding Component........................................................44
Uncertificated Interest.......................................................................44
Uncertificated Notional Amount................................................................45
Uninsured Cause...............................................................................45
United States Person..........................................................................45
Value ......................................................................................45
Voting Rights.................................................................................46
1.02. Allocation of Certain Interest Shortfalls.....................................................46
SECTION PAGE
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans..................................................................48
2.02. Acceptance of REMIC I by the Trustee..........................................................50
2.03. Repurchase or Substitution of Mortgage Loans by the Originator, the Seller
or the Depositor; Payment of Prepayment Charges in the event of breach........................51
2.04. Representations and Warranties of the Depositor...............................................55
2.05. Representations, Warranties and Covenants of the Master Servicer..............................57
2.06. Issuance of Class R-I Certificates............................................................59
2.07. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by
the Trustee...................................................................................60
2.08. Issuance of Class R-II Certificates...........................................................60
2.09. Conveyance of REMIC II Regular Interests; Acceptance of REMIC III
by the Trustee................................................................................60
2.10. Issuance of REMIC III Certificates............................................................60
2.11. Conveyance of the Subsequent Mortgage Loans...................................................60
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
3.01. Master Servicer to Act as Master Servicer.....................................................64
3.02. Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................65
3.03. Successor Sub-Servicers.......................................................................66
3.04. Liability of the Master Servicer..............................................................67
3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders............................................................................67
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee..............................67
3.07. Collection of Certain Mortgage Loan Payments..................................................68
3.08. Sub-Servicing Accounts........................................................................68
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................69
3.10. Collection Account and Distribution Account...................................................70
3.11. Withdrawals from the Collection Account and Distribution Account..............................72
3.12. Investment of Funds in the Pre-Funding Account, the Interest
Coverage Account, Collection Account and the Distribution Account.............................74
3.13. [intentionally omitted].......................................................................75
3.14. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.............................................................................75
3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................77
3.16. Realization Upon Defaulted Mortgage Loans.....................................................77
SECTION PAGE
3.17. Trustee to Cooperate; Release of Mortgage Files...............................................79
3.18. Servicing Compensation........................................................................80
3.19. Reports to the Trustee; Collection Account Statements.........................................81
3.20. Statement as to Compliance....................................................................81
3.21. Independent Public Accountants' Servicing Report..............................................82
3.22. Access to Certain Documentation...............................................................82
3.23. Title, Management and Disposition of REO Property.............................................83
3.24. Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls...........................................................................86
3.25. Obligations of the Master Servicer in Respect of Mortgage Rates
and Monthly Payments..........................................................................86
3.26. Advance Facility..............................................................................86
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
4.01. Distributions.................................................................................87
4.02. Statements to Certificateholders..............................................................93
4.03. Remittance Reports; P&I Advances..............................................................97
4.04. Allocation of Realized Losses.................................................................99
4.05. Compliance with Withholding Requirements.....................................................101
4.06. Commission Reporting.........................................................................101
4.07. Pre-Funding Account..........................................................................101
4.08. Interest Coverage Account....................................................................103
ARTICLE V
THE CERTIFICATES
5.01. The Certificates.............................................................................105
5.02. Registration of Transfer and Exchange of Certificates........................................107
5.03. Mutilated, Destroyed, Lost or Stolen Certificates............................................112
5.04. Persons Deemed Owners........................................................................112
5.05. Certain Available Information................................................................112
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.01. Liability of the Depositor and the Master Servicer...........................................114
6.02. Merger or Consolidation of the Depositor or the Master Servicer..............................114
6.03. Limitation on Liability of the Depositor, the Master Servicer and Others.....................114
6.04. Limitation on Resignation of the Master Servicer.............................................115
SECTION PAGE
6.05. Rights of the Depositor in Respect of the Master Servicer....................................116
ARTICLE VII
DEFAULT
7.01. Master Servicer Events of Default............................................................117
7.02. Trustee to Act; Appointment of Successor.....................................................119
7.03. Notification to Certificateholders...........................................................121
7.04. Waiver of Master Servicer Events of Default..................................................121
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee............................................................................122
8.02. Certain Matters Affecting the Trustee........................................................123
8.03. Trustee Not Liable for Certificates or Mortgage Loans........................................124
8.04. Trustee May Own Certificates.................................................................124
8.05. Trustee's Fees and Expenses..................................................................124
8.06. Eligibility Requirements for Trustee.........................................................125
8.07. Resignation and Removal of the Trustee.......................................................125
8.08. Successor Trustee............................................................................126
8.09. Merger or Consolidation of Trustee...........................................................127
8.10. Appointment of Co-Trustee or Separate Trustee................................................127
8.11. Appointment of Custodians....................................................................128
8.12. Appointment of Office or Agency..............................................................128
8.13. Representations and Warranties of the Trustee................................................128
ARTICLE IX
TERMINATION
9.01 Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................130
9.02 Additional Termination Requirements..........................................................132
ARTICLE X
REMIC PROVISIONS
10.01. REMIC Administration.........................................................................133
10.02. Prohibited Transactions and Activities.......................................................135
10.03. Master Servicer and Trustee Indemnification..................................................136
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment....................................................................................137
11.02. Recordation of Agreement; Counterparts.......................................................138
11.03. Limitation on Rights of Certificateholders...................................................138
11.04. Governing Law................................................................................139
11.05. Notices......................................................................................139
11.06. Severability of Provisions...................................................................140
11.07. Notice to Rating Agencies....................................................................140
11.08. Article and Section References...............................................................141
11.09. Grant of Security Interest...................................................................141
Exhibits
--------
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class M-1 Certificate
Exhibit A-4 Form of Class M-2 Certificate
Exhibit A-5 Form of Class M-3 Certificate
Exhibit A-6 Form of Class CE Certificate
Exhibit A-7 Form of Class P Certificate
Exhibit A-8 Form of Class R-I Certificate
Exhibit A-9 Form of Class R-II Certificate
Exhibit A-10 Form of Class R-III Certificate
Exhibit B [Reserved]
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Final Certification
Exhibit D-1 Form of Mortgage Loan Sale and Contribution Agreement
Exhibit D-2 Form of Mortgage Loan Purchase Agreement
Exhibit E-1 Request for Release
Exhibit E-2 Request for Release Mortgage Loans paid in full
Exhibit F-1 Form of Transferor Representation Letter and Form of Transferee
Representation Letter in Connection with Transfer of Class CE and Class P
Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2 Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
in Connection with Transfer of Residual Certificates
Exhibit G Form of Certification with respect to ERISA and the Code
Exhibit H Form of Custodial Agreement
Exhibit I Subsequent Transfer Instrument
Exhibit J Addition Notice
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
This Pooling and Servicing Agreement, is dated and effective
as of November 1, 1999, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. as
Depositor, AMERIQUEST MORTGAGE COMPANY, as Master Servicer and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
each REMIC (as defined herein) created hereunder. The Trust Fund will consist of
a segregated pool of assets comprising of the Mortgage Loans, the Pre-Funding
Account and the Interest Coverage Account and certain other related assets
subject to this Agreement.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than the Master Servicer Prepayment Charge Payment Amount,
the Pre-Funding Account and the Interest Coverage Account) subject to this
Agreement as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC I." The Class R-I Certificates will be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the REMIC I Remittance Rate, the initial Uncertificated Balance
and, solely for purposes of satisfying Treasury regulation Section 1.860G-
1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests (as defined herein). None of the REMIC I Regular Interests
will be certificated.
REMIC I Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ------------------
I-LT1 Variable(2) $783,999,902.19 November 15, 0000
X-XX0 Variable(2) $6,240,000.00 November 15, 0000
X-XX0 Variable(2) $600,000.00 November 15, 0000
X-XX0 Variable(2) $520,000.00 November 15, 0000
X-XX0 Variable(2) $276,000.00 November 15, 0000
X-XX0 Variable(2) $236,000.00 November 15, 0000
X-XX0 Variable(2) $8,127,998.00 November 15, 0000
X-XXX (3) $100.00 November 15, 2029
-----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
(3) The REMIC I Regular Interest I-LTP will not accrue interest.
-2-
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Certificates will evidence the sole
class of "residual interests" in REMIC II for purposes of the REMIC
Provisions. The following table irrevocably sets forth the designation, the
REMIC II Remittance Rate, the initial Uncertificated Balance and, solely for
purposes of satisfying Treasury regulation Section 1.860G- 1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC II Regular Interests. None
of the REMIC II Regular Interests will be certificated.
REMIC II Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ----------------
II-LT1 Variable(2) $783,999,902.19 November 15, 2029
II-LT2 Variable(2) $6,240,000.00 November 15, 2029
II-LT3 Variable(2) $600,000.00 November 15, 2029
II-LT4 Variable(2) $520,000.00 November 15, 2029
II-LT5 Variable(2) $276,000.00 November 15, 2029
II-LT6 7.000% $236,000.00 November 15, 2029
II-LT7 Variable(2) $8,127,998.00 November 15, 2029
II-LTP (3) $100.00 November 15, 2029
II-LT2S Variable(2) (4) November 15, 2029
II-LT3S Variable(2) (4) November 15, 2029
II-LT4S Variable(2) (4) November 15, 2029
II-LT5S Variable(2) (4) November 15, 2029
II-LT6S Variable(2) (4) November 15, 2029
-----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC II Regular Interest.
(2) Calculated in accordance with the definition of "REMIC II Remittance Rate"
herein.
(3) The REMIC II Regular Interest II-LTP will not accrue interest.
(4) This REMIC II Regular Interest has no Uncertificated Balance but will
accrue interest at the related REMIC II Remittance Rate on the related
Uncertificated Notional Amount, which is equal to the Uncertificated
Balance of the Uncertificated Corresponding Component.
-3-
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III." The Class R-III Certificates will evidence the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, the Pass- Through Rate, the initial aggregate Certificate
Principal Balance and, solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for the
indicated Classes of Certificates.
Initial Aggregate Latest Possible
Designation Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----------- ----------------- ----------------------------- ----------------
Class A-1 Variable(2) $624,000,000.00 November 15, 2029
Class A-2 Variable(2) $60,000,000.00 November 15, 2029
Class M-1 Variable(2) $52,000,000.00 November 15, 2029
Class M-2 Variable(2) $27,600,000.00 November 15, 2029
Class M-3 7.000% $23,600,000.00 November 15, 2029
Class CE Variable(2) $12,799,900.00(3) November 15, 2029
Class P (4) $ 100.00 November 15, 2029
-----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loans with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class CE Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE Certificates
outstanding from time to time which shall equal the Uncertificated Balance
of REMIC II Regular Interests (other than the Uncertificated Balance of the
REMIC II Regular Interest II-LTP). The Class CE Certificates will not
accrue interest on their Certificate Principal Balance.
(4) The Class P Certificates will not accrue interest.
As of the Cut-off Date, the Initial Mortgage Loans had an
aggregate Scheduled Principal Balance equal to $624,321,286.61. The amount
deposited by the Depositor in the Pre- Funding Account on the Closing Date is
$175,678,713.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
-4-
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates and the Mezzanine
Certificates will be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Accrual Period. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate or Class CE Certificate, shall be reduced by an amount
equal to the portion allocable to such Certificate pursuant to Section 1.02
hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if any,
for such Distribution Date to the extent not covered by payments pursuant to
Section 3.24 and (b) the aggregate amount of any Relief Act Interest Shortfall,
if any, for such Distribution Date. In addition, Accrued Certificate Interest
with respect to each Distribution Date, as to any Class CE Certificate, shall be
reduced by an amount equal to the portion allocable to such Class CE Certificate
of Realized Losses, if any, pursuant to Section 4.04 hereof.
"Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.11, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form of Exhibit J.
"Adjustment Date": With respect to each Mortgage Loan, the
first day of the month in which the Mortgage Rate of a Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Mortgage Loan is set forth in the Mortgage Loan
Schedule.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
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voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee's name), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect of record the sale of the Mortgage.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Master Servicer for such Distribution Date pursuant to
Section 4.03, (e) the aggregate of any advances made by the Trustee for such
Distribution Date pursuant to Section 7.02(b), (f) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre-Funding Account after giving effect to any purchase of
Subsequent Mortgage Loans and (g) with respect to each Distribution Date during
the Funding Period and on the Distribution Date immediately following the end of
the Funding Period, any amounts withdrawn by the Trustee from the Interest
Coverage Account for distribution on the Certificates, reduced (to not less than
zero) by (2) the sum of (x) the portion of the amount described in clause (1)(a)
above that represents (i) Monthly Payments on the Mortgage Loans received from a
Mortgagor on or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Originator or any Sub-Servicer pursuant to Section
3.11 or Section 3.12 or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the Distribution
Account pursuant to Section 8.05, (vii) amounts deposited in the Collection
Account or the Distribution Account in error and (viii) the amount of any
Prepayment Charges collected by the Master Servicer in connection with the
voluntary Principal Prepayment in full of any of the Mortgage Loans (or any
Master Servicer Prepayment Charge Payment Amount) and (y) amounts reimbursable
to the Trustee for an advance made pursuant to Section 7.02(b) which advance the
Trustee has determined to be nonrecoverable from the Stayed Funds in respect of
which it was made.
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"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Class A Certificates and the Mezzanine Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of Maryland or the State of New York, or in the city in
which the Corporate Trust Office of the Trustee is located, are authorized or
obligated by law or executive order to be closed.
"Certificate": Any one of the Depositor's Floating Rate
Mortgage Pass-Through Certificates, Series 1999-AQ2, Class X-0, Xxxxx X-0, Class
M-1, Class M-2, Class M-3, Class CE, Class P, Class R-I, Class R-II or Class
R-III, issued under this Agreement.
"Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (and in the case of the Class CE Certificates, the Notional
Amount) of such Class of Certificates on such Distribution Date (after giving
effect to any distributions of principal and allocations of Realized Losses in
reduction of the Certificate Principal Balance (and in the case of the Class CE
Certificates, the Notional Amount) of such Class of Certificates to be made on
such Distribution Date), and the denominator of which is the initial aggregate
Certificate Principal Balance (and in the case of the Class CE Certificates, the
Notional Amount) of such Class of Certificates as of the Closing Date.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
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"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a
Depository Participant acts as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus all
distributions allocable to principal made thereon and Realized Losses allocated
thereto on such immediately prior Distribution Date (or, in the case of any date
of determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC II Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificate": Any Class A-1 Certificate or Class A-2
Certificate, and taken together, the "Class A Certificates."
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1 and
evidencing a Regular Interest in REMIC III for purposes of the
REMIC Provisions.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC III for purposes of the
REMIC Provisions.
"Class A-1 Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A-1 Certificates and (ii) the
Interest Carry Forward Amount with respect to the Class A-1
Certificates.
"Class A-2 Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A-2 Certificates and (ii) the
Interest Carry Forward Amount with respect to the Class A-2
Certificates.
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"Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 56.00% and (ii) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $6,000,000.
"Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class A-2 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
71.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$6,000,000.
"Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC III for purposes of the
REMIC Provisions.
"Class Exemption": A class exemption granted by the DOL, which
provides relief from certain of the prohibited transaction provisions of ERISA
and the related excise tax provisions of the Code.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class A-2 Certificates (after taking into
account the payment of the Class A-2 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 84.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $6,000,000.
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"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class A-2 Certificates (after taking into
account the payment of the Class A-2 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.90% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $6,000,000.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account the payment of
the Class A-1 Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class A-2 Certificates (after taking into
account the payment of the Class A-2 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date) and (v)
the Certificate Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
96.80% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$6,000,000.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
"Class R-I Certificate": Any one of the Class R-I Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form
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annexed hereto as Exhibit A-8 and evidencing the Residual Interest in REMIC I
for purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Class R-II
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-9
and evidencing the Residual Interest in REMIC II for purposes of the
REMIC Provisions.
"Class R-III Certificates": Any one of the Class R-III
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-10
and evidencing the Residual Interest in REMIC III for purposes of
the REMIC Provisions.
"Closing Date": November 10, 1999.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Norwest Bank
Minnesota, National Association, as Trustee, in trust for the registered holders
of Salomon Brothers Mortgage Securities VII, Inc., Floating Rate Mortgage Pass-
Through Certificates, Series 1999-AQ2" The Collection Account must be an
Eligible Account.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor and the Master Servicer.
"Corresponding Certificate": With respect to REMIC I Regular
Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest I-LT4,
REMIC I Regular Interest I-LT5, REMIC I Regular Interest I-LT6 and REMIC I
Regular Interest I-LTP, the Class A-1 Certificates, Class A-2 Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates and Class
P Certificates, respectively. With respect to REMIC II Regular Interest II-LT2,
REMIC II Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
Regular Interest II-LT5, REMIC II Regular Interest II-LT6 and REMIC II Regular
Interest II-LTP, the Class A-1 Certificates, Class A-2 Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates and Class P
Certificates, respectively.
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Class A-2 Certificates, the
Mezzanine Certificates and the Class CE Certificates, and
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the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans, calculated after taking into account distributions of principal
on the Mortgage Loans and distribution of the Principal Distribution Amount to
the Certificates then entitled to distributions of principal on
such Distribution Date.
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the sum of
the aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount.
"Custodial Agreement": An agreement that may be entered into
among the Depositor, the Master Servicer, the Trustee and a Custodian in the
form of Exhibit H annexed hereto or an agreement assigned to the Trustee with
respect to the Mortgage Loans.
"Custodian": A Custodian, which shall not be the Depositor,
the Master Servicer, the Seller or any affiliate of any of them, appointed
pursuant to a Custodial Agreement.
"Cut-off Date": With respect to each Initial Mortgage Loan,
November 1, 1999. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"DCR": Duff & Xxxxxx Credit Rating Co., or its successor in
interest.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the
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Mortgage Loans and REO Properties as of the last day of the previous calendar
month; provided, however, that any Mortgage Loan purchased by the Master
Servicer pursuant to Section 3.16(c) shall not be included in either the
numerator or the denominator for purposes of calculating the
Delinquency Percentage.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated D-1+ by DCR (if rated by DCR), P-1 by Xxxxx'x and A-1 by S&P (or
comparable ratings if DCR, Xxxxx'x and S&P are not the Rating Agencies).
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the first day of the calendar month in which such Distribution Date occurs or,
if such first day is not a Business Day, the Business Day immediately preceding
such first day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Xxxxxxx Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or
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instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, (v) an "electing large partnership" and (vi) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the holding of
an Ownership Interest in a Residual Certificate by such Person may cause any of
REMIC I, REMIC II or REMIC III or any Person having an Ownership Interest in any
Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Norwest Bank Minnesota, National Association, as Trustee, in trust for
the registered holders of Salomon Brothers Mortgage Securities VII, Inc.,
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2." The
Distribution Account must be an Eligible Account.
"Distribution Date": The 15th day of any month, or if such
15th day is not a Business Day, the Business Day immediately following such 15th
day, commencing in December 1999.
"Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution Date occurs and ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated "AAA" or "D-1+", as applicable, by
DCR, P-1 by Xxxxx'x and A-1+ by S&P (or comparable ratings if
DCR,
Xxxxx'x and S&P are not the Rating Agencies) at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC or (iii) a trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity. Eligible Accounts
may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized
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Amount for such Distribution Date over (ii) the Required Overcollateralized
Amount for such Distribution Date.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the sum of
(i) the Trustee's Fee Rate and (ii) the Servicing Fee Rate.
"Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii) and
any amounts payable by the Trustee for the recording of the assignments of
mortgage pursuant to Section 2.01.
"Xxxxxx Xxx": Xxxxxx Xxx, formally known as the Federal
National Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Seller, the Depositor, the Majority Class CE
Certificateholder or the Master Servicer pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01), a determination made by the
Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Master Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
"Xxxxxxx Mac": Xxxxxxx Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Funding Period": The period beginning on the Closing Date and
ending on the earlier of the date on which (a) the amount on deposit in the
Pre-Funding Account is reduced to zero or (b) 2:00 p.m., New York City time, on
January 7, 2000.
"Gross Margin": With respect to each Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Rate for such Mortgage
Loan.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Originator and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Originator, the Master Servicer or any Affiliate thereof, and (c)
is not connected with the Depositor, the Originator, the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar
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functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Originator, the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any
Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Index": With respect to each Mortgage Loan and each related
Adjustment Date, the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available as of the first business day 45 days or
more prior to such Adjustment Date, as specified in the related Mortgage Note.
"Initial Mortgage Loan": Any of the Mortgage Loans included in
REMIC I as of the Closing Date.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, subject to the terms and conditions of the related Mortgage Note and
Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificates (other than the
Class M-3 Certifiates), REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular Interest
II-LT5, REMIC II Regular Interest II-LT2S, REMIC II Regular Interest II-LT3S,
REMIC II Regular Interest II-LT4S and REMIC II Regular Interest II-LT5S, the
period commencing on the Distribution Date of the month immediately preceding
the month in which such Distribution Date occurs (or, in the case of the first
Distribution Date, commencing on the Closing Date) and ending on the day
preceding such Distribution Date. With respect to any Distribution Date and the
Class M-3 Certificates, REMIC II Regular Interest II-LT1, REMIC II Regular
Interest II-LT6, REMIC II Regular Interest II-LT6S, REMIC II Regular Interest
II-LT7 and the REMIC I Regular
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Interests, the one-month period ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and any Class of Class A Certificates or Mezzanine
Certificates, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class of Certificates as of the immediately
preceding Distribution Date exceeded (b) the actual amount distributed on such
Class of Certificates in respect of interest on such immediately preceding
Distribution Date and (ii) the amount of any Interest Carry Forward Amount for
such Class of Certificates remaining unpaid from the previous Distribution Date,
plus accrued interest on such sum calculated at the related Pass-Through Rate
for the most recently ended Interest Accrual Period.
"Interest Coverage Account": The account established and
maintained pursuant to Section 4.08, as defined therein.
"Interest Coverage Amount": The amount to be paid by the
Depositor to the Trustee for deposit into the Interest Coverage Account on the
Closing Date pursuant to Section 4.08, which amount is $2,518,024.95.
"Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates (other than the Class M-3
Certificates), REMIC II Regular Interest II-LT2, REMIC II Regular Interest
II-LT2S, REMIC II Regular Interest II-LT3, REMIC II Regular Interest II-LT3S,
REMIC II Regular Interest II-LT4, REMIC II Regular Interest II-LT4S, REMIC II
Regular Interest II-LT5 and REMIC II Regular Interest II-LT5S, and any Interest
Accrual Period therefor, the second London Business Day preceding the
commencement of such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificate, any Mezzanine Certificate and any
Class CE Certificate, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.
"Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Distribution Amount for such Distribution
Date allocable to interest.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
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Section 9.01. With respect to any REO Property, either of the following events:
(i) a Final Recovery Determination is made as to such REO Property; or (ii) such
REO Property is removed from REMIC I by reason of its being purchased pursuant
to Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of
London are open and conducting transactions in United States dollars.
"Majority Class CE Certificateholder": Any single Holder or
group of Holders of Class CE Certificates representing a greater than 50%
Percentage Interest in such Class.
"Master Servicer": Ameriquest Mortgage Company ("Ameriquest")
or any successor master servicer appointed as herein provided, in its capacity
as Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events
described in Section 7.01.
"Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.05 or Section 3.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 8th day of the calendar month
in which such Distribution Date occurs or, if such 8th day is not a Business
Day, the Business Day immediately preceding such 8th day; provided, however,
that if such immediately preceding Business Day is the Determination Date, the
Master Servicer Remittance Date shall be the next succeeding Business Day.
"Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.00%.
"Maximum I-LT7 Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LT7 for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LT7 minus the REMIC I Overcollateralized Amount, in each
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case for such Distribution Date, over (ii) Uncertificated Interest on REMIC II
Regular Interest II- LT2, REMIC II Regular Interest II-LT3, REMIC II Regular
Interest II-LT4, REMIC II Regular Interest II-LT5 and REMIC II Regular Interest
II-LT6 for such Distribution Date.
"Maximum Mortgage Rate": With respect to each Mortgage Loan,
the percentage set forth in the related Mortgage Note as the maximum Mortgage
Rate thereunder.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate or Class M-3 Certificate.
"Minimum Mortgage Rate": With respect to each Mortgage Loan,
the percentage set forth in the related Mortgage Note as the minimum Mortgage
Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
held from time to time held as a part of REMIC I, the Mortgage Loans so held
being identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the
Originator, the Seller and the Depositor, regarding the transfer of the Mortgage
Loans by the Seller to or at the direction of the Depositor, substantially in
the form of Exhibit D-2 annexed hereto.
"Mortgage Loan Sale and Contribution Agreement": The agreement
between the Seller and the Originator, regarding the transfer of the Mortgage
Loans by the Originator to or at the direction of the Seller, substantially in
the form of Exhibit D-1 annexed hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, attached hereto as Schedule 1 as
supplemented by each schedule of
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Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument. The
Mortgage Loan Schedule shall set forth the following information with respect to
each Mortgage Loan:
(i) the Originator's Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the Loan-to-Value Ratio at origination;
(viii) the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan);
(ix) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(x) the stated maturity date;
(xi) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan);
(xii) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xiii) the original principal amount of the Mortgage Loan;
(xiv) the Scheduled Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date (or Subsequent
Cut-off Date, with respect to a Subsequent Mortgage Loan);
(xv) the Gross Margin;
(xvi) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xvii) the Maximum Mortgage Rate;
(xviii) the Minimum Mortgage Rate;
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(xix) the Mortgage Rate at origination;
(xx) the Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment;
(xxi) a code indicating the documentation program (I.E., Full
Documentation, Fast Trac or Stated Income);
(xxii) the first Adjustment Date immediately following the Cut-off
Date (or Subsequent Cut-off Date, with respect to a Subsequent
Mortgage Loan);
(xxiii) the risk grade;
(xxiv) the Value of the Mortgaged Property; and
(xxv) the sale price of the Mortgaged Property, if applicable.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan): (1) the number of Mortgage Loans; (2) the current principal balance of
the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Depositor in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage
Rate in effect immediately following the Cut-off Date (or Subsequent Cut-off
Date, with respect to a Subsequent Mortgage Loan) and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in
the Mortgage Note, of the Index, as most recently available as of a date prior
to the Adjustment Date as set forth in the related Mortgage Note, plus the
related Gross Margin; provided that the Mortgage Rate on such Mortgage Loan on
any Adjustment Date shall never be more than the lesser of (i) the sum of the
Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related
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Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate, and shall
never be less than the greater of (i) the Mortgage Rate in effect immediately
prior to the Adjustment Date less the Periodic Rate Cap, if any, and (ii) the
related Minimum Mortgage Rate. With respect to each Mortgage Loan that becomes
an REO Property, as of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date such Mortgage
Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Interest Distribution Amount payable to the holders of the Class A
Certificates and the Mezzanine Certificates and (B) the sum of the amounts
described in clauses (b)(i) through (iii) of the definition of Principal
Distribution Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net WAC Pass-Through Rate": With respect to REMIC II Regular
Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest
II-LT4, REMIC II Regular Interest II-LT5, the Class A Certificates and the
Mezzanine Certificates (other than the Class M-3 Certificates) and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted based
on their Scheduled Principal Balances as of the first day of the calendar month
preceding the month in which the Distribution Date occurs multiplied by a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.
"Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan
or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
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"Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC II Regular
Interests (other than the Uncertificated Balance of REMIC II Regular Interest
II-LTP) for such Distribution Date.
"Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries. With
respect to the Seller, the Mortgage Loan Transferor and the Master Servicer, any
officer who is authorized to act for the Master Servicer in matters relating to
this Agreement, and whose action is binding upon the Master Servicer, initially
including those individuals whose names appear on the list of authorized
officers delivered at the closing.
"One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates (other than the Class M-3 Certificates), REMIC II
Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular
Interest II-LT4 and REMIC II Regular Interest II-LT5 and any Interest Accrual
Period therefor, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination Date; provided that if such rate does not
appear on Telerate Page 3750, the rate for such date will be determined on the
basis of the offered rates of the Reference Banks for one-month U.S. dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. In
such event, the Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Trustee shall select an alternative comparable index (over which the
Trustee has no control), used for determining one-month Eurodollar lending rates
that is calculated and published (or otherwise made available) by an independent
party.
"One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1 Certificates and REMIC II Regular Interest II-LT2 and any Distribution Date,
a per annum rate equal to One- Month LIBOR plus 0.42%, in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
remaining in the Trust Fund is reduced to less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount, or One-Month LIBOR plus 0.84%,
in the case of any Distribution Date thereafter.
With respect to the Class A-2 Certificates and REMIC II
Regular Interest II-LT3 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 0.58%, in the case of each
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Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
remaining in the Trust Fund is reduced to less than 10% of the sum of the
aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount, or One-Month LIBOR plus 0.87%,
in the case of any Distribution Date thereafter.
With respect to the Class M-1 Certificates and REMIC II
Regular Interest II-LT4 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 0.85%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount, or One-Month LIBOR plus 1.275%, in the case of any Distribution Date
thereafter.
With respect to the Class M-2 Certificates and REMIC II
Regular Interest II-LT5 and any Distribution Date, a per annum rate equal to
One-Month LIBOR plus 1.50%, in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans and REO Properties remaining in the Trust Fund is reduced
to less than 10% of the sum of the aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount, or One-Month LIBOR plus 2.25%, in the case of any Distribution Date
thereafter.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any of REMIC I, REMIC II or REMIC III as a REMIC or (b)
compliance with the REMIC Provisions must be an opinion of Independent counsel.
"Original Pre-Funded Amount": The amount deposited by the
Depositor in the Pre- Funding Account on the Closing Date, which amount is
$175,678,713.
"Original Mortgage Loan": Any of the Mortgage Loans included
in REMIC I as of the Closing Date.
"Originator": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.
"Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
over (b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates as of such
Distribution Date (after taking into account the payment of the amounts
described in clauses (b)(i) through (iv) of the definition of Principal
Distribution Amount on such Distribution Date).
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"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralized
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date prior to taking into account the
payment of any Overcollateralization Increase Amount on such Distribution Date.
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued Certificate Interest payable on the Class CE Certificates on such
Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.04.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the sum of the amounts available for
distribution specified in clauses (b)(i) through (iii) of the definition of
Principal Distribution Amount.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates (other than the Class M-3 Certificates) and any
Distribution Date, a rate per annum equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate for such Distribution Date and (ii) the Net
WAC Pass-Through Rate for such Distribution Date. With respect to the Class M-3
Certificates, for any Distribution Date, a fixed rate equal to 7.000% per annum.
With respect to the Class CE Certificates and any Distribution Date, a rate per
annum equal to the percentage equivalent of a fraction, the numerator of which
is the sum of the amounts calculated pursuant to clauses (i) through (vii)
below, and the denominator of which is the Uncertificated Balance of the REMIC
II Regular Interests (other than the Uncertificated Balance of REMIC II Regular
Interest II- LTP). For purposes of calculating the Pass-Through Rate for the
Class CE Certificates, the numerator is equal to the sum of the following
components:
(i) the REMIC II Remittance Rate for REMIC II Regular Interest
II-LT1 minus two (2) times the weighted average of the REMIC II
Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II Regular
Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II Regular
Interest II-LT5, REMIC II Regular Interest II-LT6 and REMIC II Regular
Interest II-LT7, with the rate on REMIC II Regular Interest II-LT7
equal to zero for the purpose of this calculation, applied to an amount
equal to the Uncertificated Balance of REMIC II Regular Interest
II-LT1;
(ii) the weighted average of the REMIC II Remittance Rates for
REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3,
REMIC II Regular Interest II- LT4, REMIC II Regular Interest II-LT5 and
REMIC II Regular Interest II-LT6 minus two (2)
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times the weighted average of the REMIC II Remittance Rates for REMIC
II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II-LT4, REMIC II Regular Interest II-LT5, REMIC II
Regular Interest II-LT6 and REMIC II Regular Interest II-LT7, with the
rate on REMIC II Regular Interest II-LT7 equal to zero for the purpose
of this calculation, applied to an amount equal to the sum of the
Uncertificated Balances of REMIC II Regular Interest II-LT2, REMIC II
Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
Regular Interest II-LT5 and REMIC II Regular Interest II-LT6;
(iii) the REMIC II Remittance Rate for REMIC II Regular
Interest II-LT7 minus two (2) times the weighted average of the REMIC
II Remittance Rates for REMIC II Regular Interest II-LT2, REMIC II
Regular Interest II-LT3, REMIC II Regular Interest II-LT4, REMIC II
Regular Interest II-LT5, REMIC II Regular Interest II-LT6 and REMIC II
Regular Interest II-LT7, with the rate on REMIC II Regular Interest
II-LT7 equal to zero for the purpose of this calculation, applied to an
amount equal to the Uncertificated Balance of REMIC II Regular Interest
II-LT7;
(iv) 100% of the interest on REMIC II Regular Interest
II-LT2S;
(v) 100% of the interest on REMIC II Regular Interest
II-LT3S;
(v) 100% of the interest on REMIC II Regular Interest
II-LT4S;
(vi) 100% of the interest on REMIC II Regular Interest
II-LT5S; and
(vii) 100% of the interest on REMIC II Regular Interest
II-LT6S.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof.
The Class P Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class CE Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of such Class of Certificates may
be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. With respect to any
Residual Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and multiples thereof.
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"Periodic Rate Cap": With respect to each Mortgage Loan and
any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage
Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) demand and time deposits in, certificates of
deposit of, or bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars and issued by, any Depository Institution;
(iii) repurchase obligations with respect to any
security described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the laws
of the United States of America or any state thereof and that are rated
by each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than 30
days after the date of acquisition thereof) that is rated by each
Rating Agency that rates such securities in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds, including money
market funds advised by the Trustee or an Affiliate thereof, that have
been rated "AAA" by DCR (if rated by DCR), "Aaa" by Xxxxx'x and "AAA"
by S&P; and
(viii) if previously confirmed in writing to the
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of the Class A
Certificates;
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provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure of deed in lieu of foreclosure as
determined pursuant to Section 4.03.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Xxxxx plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.
"Pre-Funding Account ": The account established and maintained
pursuant to Section 4.07 as defined therein.
"Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 28% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.
"Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge collected by the Master Servicer from
a Mortgagor in connection with any voluntary Principal Prepayment in full
pursuant to the terms of the related Mortgage Note as from time to time held as
a part of the Trust Fund, the Prepayment Charges so held being identified in the
Prepayment Charge Schedule (other than any Master Servicer Prepayment Charge
Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto) as
supplemented by each schedule of Subsequent Mortgage Loans
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which by their terms have related Prepayment Charges. The Prepayment Charge
Schedule shall set forth the following information with respect to each
Prepayment Charge:
(i) the Master Servicer's Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on the
related Mortgage Loan;
(iv) the term of the Prepayment Charge;
(v) the original principal balance of the related Mortgage Loan;
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan;
The Prepayment Charge Schedule shall be amended from time to
time by the Depositor in accordance with the provisions of this Agreement.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in full or in part that was applied by the
Master Servicer to reduce the outstanding principal balance of such loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the related Prepayment Period. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
"Principal Distribution Amount": With respect to any Distribution
Date, the lesser of:
(a) the excess of the Available Distribution Amount over the
amount payable on the Class A Certificates and the
Mezzanine Certificates pursuant to Section 4.01(a)(2); and
(b) the sum of:
(i) the principal portion of each Monthly Payment on the
Mortgage Loans due during the related Due Period, whether or
not received on or prior to the related
Determination Date;
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(ii) the Stated Principal Balance of any Mortgage Loan that
was purchased during the related Prepayment Period pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a
Deleted Mortgage Loan pursuant to Section 2.03 during the
related Prepayment Period;
(iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds and REO
Principal Amortization) received during the related Prepayment
Period, net of any portion thereof that represents a recovery
of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date, and with respect to the Distribution Date
immediately following the end of the Funding Period, any
amounts in the Pre-Funding Account after giving effect to the
purchase of any Subsequent Mortgage Loans;
(iv) the principal portion of any Realized Losses incurred on
the Mortgage Loans in the calendar month preceding such
Distribution Date; and
(v) the amount of any Overcollateralization Increase Amount
for such Distribution Date;
minus:
(vi) the amount of any Overcollateralization Reduction Amount
for such Distribution Date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest (without regard to
any prepayment charge that may have been collected by the Master Servicer in
connection with such payment of principal) representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"PTCE": A Prohibited Transaction Class Exemption.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable
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Net Mortgage Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
Master Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing Advances and
P&I Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or
REO Property, (iv) any amounts previously withdrawn from the Collection Account
in respect of such Mortgage Loan or REO Property pursuant to Sections 3.11(ix)
and 3.16(b), and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Master Servicer or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) have a Minimum Mortgage
Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v)
have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi)
have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan and
(xi) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the risk gradings described in clause (x) hereof shall be satisfied as to
each such mortgage loan, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining terms to maturity, the
Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xi) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
"Rating Agency or Rating Agencies": DCR, Xxxxx'x and S&P or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such
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nationally recognized statistical rating agencies, or other comparable Persons,
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Master Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which a
Final Recovery Determination has been made, an amount (not less than zero) equal
to (i) the unpaid principal balance of such Mortgage Loan as of the commencement
of the calendar month in which the Final Recovery Determination was made, plus
(ii) accrued interest from the Due Date as to which interest was last paid by
the Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii).
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all P&I Advances made by the Master Servicer in respect of
such REO Property or the related Mortgage Loan for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.23.
With respect to each Mortgage Loan which has become the subject of
a Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
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With respect to each Mortgage Loan which has become the subject of
a Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Class of
Certificates, including any Definitive Certificates, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.
"Reference Banks": Bankers Trust Company, Xxxxxxx'x Bank PLC, The
Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Depositor
or any Affiliate thereof and (iii) which have been designated as such by the
Trustee.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class P Certificate or Class CE Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account
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(other than any amounts representing any Master Servicer Prepayment Charge
Payment Amount), the Distribution Account (other than any amounts representing
any Master Servicer Prepayment Charge Payment Amount) and any REO Account and
such assets that are deposited therein from time to time and any investments
thereof, together with any and all income, proceeds and payments with respect
thereto. Notwithstanding the foregoing, however, REMIC I specifically excludes
the Pre-Funding Account, the Interest Coverage and all payments and other
collections of principal and interest due on the Mortgage Loans on or before the
Cut-off Date and all Prepayment Charges payable in connection with Principal
Prepayments made before the Cut-off Date.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT1 minus two (2) times the weighted average of the REMIC II Remittance Rates
for REMIC II Regular Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II
Regular Interest II- LT4, REMIC II Regular Interest II-LT5, REMIC II Regular
Interest II-LT6 and REMIC II Regular Interest II-LT7, with the rate on REMIC II
Regular Interest II-LT7 equal to zero for purposes of this calculation, divided
by (b) 12.
"REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular
Interest I-LT4, REMIC I Regular Interest I-LT5 and REMIC I Regular Interest
I-LT6, in each case as of such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Balances of REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular Interest I-LT5
and REMIC I Regular Interest I-LT6 and the denominator of which is the aggregate
of the Uncertificated Balances of REMIC I Regular Interest I-LT2, REMIC I
Regular Interest I-LT3, REMIC I Regular Interest I- LT4, REMIC I Regular
Interest I-LT5, REMIC I Regular Interest I-LT6 and REMIC I Regular Interest
I-LT7.
"REMIC I Regular Interest": Any of the seven separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
(other than REMIC I Regular Interest I-LTP, with respect to interest) shall
accrue interest at the related REMIC I Remittance Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I.
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REMIC I Regular Interest I-LT1 shall accrue interest at the related REMIC I
Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT6
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT7": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT7
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and
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conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall be entitled to any Prepayment Charges collected by the Master Servicer and
to a distribution of principal, subject to the terms and conditions hereof, in
an aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to each REMIC I Regular
Interest, the weighted average of the Expense Adjusted Mortgage Rates on the
then outstanding Mortgage Loans and REO Properties.
"REMIC I Required Overcollateralized Amount": 1% of the Required
Overcollateralization Amount.
"REMIC II": The segregated pool of assets consisting of all of the
REMIC I Regular Interests conveyed in trust to the Trustee for the benefit of
REMIC III, as holder of the REMIC II Regular Interests, and the Class R-II
Certificateholders pursuant to Section 2.07, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
"REMIC II Regular Interest": Any of the eleven separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
(other than REMIC II Regular Interest II-LTP, with respect to interest) shall
accrue interest at the related REMIC II Remittance Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC II Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC II Regular Interest II-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT1
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT2
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
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"REMIC II Regular Interest II-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT3
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT4
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT5
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT6": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT6
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT7": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT7
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC II Regular Interest II-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LTP
shall be entitled to any Prepayment Charges collected by the Master Servicer and
to a distribution of principal, subject to the terms and conditions hereof, in
an aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.
"REMIC II Regular Interest II-LT2S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC
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II. REMIC II Regular Interest II-LT2S shall accrue interest at the related REMIC
II Remittance Rate in effect from time to time on its related Uncertificated
Notional Amount.
"REMIC II Regular Interest II-LT3S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT3S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.
"REMIC II Regular Interest II-LT4S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT4S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.
"REMIC II Regular Interest II-LT5S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT5S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.
"REMIC II Regular Interest II-LT6S": One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest II-LT6S
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time on its related Uncertificated Notional Amount.
"REMIC II Remittance Rate": With respect to REMIC II Regular
Interest II-LT1 and REMIC II Regular Interest II-LT7, the weighted average of
the Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans and
REO Properties. With respect to REMIC II Regular Interest II-LT2, REMIC II
Regular Interest II-LT3, REMIC II Regular Interest II-LT4 and REMIC II Regular
Interest II-LT5, the lesser of (i) the related One-Month LIBOR Pass-Through Rate
(based on the actual number of days elapsed in the applicable Interest Accrual
Period and a 360-day year) and (ii) the Net WAC Pass-Through Rate, multiplied by
the actual number of days elapsed in the related Interest Accrual Period divided
by 360. With respect to REMIC II Regular Interest II-LT6, a fixed rate per annum
equal to the related REMIC II Remittance Rate as set forth in the Preliminary
Statement hereto. With respect to REMIC II Regular Interest II-LT2S, REMIC II
Regular Interest II-LT3S, REMIC II Regular Interest II-LT4S, REMIC II Regular
Interest II-LT5S and REMIC II Regular Interest II-LT6S, a rate per annum equal
to excess of the REMIC I Remittance Rate for the related Uncertificated
Corresponding Component over the REMIC II Remittance Rate for REMIC II Regular
Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest
II-LT4, REMIC II Regular Interest II-LT5 and REMIC II Regular Interest II-LT6,
respectively.
"REMIC III": The segregated pool of assets consisting of all of
the REMIC II Regular Interests conveyed in trust to the Trustee for the benefit
of the REMIC III Certificateholders pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
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"REMIC III Certificate": Any Regular Certificate or Class R-III
Certificate.
"REMIC III Certificateholder": The Holder of any REMIC III
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"Remittance Report": A report in form and substance that is
acceptable to the Trustee on a magnetic disk or tape prepared by the Master
Servicer pursuant to Section 4.03 with such additions, deletions and
modifications as agreed to by the Trustee and the Master Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any calendar
month during which such REO Property was at any time part of REMIC I, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property,
for any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without limitation, that
portion of the Termination Price paid in connection with a purchase of all of
the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable
to such REO Property) or otherwise, net of any portion of such amounts (i)
payable pursuant to Section 3.23(c) in respect of the proper operation,
management and maintenance of such REO Property or (ii) payable or reimbursable
to the Master Servicer pursuant to Section 3.23(d) for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
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"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E-1 or Exhibit E-2 attached hereto.
"Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $12,799,900, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
3.20% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) $6,000,000, and (iii) on or after the
Stepdown Date and a Trigger Event is in effect, the Required Overcollateralized
Amount for the immediately preceding Distribution Date.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) an attached
or detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a detached
one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (unless such mobile or manufactured
home is defined as real property under applicable state law).
"Residual Certificate": Any one of the Class R-I Certificates,
Class R-II Certificates or Class R-III Certificates.
"Residual Interest": The sole class of "residual interests" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
cashier, any trust officer or assistant trust officer, the Controller and any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and, with respect to a particular matter, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Scheduled Principal Balance": With respect to any Mortgage Loan:
(a) as of the Cutoff Date, (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan), the outstanding principal balance of such Mortgage
Loan as of such date, net of the principal portion of all unpaid Monthly
Payments, if any, due on or before such date; (b) as of any Due Date subsequent
to the Cut
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off Date (or Subsequent Cut-off Date, as applicable) up to and
including the Due Date in the calendar month in which a Liquidation Event occurs
with respect to such Mortgage Loan, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date (or Subsequent Cut-off Date, as
applicable), minus the sum of (i) the principal portion of each Monthly Payment
due on or before such Due Date but subsequent to the Cut-off Date (or Subsequent
Cut-off Date, as applicable), whether or not received, (ii) all Principal
Prepayments received before such Due Date but after the Cut-off Date (or
Subsequent Cut-off Date, as applicable), (iii) the principal portion of all
Liquidation Proceeds and Insurance Proceeds received before such Due Date but
after the Cut-off Date (or Subsequent Cut-off Date, as applicable), net of any
portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of such REO Property for all previously ended calendar months; and (b)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such REO Property, zero.
"Seller": Ameriquest Securities L.L.C., a Nevada limited liability
company, or its successor in interest, in its capacity as seller under the
Mortgage Loan Purchase Agreement.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.14, Section 3.16 and Section 3.23. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies
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a Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
applicable Servicing Fee Rate on the same principal amount on which interest on
such Mortgage Loan accrues for such calendar month. A portion of such Servicing
Fee may be retained by any Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum; provided however, in the
event that the weighted average of the Net Mortgage Rates on the Mortgage Loans
is less than 7.00%, the Servicing Fee Rate shall be reduced by the amount needed
to pay the Pass-Through Certificates on
the Class M-3 Certificates.
"Servicing Officer": Any employee of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans,
whose name and specimen signature appear on a list of Servicing Officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"Single Certificate": With respect to any Class of Certificates
(other than the Class P Certificates and the Residual Certificates), a
hypothetical Certificate of such Class evidencing a Percentage Interest for such
Class corresponding to an initial Certificate Principal Balance or Notional
Amount of $1,000. With respect to the Class P Certificates and the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 20%
Percentage Interest in such Class.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Startup Day": With respect to each of REMIC I, REMIC II and REMIC
III, the day designated as such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a)
as of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the Scheduled Principal Balance of such Mortgage Loan
as of the Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent
Mortgage Loan), as shown in the Mortgage Loan Schedule, minus the sum of (i) the
principal portion of each Monthly Payment due on a Due Date subsequent to the
Cut-off Date (or Subsequent Cut-off Date, as applicable), to the extent received
from the Mortgagor or advanced by the Master Servicer and distributed pursuant
to Section 4.01 on or before such date of determination, (ii) all Principal
Prepayments received after the Cut-off Date (or Subsequent Cut-off Date, as
applicable), to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16, to the extent distributed pursuant to
Section 4.01 on or before such date of determination and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but
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not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution Date in any calendar month, the principal portion of the Monthly
Payment due on the Due Date in the calendar month of acquisition, to the extent
advanced by the Master Servicer and distributed pursuant to Section 4.01 on or
before such date of determination, and (ii) the aggregate amount of REO
Principal Amortization in respect of such REO Property for all previously ended
calendar months, to the extent distributed pursuant to Section 4.01 on or before
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stayed Funds": If the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of a Remittance (as
defined in Section 7.02(b)) is prohibited by Section 362 of the federal
Bankruptcy Code, funds that are in the custody of the Master Servicer, a trustee
in bankruptcy or a federal bankruptcy court and should have been the subject of
such Remittance absent such prohibition.
"Stepdown Date": The later to occur of (i) the Distribution Date
occurring in December 2002 and (ii) the first Distribution Date on which the
Credit Enhancement Percentage (calculated for this purpose only after taking
into account distributions of principal on the Mortgage Loans but prior to any
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date) is equal to or
greater than 44.00%.
"Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the first day of the month in which the related Subsequent Transfer
Date occurs.
"Subsequent Mortgage Loan": A Mortgage Loan sold by the Depositor
to the Trust Fund pursuant to Section 2.11, such Mortgage Loan being identified
on the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.
"Subsequent Mortgage Loan Purchase Agreement": The agreement
between the Depositor and the Seller regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.
"Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.
"Subsequent Transfer Instrument": Each subsequent transfer
instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form of Exhibit I, by which Subsequent
Mortgage Loans are sold to the Trust Fund.
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"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Shortfall Amount": As defined in Section 2.03(d).
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on the
Dow Xxxxx Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 9.01.
"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds the lesser of (i) 40% of
the Credit Enhancement Percentage (calculated for this purpose only with the
aggregate Certificate Principal Balance of the Mezzanine Certificates and the
Class CE Certificates) or (ii) 11.60%.
"Trust Fund": Collectively, all of the assets of REMIC I, REMIC II
and REMIC III.
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"Trustee": Norwest Bank Minnesota, National Association, a
national banking association, or its successor in interest, or any successor
trustee appointed as herein provided.
"Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate Scheduled Principal Balance of the Mortgage
Loans and any REO Properties and any amount in the Pre-Funding Account as of the
second preceding Due Date (or, in the case of the initial Distribution Date, as
of the Cut-off Date).
"Trustee's Fee Rate": 0.0035% per annum.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Balance of each REMIC
I Regular Interest and each REMIC II Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial uncertificated balance.
On each Distribution Date, the Uncertificated Balance of each REMIC I Regular
Interest and each REMIC II Regular Interest shall be reduced by all
distributions of principal made on such REMIC I Regular Interest or such REMIC
II Regular Interest, as applicable, on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.04 and the Uncertificated Balances of the REMIC I Regular Interest
I-LT7 and REMIC II Regular Interest II-LT7 shall be increased by interest
deferrals as provided in Section 4.01(a)(1)(A)(i) and Section 4.01(a)(1)(B)(i),
respectively. The Uncertificated Balance of each REMIC I Regular Interest and
each REMIC II Regular Interest shall never be less than zero.
"Uncertificated Corresponding Component": With respect to: REMIC
II Regular Interest II-LT1, REMIC I Regular Interest I-LT1; REMIC II Regular
Interest II-LT2 and REMIC II Regular Interest II-LT2S, REMIC I Regular Interest
I-LT2; REMIC II Regular Interest II-LT3 and REMIC II Regular Interest II-LT3S,
REMIC I Regular Interest I-LT3, REMIC II Regular Interest II- LT4 and REMIC II
Regular Interest II-LT4S, REMIC I Regular Interest I-LT4; REMIC II Regular
Interest II-LT5 and REMIC II Regular Interest II-LT5S, REMIC I Regular Interest
I-LT5; REMIC II Regular Interest II-LT6 and REMIC II Regular Interest II-LT6S,
REMIC I Regular Interest I-LT6; REMIC II Regular Interest II-LT7, REMIC I
Regular Interest I-LT7; and REMIC II Regular Interest II-LTP, REMIC I Regular
Interest I-LTP.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. With respect to any REMIC II Regular Interest
for any Distribution Date, one month's interest at the REMIC II Remittance Rate
applicable to such REMIC II Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of any REMIC I Regular Interest (other
than REMIC I Regular Interest I-LTP), REMIC II Regular Interest II-LT1,
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REMIC II Regular Interest II-LT6, REMIC II Regular Interest II-LT7, REMIC II
Regular Interest II- LT2S, REMIC II Regular Interest II-LT3S, REMIC II Regular
Interest II-LT4S, REMIC II Regular Interest II-LT5S and REMIC II Regular
Interest II-LT6S shall accrue on the basis of a 360-day year consisting of
twelve 30-day months; Uncertificated Interest in respect of REMIC II Regular
Interest II-LT2, REMIC II Regular Interest II-LT3, REMIC II Regular Interest
II-LT4 and REMIC II Regular Interest II-LT5, shall accrue on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. Uncertificated Interest with respect to each Distribution Date, as to
any REMIC I Regular Interest or REMIC II Regular Interest, shall be reduced by
an amount equal to the sum of (a) the aggregate Prepayment Interest Shortfall,
if any, for such Distribution Date to the extent not covered by payments
pursuant to Section 3.24 and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any allocated, in each case, to such REMIC I Regular Interest or
REMIC II Regular Interest pursuant to Section 1.02. In addition, Uncertificated
Interest with respect to each Distribution Date, as to any REMIC I Regular
Interest or REMIC II Regular Interest, shall be reduced by Realized Losses, if
any, allocated to such REMIC I Regular Interest or REMIC II Regular Interest
pursuant to Section 1.02 and Section 4.04.
"Uncertificated Notional Amount": With respect to REMIC II Regular
Interest II-LT2S, REMIC II Regular Interest II-LT3S, REMIC II Regular Interest
II-LT4S, REMIC II Regular Interest II-LT5S and REMIC II Regular Interest
II-LT6S, the Uncertificated Balance of REMIC I Regular Interest I-LT2, REMIC I
Regular Interest I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular Interest
I-LT5 and REMIC I Regular Interest I-LT6, respectively.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code.
"Value": With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan,
provided, however, in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based
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solely upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of the Financial
Institutions Reform, Recovery and Enforcement Act
of 1989.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and 1/3 of 1% of all Voting
Rights will be allocated among the holders of each Class of Residual
Certificates. The Voting Rights allocated to each Class of Certificate shall be
allocated among Holders of each such Class in accordance with their respective
Percentage Interests as of the most recent Record Date.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate and (2) the aggregate amount of any Realized
Losses incurred for any Distribution Date shall be allocated among the Class CE
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated Interest
for the REMIC I Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT7 up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I- LT1, REMIC I
Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest
I-LT4, REMIC I Regular Interest I-LT5, REMIC I Regular Interest I-LT6 and REMIC
I Regular Interest I-LT7 PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Uncertificated Balance of each such REMIC I Regular Interest.
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All Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
on the REMIC II Regular Interests shall be allocated by the Trustee on each
Distribution Date among the REMIC II Regular Interests in the proportion that
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls are allocated
to the related Uncertificated Corresponding Component.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 17 thereof), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan
Purchase Agreement and the Mortgage Loan Sale and Contribution Agreement.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, or to one or more
Custodians as the agent or agents of the Trustee, the following documents or
instruments with respect to each Initial Mortgage Loan so transferred and
assigned and the Depositor shall, in accordance with Section 2.11, deliver or
cause to be delivered to the Trustee with respect to each Subsequent Mortgage
Loan, the following documents or instruments (a "Mortgage File"):
(i) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Norwest Bank Minnesota,
National Association, as Trustee under the applicable agreement,
without recourse," with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon,
and a copy, certified by the appropriate recording office, of the
recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon;
(iii) an original Assignment of the Mortgage in blank;
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee as
contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
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(vi) the original lender's title insurance policy, together with
all endorsements or riders which were issued with or subsequent to
the issuance of such policy, insuring the priority of the Mortgage
as a first lien on the Mortgaged Property represented therein as a
fee interest vested in the Mortgagor, or in the event such
original title policy is unavailable, a written commitment or
uniform binder or preliminary report of title issued by the title
insurance or escrow company.
The Master Servicer (in its capacity as Originator) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date (or Subsequent Transfer
Date,
with respect to the Subsequent Mortgage Loans), (ii) the date on which the
Originator receives the Assignment from the Custodian and (iii) the date of
receipt by the Master Servicer of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust Fund
or the Trustee, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and shall execute
each original Assignment in the following form: "Norwest Bank Minnesota,
National Association, as Trustee under the applicable agreement". In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Master Servicer (in its capacity as Originator) shall promptly
prepare or cause to be prepared a substitute Assignment or cure or cause to be
cured such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded. Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
assignments of Mortgage shall not be required to be completed and submitted for
recording with respect to any Mortgage Loan only if the Trustee and each Rating
Agency has received an opinion of counsel, satisfactory in form and substance to
the Trustee and each Rating Agency, to the effect that the recordation of such
assignments in any specific jurisdiction is not necessary to protect the
Trustee's interest in the related Mortgage Note; provided further, however,
notwithstanding the delivery of any opinion of counsel, each assignment of
Mortgage shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) failure of the Master Servicer Termination
Test, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Originator, (iv) the occurrence of a servicing transfer as described in
Section 7.02 hereof and (iv) if the Originator is not the Master Servicer and
with respect to any one assignment of Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments of Mortgage, such expense will be paid by the
Trustee.
If any of the documents referred to in Sections 2.01(ii), (iii) or
(iv) above has as of the Closing Date (or Subsequent Transfer Date, with respect
to the Subsequent Mortgage Loans) been submitted for recording but either (x)
has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee, or to the appropriate
Custodian on behalf of the Trustee, of a copy of each such document certified by
the Originator in the case of (x) above or the applicable public recording
office in the case of (y) above to be a true and complete copy of the original
that was submitted for
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recording and (2) if such copy is certified by the Originator, delivery to the
Trustee, or to the appropriate Custodian on behalf of the Trustee, promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy was not delivered
pursuant to Section 2.01(vi) above, the Depositor shall deliver or cause to be
delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, promptly after receipt thereof, the original lender's title insurance
policy. The Depositor shall deliver or cause to be delivered to the Trustee, or
to the appropriate Custodian on behalf of the Trustee, promptly upon receipt
thereof any other original documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on behalf of the Originator, the Seller,
the Depositor or the Master Servicer, as the case may be, in trust for the
benefit of the Trustee on behalf of the Certificateholders. In the event that
any such original document is required pursuant to the terms of this Section to
be a part of a Mortgage File, such document shall be delivered promptly to the
Trustee, or to the appropriate Custodian on behalf of the Trustee. Any such
original document delivered to or held by the Depositor that is not required
pursuant to the terms of this Section to be a part of a Mortgage File, shall be
delivered promptly to the Master Servicer.
SECTION 2.02. Acceptance of REMIC I by the Trustee.
Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all other assets included
in the definition of "REMIC I" under clauses (i), (iii), (iv) and (v) (to the
extent of amounts deposited into the Distribution Account) and declares that it,
or such Custodian as its agent, holds and will hold such documents and the other
documents delivered to it constituting the Mortgage File, and that it holds or
will hold all such assets and such other assets included in the definition of
"REMIC I" in trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause a Custodian on its behalf to review) each Mortgage File on or
before the Closing Date (or Subsequent Transfer Date, with respect to the
Subsequent Mortgage Loans) and to certify in substantially the form attached
hereto as Exhibit C-1 (or cause the Custodian to certify in the form of the
Initial Certification attached to the Custodial Agreement) that, as to each
Initial Mortgage Loan or Subsequent Mortgage Loan, as the case may be, listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been
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reviewed by it or such Custodian and are not mutilated, torn or defaced unless
initialed by the related borrower and relate to such Mortgage Loan, (iii) based
on its or the Custodian's examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii), (vi), (ix), (x), (xiii), (xv) and (xvii) through (xx) of the
definition of "Mortgage Loan Schedule" accurately reflects information set forth
in the Mortgage File. It is herein acknowledged that, in conducting such review,
the Trustee or such Custodian was under no duty or obligation (i) to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.
Prior to the first anniversary date of this Agreement the Trustee
shall deliver to the Depositor and the Master Servicer a final certification in
the form annexed hereto as Exhibit C-2 (or shall cause the Custodian to deliver
to the Trustee, the Depositor and the Master Servicer a final certification in
the form attached to the Custodial Agreement) evidencing the completeness of the
Mortgage Files, with any applicable exceptions noted thereon, with respect to
all of the Initial Mortgage Loans and the Subsequent Mortgage Loans.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
or any Custodian finds any document or documents constituting a part of a
Mortgage File to be missing or defective in any material respect, at the
conclusion of its review the Trustee (or a Custodian on behalf of the Trustee)
shall so notify the Depositor and the Master Servicer. In addition, upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Originator or the Seller
in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
The Trustee (or a Custodian on behalf of the Trustee) shall, at
the written request and expense of any Certificateholder, provide a written
report to such Certificateholder, of all Mortgage
Files released to the Master Servicer for servicing purposes.
SECTION 2.03. Repurchase or Substitution of Mortgage
Loans by the Originator, the Seller or the
Depositor; Payment of Prepayment Charges in
the event of breach.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, the Mortgage File or
of the breach by the Originator or the Seller of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders (in the case of any such
representation or warranty made to the knowledge or the best of knowledge of the
Originator or the Seller, as to which the Originator or the Seller has no
knowledge, without regard to the Originator's or the Seller's lack of knowledge
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with respect to the substance of such representation or warranty being
inaccurate at the time it was made), the Trustee (or a Custodian on behalf of
the Trustee) shall promptly notify the Originator or the Seller and the Master
Servicer of such defect, missing document or breach and request that the
Originator or the Seller, as the case may be, deliver such missing document or
cure such defect or breach within 90 days from the date the Originator or the
Seller, as the case may be, was notified of such missing document, defect or
breach, and if the Originator or the Seller, as the case may be, does not
deliver such missing document or cure such defect or breach in all material
respects during such period, the Master Servicer (or, in accordance with Section
3.02(b), the Trustee) shall enforce the obligations of the Originator or the
Seller, as the case may be, under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Originator or the Seller, as the case may be, was
notified (subject to Section 2.03(e)) of such missing document, defect or
breach, if and to the extent that the Originator or the Seller, as the case may
be, is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release to the Originator or the
Seller, as the case may be, the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator or the Seller, as the case may be, shall furnish to
it and as shall be necessary to vest in the Originator or the Seller, as the
case may be, any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Originator or the Seller, as the case may
be, may cause such Mortgage Loan to be removed from REMIC I (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(d). It is understood and agreed that the obligation of the
Originator or the Seller, as the case may be, to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.
(b) Subject to Section 2.03(e), within 90 days of the earlier of
discovery by the Depositor or receipt of notice by the Depositor of the breach
of any representation or warranty of the Depositor set forth in Section 2.04
with respect to any Mortgage Loan, which materially adversely affects the value
of such Mortgage Loan or the interest therein of the Certificateholders, the
Depositor shall (i) cure such breach in all material respects, (ii) repurchase
the Mortgage Loan from REMIC I at the Purchase Price or (iii) remove such
Mortgage Loan from REMIC I (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d). If any such
breach is a breach of any of the representations and warranties included in
Section 2.04(a)(iv), and the Depositor is unable to cure such breach, the
Depositor shall repurchase or substitute the smallest number of Mortgage Loans
as shall be required to make such representation or warranty true and correct.
The Purchase Price for any repurchased Mortgage Loan shall be delivered to the
Master Servicer for deposit in the Collection Account, and the Trustee, upon
receipt of written certification from the Master Servicer of such deposit, shall
at the Depositor's direction release to the Depositor
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the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment furnished by the Depositor, in each case without
recourse, as the Depositor shall furnish to it and as shall be necessary to vest
in the Depositor any Mortgage Loan released pursuant hereto.
(c) (i) Promptly upon the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(ii) Within 90 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the Holders of the
Class P Certificates to any Prepayment Charge, the Master Servicer shall cure
such breach in all material respects. If the representation made by the Master
Servicer in Section 2.05(vii) is breached, the Master Servicer must pay into the
Collection Account the amount of the scheduled Prepayment Charge, less any
amount collected and paid by the Master Servicer into the Collection Account;
and if the covenant made by the Master Servicer in Section 2.05(viii) is
breached, the Master Servicer must pay into the Collection Account the amount of
the waived Prepayment Charge.
(d) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator or the Seller, or Section 2.03(b), in the case of the Depositor, must
be effected prior to the date which is two years after the Startup Day for REMIC
I.
As to any Deleted Mortgage Loan for which the Originator or the
Seller or the Depositor substitutes a Qualified Substitute Mortgage Loan or
Loans, such substitution shall be effected by the Originator or the Seller or
the Depositor, as the case may be, delivering to the Trustee (or a Custodian on
behalf of the Trustee), for such Qualified Substitute Mortgage Loan or Loans,
the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers' Certificate providing that
each such Qualified Substitute Mortgage Loan satisfies the definition thereof
and specifying the Substitution Shortfall Amount (as described below), if any,
in connection with such substitution. The Trustee (or a Custodian on behalf of
the Trustee) shall acknowledge receipt for such Qualified Substitute Mortgage
Loan or Loans and, within ten Business Days thereafter, review such documents as
specified in Section 2.02 and deliver to the Depositor and the Master Servicer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit C-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor and the Master Servicer
a certification substantially in the form of Exhibit C-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of REMIC I and will be
retained by the Depositor, the Originator or the Seller, as the case may be. For
the month of substitution, distributions to Certificateholders will reflect the
Monthly Payment due on such Deleted Mortgage Loan on or before the Due Date in
the
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month of substitution, and the Depositor, the Originator or the Seller, as the
case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and, in the case of a substitution effected by the Originator or
the Seller, the Mortgage Loan Purchase Agreement, including, in the case of a
substitution effected by the Originator or the Seller, all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement, and in the case of a substitution effected by the Depositor, all
applicable representations and warranties thereof set forth in Section 2.04, in
each case as of the date of substitution.
For any month in which the Depositor, the Originator or the Seller
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer will determine the amount (the
"Substitution Shortfall Amount"), if any, by which the aggregate Purchase Price
of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such
Qualified Substitute Mortgage Loan, the Scheduled Principal Balance thereof as
of the date of substitution, together with one month's interest on such
Scheduled Principal Balance at the applicable Net Mortgage Rate. On the date of
such substitution, the Depositor, the Originator or the Seller, as the case may
be, will deliver or cause to be delivered to the Master Servicer for deposit in
the Collection Account an amount equal to the Substitution Shortfall Amount, if
any, and the Trustee, upon receipt of the related Qualified Substitute Mortgage
Loan or Loans and certification by the Master Servicer of such deposit, shall
release to the Depositor, the Originator or the Seller, as the case may be, the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Depositor, the
Originator or the Seller, as the case may be, shall deliver to it and as shall
be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Depositor, the Originator or the Seller, as the
case may be, shall obtain at its own expense and deliver to the Trustee an
Opinion of Counsel to the effect that such substitution will not cause (a) any
federal tax to be imposed on any of REMIC I, REMIC II or REMIC III, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup date"
under Section 860G(d)(1) of the Code, or (b) any of REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
(e) Upon discovery by the Depositor, the Originator, the Seller,
the Master Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
party discovering such fact shall within two Business Days give written notice
thereof to the other parties. In connection therewith, the Originator, the
Seller or the Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(d), substitute one or more Qualified Substitute Mortgage
Loans for the affected Mortgage Loan within 90 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Such
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repurchase or substitution shall be made by (i) the Originator or the Seller, as
the case may be, if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Originator or the Seller, as the case may be, under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.04, or if its status as a non-qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a),
if made by the Originator or the Seller, or Section 2.03(b), if made by the
Depositor. The Trustee shall reconvey to the Depositor, the Originator or the
Seller, as the case may be, the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty.
SECTION 2.04. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee
for the benefit of the Certificateholders that as of the Closing Date or as of
such other date specifically provided
herein:
(i) The information set forth in the Mortgage Loan Schedule for
the Initial Mortgage Loans is complete, true and correct in all
material respects at the date or dates respecting
which such information is furnished;
(ii) Except with respect to approximately 1.48% of the Initial
Mortgage Loans, by aggregate Stated Principal Balance as of the
Cut-off Date, which, as of the Cut-off Date, were 30 or more but
less than 60 days delinquent and approximately 0.43% of the
Initial Mortgage Loans by aggregate Stated Principal Balance as of
the Cut-off Date, which, as of the Cut-off Date, were 60 or more
but less than 90 days delinquent, as of the Cutoff Date, the
Monthly Payment due under each Initial Mortgage Loan is not 30 or
more days delinquent in payment and has not been 30 or more days
delinquent in payment more than once in the twelve month period
prior to the Cut-off Date (assuming that a "rolling" 30 day
delinquency is considered to be one time delinquent);
(iii) Each Initial Mortgage Loan had an original term to maturity
of not greater than 30 years; each Initial Mortgage Loan is an
adjustable-rate mortgage loan with payments due on the first day
of each month and each such Mortgage Loan is fully amortizing;
effective with the first payment due after each Adjustment Date,
the monthly payment amount for each Initial Mortgage Loan will be
adjusted to an amount which would amortize fully the outstanding
principal balance of such Mortgage Loan over its remaining term
and pay interest at the Mortgage Rate so adjusted; on the first
Adjustment Date and on each Adjustment Date thereafter the
Mortgage Rate on each Initial Mortgage Loan will be adjusted to
equal the sum of the Index and the related Gross Margin, rounded
to the nearest multiple of 0.125%, subject to the Periodic Rate
Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate
applicable to such Mortgage Loan;
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(iv) (A) No more than approximately 23.65%, approximately 6.63%,
approximately 4.49%, approximately 4.04%, approximately 4.07%,
approximately 3.62%, approximately 4.63%, approximately 3.77%,
approximately 5.49% and approximately 3.09% of the Initial Mortgage
Loans, by outstanding principal balance of the Initial Mortgage Loans
as of the Cut-off Date, will be secured by Mortgaged Properties located
in California, Florida, Illinois, Massachusetts, Michigan, Minnesota,
New Jersey, New York, Pennsylvania, Texas and Washington, respectively,
and no more than approximately 2.46% of the Initial Mortgage Loans, by
outstanding principal balance of the Initial Mortgage Loans as of the
Cut-off Date, will be secured by Mortgaged Properties located in any
other single state; (B) as of the Cutoff Date, no more than
approximately 0.31% of the Initial Mortgage Loans, by outstanding
principal balance of the Initial Mortgage Loans as of the Cut-off Date,
are secured by Mortgaged Properties located in any one California zip
code area, and no more than approximately 14.06% of the Initial
Mortgage Loans, by outstanding principal balance of the Initial
Mortgage Loans as of the Cut-off Date are secured by units in two- to
four-family dwellings, condominiums, town houses, planned unit
developments or manufactured housing; and (C) at least approximately
85.94% of the Initial Mortgage Loans, by outstanding principal balance
of the Initial Mortgage Loans as of the Cut-off Date, are secured by
real property with a single family residence erected thereon;
(v) If the Mortgaged Property securing an Initial Mortgage Loan is
identified in the Federal Register by the Federal Emergency Management
Agency ("FEMA") as having special flood hazards, a flood insurance
policy is in effect at the Closing Date which met the
requirements of FEMA at the time such policy was issued;
(vi) With respect to each Initial Mortgage Loan, the Loan-to-Value
Ratio was less than or equal to 90.00% at the origination of such
Initial Mortgage Loan; and
(vii) With respect to at least approximately 94.43% of the Initial
Mortgage Loans by outstanding principal balance as of the Cut-off Date,
at the time that the Mortgage Loan was made, the Mortgagor represented
that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence. With respect to approximately 5.57% of
the Initial Mortgage Loans by outstanding principal balance as of the
Cut-off Date, at the time that the Mortgage Loan was made, the
Mortgagor represented that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor's secondary residence or that the Mortgaged
Property would be an investor property.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee or to a Custodian, as the case may be, and shall inure to
the benefit of the Certificateholders notwithstanding any restrictive or
qualified endorsement or assignment. Upon discovery by any of the Depositor, the
Master Servicer or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of any Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice to the other parties, and in no event later than two Business Days from
the date of such discovery. It is understood and agreed that the obligations of
the Depositor set forth in Section 2.03(b) to cure,
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substitute for or repurchase a Mortgage Loan constitute the sole remedies
available to the Certificateholders or to the Trustee on their behalf respecting
a breach of the representations and warranties contained in this Section 2.04.
SECTION 2.05. Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants to
the Trustee, for the benefit of each of the Trustee, the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by the
Master Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with
the doing business laws of any such State, to the extent necessary
to ensure its ability to enforce each Mortgage Loan and to service
the Mortgage Loans in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power and
authority to service each Mortgage Loan, and to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Master Servicer the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
thereof by the Depositor and the Trustee, constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, except
to the extent that (a) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought;
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master
Servicer hereunder, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of
business of the Master Servicer and will not (A) result in a
breach of any term or provision of the charter or by-laws of the
Master Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which the
Master Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Master Servicer; and the Master
Servicer is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or
in violation of any
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statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Master
Servicer's knowledge, would in the future materially and adversely
affect, (x) the ability of the Master Servicer to perform its
obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Master Servicer
taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for
Xxxxxx Xxx or Xxxxxxx Mac in good standing and is a HUD approved
mortgagee pursuant to Section 203 and Section
211 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master
Servicer to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of, or compliance
by the Master Servicer with, this Agreement or the consummation of
the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(vii) The information set forth in the Prepayment Charge Schedule
(including the prepayment charge summary attached thereto) is
complete, true and correct in all material respects at the date or
dates respecting which such information is furnished and each
Prepayment Charge is permissible and enforceable in accordance
with its terms (except to the extent that (i) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights
generally, (ii) the collectability thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary
payment and (iii) subsequent changes in applicable law may limit
or prohibit the enforceability thereof) under applicable state
law;
(viii) The Master Servicer will not waive any Prepayment Charge or
part of a Prepayment Charge unless, in the Master Servicer's
reasonable judgment as described in Section 3.01 hereof, such
waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and related Mortgage
Loan and doing so is standard and customary in servicing similar
Mortgage Loans (including any waiver of a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is related
to a default or a reasonably foreseeable default) and in no event
will it waive a Prepayment Charge in connection with a refinancing
of a Mortgage Loan that is not related to a default or a
reasonably foreseeable default;
(ix) The Master Servicer's computer and other systems used in
servicing mortgage loans will be modified and maintained to
operate in a manner such that at all times,
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including on and after January 1, 2000, (i) the Master Servicer
can service the Mortgage Loans in accordance with the terms of
this Agreement if necessary and (ii) the Master Servicer can
operate its business in the same manner as it is operating on the
date hereof; provided that the Master Servicer's ability to meet
the requirements of this representation may be limited in
circumstances where it relies (after reasonable due diligence in
inquiring into and obtaining reasonable compliance
representations) on third party systems which are incompatible
with those of the Master Servicer on or after January 1, 2000; and
(x) The information set forth in the "monthly tape" provided to
the Trustee or any of its affiliates is true and correct in all
material respects.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee or to a Custodian, as the case may be, and shall
inure to the benefit of the Trustee, the Depositor and the Certificateholders.
Upon discovery by any of the Depositor, the Master Servicer or the Trustee of a
breach of any of the foregoing representations, warranties and covenants which
materially and adversely affects the value of any Mortgage Loan, Prepayment
Charge or the interests therein of the Certificateholders, the party discovering
such breach shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Trustee. Subject to Section 7.01,
the obligation of the Master Servicer set forth in Section 2.03(c) to cure
breaches shall constitute the sole remedies against the Master Servicer
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.05. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders, pursuant to the Mortgage
Loan Purchase Agreement signed by the Master Servicer in its capacity as Seller,
respecting a breach of the representations, warranties and covenants of the
Master Servicer in its capacity as Seller contained in such Mortgage Loan
Purchase Agreement.
SECTION 2.06. Issuance of Class R-I Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it, or any Custodian on its behalf, of the Mortgage
Files, subject to the provisions of Section 2.01 and Section 2.02, together with
the assignment to it of all other assets included in REMIC I, receipt of which
is hereby acknowledged. Concurrently with such assignment and delivery and in
exchange therefor, the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-I Certificates in
authorized denominations. The interests evidenced by the Class R-I Certificates,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Class R-I Certificateholders
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I
Certificates and the REMIC I Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-I Certificates and the REMIC I
Regular Interests, shall be as set forth in this Agreement.
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SECTION 2.07. Conveyance of REMIC I Regular Interests; Acceptance
of REMIC II by the Trustee.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R-II and REMIC
III Certificateholders. The Trustee acknowledges receipt of the REMIC I Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future Class R-II
Certificateholders and REMIC III Certificateholders. The rights of the Class
R-II Certificateholders and REMIC III (as holder of the REMIC II Regular
Interests) to receive distributions from the proceeds of REMIC II in respect of
the Class R-II Certificates and REMIC II Regular Interests, respectively, and
all ownership interests evidenced or constituted by the Class R-II Certificates
and the REMIC II Regular Interests, shall be as set forth in this Agreement.
SECTION 2.08. Issuance of Class R-II Certificates.
The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R-II Certificates in authorized denominations. The
interests evidenced by the Class R-II Certificates, together with the REMIC II
Regular Interests, constitute the entire beneficial ownership interest in REMIC
II.
SECTION 2.09. Conveyance of REMIC II Regular Interests;
Acceptance of REMIC III by the Trustee.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests for the benefit of the REMIC III
Certificateholders. The Trustee acknowledges receipt of the REMIC II Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future REMIC III
Certificateholders. The rights of the REMIC III Certificateholders to receive
distributions from the proceeds of REMIC III in respect of the REMIC III
Certificates, and all ownership interests evidenced or constituted by the REMIC
III Certificates, shall be as set forth in this Agreement.
SECTION 2.10. Issuance of REMIC III Certificates.
The Trustee acknowledges the assignment to it of the REMIC II
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the REMIC III Certificates in authorized denominations evidencing
the entire beneficial ownership interest in REMIC III.
SECTION 2.11. Conveyance of the Subsequent Mortgage Loans.
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(a) Subject to the conditions set forth in paragraph (b) below in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the order of the Depositor of all or a portion of the balance of funds in
the Pre-Funding Account, the Depositor shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Depositor in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Depositor on such Subsequent
Transfer Date, (ii) principal due and interest accruing on the Subsequent
Mortgage Loans after the related Subsequent Cut-off Date and (iii) all items
with respect to such Subsequent Mortgage Loans to be delivered pursuant to
Section 2.01 and the other items in the related Mortgage Files; provided,
however, that the Depositor reserves and retains all right, title and interest
in and to principal received and interest accruing on the Subsequent Mortgage
Loans prior to the related Subsequent Cut-off Date. The transfer to the Trustee
for deposit in the Mortgage Pool by the Depositor of the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule shall be absolute and is intended
by the Depositor, the Master Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee or the Custodian at least three
Business Days prior to the related Subsequent Transfer Date.
The purchase price paid by the Trustee from amounts released from
the Pre-Funding Account shall be one-hundred percent (100%) of the aggregate
Stated Principal Balance of the Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Depositor). This
Agreement shall constitute a fixed-price purchase contract in accordance
with Section 860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for deposit in the
Mortgage Pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account, only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee with a timely
Addition Notice and shall have provided any information reasonably
requested by the Trustee with respect to the Subsequent Mortgage Loans;
(ii) the Depositor shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument, which shall include a Mortgage
Loan Schedule listing the Subsequent Mortgage Loans, and the Master
Servicer, in its capacity as Seller, shall have delivered a computer
file containing such Mortgage Loan Schedule to the Trustee at least
three Business Days prior to the related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit I, the Depositor shall not be insolvent nor shall it
have been rendered insolvent by such transfer nor shall it be aware of
any pending insolvency;
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(iv) such sale and transfer shall not result in a material adverse
tax consequence to the Trust Fund or the Certificateholders;
(v) the Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent Mortgage
Loans in a manner that it believed to be adverse to the interests of
the Certificateholders;
(vii) the Depositor shall have delivered to the Trustee a
Subsequent Transfer Instrument confirming the satisfaction of the
conditions precedent specified in this Section 2.11 and, pursuant to
the Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage
Loans;
(viii) the Depositor shall have delivered to the Trustee a letter
from an Independent accountant (with copies provided to each Rating
Agency) stating that the characteristics of the Subsequent Mortgage
Loans conform to the characteristics set forth in paragraphs (c) and
(d) below; and
(ix) the Depositor shall have delivered to the Trustee an Opinion
of Counsel addressed to the Trustee and the Rating Agencies with
respect to the transfer of the Subsequent Mortgage Loans substantially
in the form of the Opinion of Counsel delivered to the Trustee on the
Closing Date regarding the true sale of the Subsequent Mortgage Loans.
(c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the Subsequent Cut-off Date: (i) the Subsequent
Mortgage Loan may not be 30 or more days delinquent as of the related Subsequent
Cut-off Date provided, however that approximately 1.49% of the Subsequent
Mortgage Loans, by aggregate principal balance as of the related Subsequent
Cut-off Date, may be thirty days or more but less than sixty days delinquent in
their monthly payments as of the related Subsequent Cut-off Date and
approximately 0.49% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, may be sixty days or more but
less than ninety days delinquent in their monthly payments as of the related
Subsequent Cut-off Date; (ii) the stated term to maturity of the Subsequent
Mortgage Loan will not be less than 345 months and will not exceed 360 months;
(iii) the Subsequent Mortgage Loan may not provide for negative amortization;
(iv) the Subsequent Mortgage Loan will not have a Loan-to-Value Ratio greater
than 90.00%; (v) the Subsequent Mortgage Loans will have as of the Subsequent
Cut-off Date, a weighted average term since origination not in excess of 15
months; (vi) no Subsequent Mortgage Loan shall have a Mortgage Rate less than
7.50% or greater than 16.00%; (vii) the Subsequent Mortgage Loan will have been
serviced by the Master Servicer since origination or purchased by the Depositor;
(viii) the Subsequent Mortgage Loan must have a first Monthly Payment due on or
before February 1, 1999 and (ix) the Subsequent Mortgage Loan will be
underwritten in accordance with the criteria set forth
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under the section "The Mortgage Pool--Underwriting Standards; Representations"
in the Prospectus Supplement.
(d) Following the purchase of the Subsequent Mortgage Loans by the
Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will,
as of the Subsequent Cut-off Date: (i) have a weighted average original term to
stated maturity of not more than 360 months; (ii) have a weighted average
Mortgage Rate of not less than 9.556% and not more than 9.750%; (iii) have a
weighted average Loan-to-Value Ratio of not more than 74.265%; (iv) have no
Mortgage Loan with a principal balance in excess of $602,000 and (v) have a
weighted average Gross Margin of not less than 6.467%, in each case, as
applicable, by aggregate principal balance of the Mortgage Loans as of the
related Subsequent Cut-off Date.
(e) Notwithstanding the foregoing, any Subsequent Mortgage Loan
may be rejected by either Rating Agency if the inclusion of any such Subsequent
Mortgage Loan would adversely affect the ratings of any Class of Certificates.
At least one Business Day prior to the related Subsequent Transfer Date, each
Rating Agency shall notify the Trustee, the Master Servicer and the Depositor as
to which Subsequent Mortgage Loans, if any, shall not be included in the
transfer on the related Subsequent Transfer Date; provided, however, that the
Master Servicer, in its capacity as Seller, shall have delivered to each Rating
Agency at least three Business Days prior to such Subsequent Transfer Date a
computer file acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer
or any Affiliate of the Master Servicer or any Sub-Servicer may
have with the related Mortgagor;
(ii) the ownership of any Certificate by the Master Servicer or
any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any
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standard hazard insurance policy. Subject to Section 3.17, the Trustee shall
execute, at the written request of the Master Servicer, and furnish to the
Master Servicer and any Sub-Servicer such documents as are necessary or
appropriate to enable the Master Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Master Servicer a power of attorney to carry out such duties. The Trustee
shall not be liable for the actions of the Master Servicer or any Sub-Servicers
under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards
of the preceding paragraph, the Master Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11. Any cost incurred by the Master Servicer or by Sub-Servicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not,
for the purpose of calculating distributions to Certificateholders, be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
Master Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.
SECTION 3.02. Sub-Servicing Agreements Between the Master
Servicer and Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements
(provided that such agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates) with
Sub-Servicers, for the servicing and administration of the
Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-
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Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts in
which are insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Seller shall be
effected by the Master Servicer to the extent it is not the Seller, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance
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with the terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Sub- Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Master Servicer shall for any reason no longer be
the master servicer (including by reason of the occurrence of a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume all of the
rights and obligations of the Master Servicer under each Sub-Servicing Agreement
that the Master Servicer may have entered into, unless the Trustee elects to
terminate any Sub-Servicing Agreement in accordance with its terms as provided
in Section 3.03. Upon such assumption, the Trustee, its designee or the
successor servicer for the Trustee appointed pursuant to Section 7.02 shall be
deemed, subject to Section 3.03, to have assumed all of the Master
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Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.03
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also,
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan (such payment, a "Short
Pay-off") or consent to the postponement of strict compliance with any such term
or otherwise grant indulgence to any Mortgagor.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than
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one Business Day after the Sub-Servicer's receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the deposit of such funds into the clearing account. The
Sub- Servicer shall thereafter deposit such proceeds in the Collection Account
or remit such proceeds to the Master Servicer for deposit in the Collection
Account not later than two Business Days after the deposit of such amounts in
the Sub-Servicing Account. For purposes of this Agreement, the Master Servicer
shall be deemed to have received payments on the Mortgage Loans when the
Sub-Servicer receives such payments.
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"). Servicing Accounts shall be Eligible
Accounts. The Master Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Master Servicer's receipt thereof, all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
hazard insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Servicing Accounts, in no event
more than two Business Days after the deposit of such funds in the clearing
account, for the purpose of effecting the payment of any such items as required
under the terms of this Agreement. Withdrawals of amounts from a Servicing
Account may be made only to (i) effect payment of taxes, assessments, hazard
insurance premiums, and comparable items; (ii) reimburse the Master Servicer (or
a Sub- Servicer to the extent provided in the related Sub-Servicing Agreement)
out of related collections for any advances made pursuant to Section 3.01 (with
respect to taxes and assessments) and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; (v) clear and terminate the Servicing
Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.
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SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date with respect to the Initial Mortgage Loans, or
Subsequent Cut-off Date with respect to the Subsequent Mortgage Loans (other
than in respect of principal or interest on the related Mortgage Loans due on or
before the Cut-off Date or Subsequent Cut-off Date, as applicable), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date or Subsequent Cut-off Date, as applicable but allocable to a Due Period
subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and
amounts paid by the Master Servicer in connection with a purchase
of Mortgage Loans and REO Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted
Investments with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of
any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage
Loans pursuant to Section 2.03; and
(viii) all Prepayment Charges collected by the Master Servicer in
connection with the voluntary Principal Prepayment in full of any
of the Mortgage Loans.
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For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees or assumption fees and other similar fees and charges
need not be deposited by the Master Servicer in the Collection Account and
shall, upon collection, belong to the Master Servicer as additional compensation
for its servicing activities. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of all Prepayment Charges collected by the
Master Servicer in connection with the voluntary Principal Prepayment in full of
any of the Mortgage Loans then on deposit in the Collection Account (other than
any such Prepayment Charges received after the related Prepayment Period) and
(ii) on each Business Day as of the commencement of which the balance on deposit
in the Collection Account exceeds $75,000 following any withdrawals pursuant to
the next succeeding sentence, the amount of such excess, but only if the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account." If the balance on deposit in the
Collection Account exceeds $75,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Master
Servicer shall, on or before 3:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Master Servicer, the Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11 and shall pay such amounts to the Persons
entitled thereto.
(c) Funds in the Collection Account and the Distribution Account
may be invested in Permitted Investments in accordance with the provisions set
forth in Section 3.12. The Master Servicer shall give notice to the Trustee and
the Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this
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subsection (d). In the event the Master Servicer shall deliver to the Trustee
for deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to it any such amount, any provision herein
to the contrary notwithstanding. In addition, the Master Servicer shall deliver
to the Trustee from time to time for deposit, and the Trustee shall so deposit,
in the Distribution Account:
(i) any P&I Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in connection
with a purchase of Mortgage Loans and REO Properties pursuant to
Section 9.01;
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder. In addition, the Master Servicer shall deposit in the
Collection Account any amounts required to be deposited pursuant to Section
3.12(b) in connection with losses realized on Permitted Investments with respect
to funds held in the Collection Account.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 4.03:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first
sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer
for P&I Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of
Monthly Payments on Mortgage Loans with respect to which such P&I
Advances were made in accordance with the provisions of Section
4.03;
(iii) subject to Section 3.16(d), to pay the Master Servicer or
any Sub-Servicer any unpaid Servicing Fees and reimburse any
unreimbursed Servicing Advances with respect to each Mortgage
Loan, but only to the extent of any Liquidation Proceeds,
Insurance
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Proceeds or other amounts as may be collected by the Master
Servicer from a Mortgagor, or otherwise received with respect to
such Mortgage Loan;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited
in the Collection Account;
(v) to pay to the Master Servicer, the Depositor or the Seller,
as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(c) all amounts received thereon subsequent to the
date of purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any P&I Advance
previously made which the Master Servicer has determined to be a
Nonrecoverable P&I Advance in accordance
with the provisions of Section 4.03;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as the
case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the purchase obligation under
Section 2.03 or Section 2.04 of this Agreement that were included
in the Purchase Price of the Mortgage Loan, including any expenses
arising out of the enforcement of the purchase obligation;
(ix) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 9.01.
The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above.
The Master Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vii) above.
(b) The Trustee shall, from time to time, make withdrawals from
the Distribution Account, for any of the following purposes, without priority:
(i) to make distributions to Certificateholders in accordance
with Section 4.01;
(ii) to pay to itself the Trustee's Fee pursuant to Section 8.05;
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(iii) to pay itself any interest income earned on funds deposited
in the Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself pursuant to Section 7.02;
(v) to pay any amounts in respect of taxes pursuant to Section
10.01(g)(iii); and
(vi) to clear and terminate the Distribution Account pursuant to
Section 9.01.
SECTION 3.12. Investment of Funds in the Pre-Funding
Account, the Interest Coverage Account,
Collection Account and the Distribution
Account.
(a) The Master Servicer may direct any depository institution
maintaining the Pre- Funding Account, the Interest Coverage Account and the
Collection Account (for purposes of this Section 3.12, an "Investment Account"),
and the Trustee, in its individual capacity, may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.12, also an "Investment Account"), to invest the funds (other than the Initial
Deposit) in such Investment Account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee is the obligor thereon and (ii) no later than the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Trustee is the obligor thereon. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee (in
its capacity as such) or in the name of a nominee of the Trustee. The Trustee
shall be entitled to sole possession (except with respect to investment
direction of funds held in the Pre- Funding Account, the Interest Coverage
Account and the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in
the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Pre- Funding Account, the Interest Coverage Account and the
Collection Account held by or on behalf
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of the Master Servicer, shall be for the benefit of the Master Servicer and
shall be subject to its withdrawal in accordance with Sections 4.07 and 4.08.
The Master Servicer shall deposit in the Pre- Funding Account, the Interest
Coverage Account and the Collection Account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(v), upon the request of the Holders of Certificates representing more than
50% of the Voting Rights allocated to any Class of Certificates, shall take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
SECTION 3.13. [intentionally omitted]
SECTION 3.14. Maintenance of Hazard Insurance and Errors
and Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Rate and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an
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REO Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has obtained a waiver
of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
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SECTION 3.15. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Master
Servicer in respect of an assumption or substitution of liability agreement will
be retained by the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Trustee and
any respective Custodian that any such substitution or assumption agreement has
been completed by forwarding to the Trustee or to such Custodian, as the case
may be, the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or by the terms of the Mortgage Note or
any assumption which the Master Servicer may be restricted by law from
preventing, for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
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(a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans
(including selling any such Mortgage Loans other than converting the ownership
of the related property) as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16
or any other provision of this Agreement, with respect to any Mortgage Loan as
to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if
any such materials are present for which such action could be
required, that it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected
Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
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If the Master Servicer determines, as described above, that it is
in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from REMIC I
any Mortgage Loan or related REO Property that is 90 days or more delinquent,
which the Master Servicer determines in good faith will otherwise become subject
to foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price; provided, however, that the Master Servicer shall purchase any such
Mortgage Loans or related REO Properties on the basis of delinquency, purchasing
the most delinquent Mortgage Loans or related REO Properties first. The Purchase
Price for any Mortgage Loan or related REO Property purchased hereunder shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release or cause
to be released to the Master Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Master Servicer shall furnish and as shall be necessary
to vest in the Master Servicer title to any Mortgage Loan or related REO
Property released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: first, to
unpaid Servicing Fees; and second, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee and any related Custodian by a
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certification in the form of Exhibit E-2 (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee or such Custodian,
as the case may be, shall promptly release the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E-l, release the related Mortgage File to the Master Servicer, and the
Trustee shall, at the direction of the Master Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings and the Master
Servicer shall retain such Mortgage File in trust for the benefit of the
Certificateholders. Such Request for Release shall obligate the Master Servicer
to return each and every document previously requested from the Mortgage File to
the Trustee or to such Custodian when the need therefor by the Master Servicer
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered to the Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or such Custodian to the Master Servicer.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.18. Servicing Compensation.
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As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption fees,
late payment charges, NSF fees, reconveyance fees and other similar fees and
charges (other than Prepayment Charges) shall be retained by the Master Servicer
(subject to Section 3.24) only to the extent such fees or charges are received
by the Master Servicer. The Master Servicer shall also be entitled pursuant to
Section 3.11(a)(iv) to withdraw from the Collection Account, and pursuant to
Section 3.23(b) to withdraw from any REO Account, as additional servicing
compensation, interest or other income earned on deposits therein, subject to
Section 3.12 and Section 3.24. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including premiums for the insurance required by Section 3.14, to the extent
such premiums are not paid by the related Mortgagors or by a Sub-Servicer,
servicing compensation of each Sub-Servicer, and to the extent provided herein
in Section 8.05, the fees and expenses of the Trustee) and shall not be entitled
to reimbursement therefor except as specifically provided herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee and the Depositor a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.10(a) and each category of withdrawal specified in Section 3.11. Such
statement may be in the form of the then current Xxxxxx Xxx Monthly Accounting
Report for its Guaranteed Mortgage Pass-Through Program with appropriate
additions and changes, and shall also include information as to the aggregate of
the outstanding principal balances of all of the Mortgage Loans as of the last
day of the calendar month immediately preceding such Distribution Date. Copies
of such statement shall be provided by the Trustee to any Certificateholder and
to any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Master Servicer will deliver to the Trustee, the Depositor and
each Rating Agency on or before April 15 of each calendar year commencing in
2000, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master
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Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing Report.
Not later than April 15 of each calendar year commencing in 2000,
the Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee. In the event
such firm of independent certified public accountants requires the Trustee to
agree to the procedures performed by such firm, the Master Servicer shall direct
the Trustee in writing to so agree; it being understood and agreed that the
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Master Servicer, and the Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.
SECTION 3.22. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee and to any Person identified to the Master Servicer as a prospective
transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
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SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall be
taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC I (and on behalf
of the Trustee for the benefit of the Certificateholders), shall either sell any
REO Property before the close of the third taxable year after the year REMIC I
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of the three-year grace period, unless the Master Servicer shall have
delivered to the Trustee and the Depositor an Opinion of Counsel, addressed to
the Trustee and the Depositor, to the effect that the holding by REMIC I of such
REO Property subsequent to three years after its acquisition will not result in
the imposition on REMIC I, REMIC II or REMIC III of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any of
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC under Federal law
at any time that any Certificates are outstanding. The Master Servicer shall
manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by REMIC I, REMIC II or REMIC III of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
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(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:
(i) authorize the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease by
its terms will give rise to any income that does not constitute
Rents from Real Property;
(ii) authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such
building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) authorize any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by the
Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by REMIC
I, in which case the Master Servicer may take such actions as are specified in
such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor
for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and
expenses incurred in connection with the
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operation and management of such REO Property, including those
listed above and remit all related revenues (net of such costs and
expenses) to the Master Servicer as soon as practicable, but in no
event later than thirty days following the receipt thereof by such
Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any
of its duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of
any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation
and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
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(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit into
the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting solely from Principal Prepayments during the related Prepayment
Period and (ii) the amount of its aggregate Servicing Fee for the most recently
ended calendar month.
SECTION 3.25. Obligations of the Master Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability
with respect to any Mortgage Loan results from or is attributable to adjustments
to Mortgage Rates, Monthly Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
SECTION 3.26. Advance Facility.
The Master Servicer is hereby authorized to enter into a facility
with any Person which provides that such Person (an "Advancing Person") may fund
P&I Advances and/or Servicing Advances under this Agreement, although no such
facility shall reduce or otherwise affect the Master Servicer's obligation to
fund such P&I Advances and/or Servicing Advances. To the extent that an
Advancing Person funds any P&I Advance or any Servicing Advance and provides the
Trustee with notice, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the same extent that
the Master Servicer would be so reimbursed had the Master Servicer funded such
amount. An Advancing Person whose obligations are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Sub-Servicer pursuant to Section 3.02 hereof.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a)(1)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R-I
Certificates, as the case may be:
(i) to the Holders of REMIC I Regular Interests (other than
REMIC I Regular Interest I-LTP), in an amount equal to (A) the
Uncertificated Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Interest in
respect of REMIC I Regular Interest I-LT7 shall be reduced when
the REMIC I Overcollateralized Amount is less than the REMIC I
Required Overcollateralized Amount, by the lesser of (x) the
amount of such difference and (y) the Maximum I-LT7
Uncertificated Interest Deferral Amount; and
(ii) on each Distribution Date, to the Holders of REMIC I Regular
Interests, in an amount equal to the remainder of the Available
Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as
follows (except as provided below):
(a) to the Holders of the REMIC I Regular Interest I-LTP,
on the Distribution Date immediately following the expiration
of the latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date thereafter
until $100 has been distributed pursuant to this clause;
(b) to the Holders of the REMIC I Regular Interest I-LT1,
98.00% of the amount remaining after application of clause
(a), until the Uncertificated Balance of such REMIC I Regular
Interest is reduced to zero and any remaining amount to the
Holders of the Class R-I Certificates;
(c) to the Holders of the REMIC I Regular Interest I-LT2,
REMIC I Regular Interest I-LT3, REMIC I Regular Interest
I-LT4, REMIC I Regular Interest I-LT5 and REMIC I Regular
Interest I-LT6, 1.00% of the amount remaining after
application of clause (a), in the same proportion as principal
payments are allocated to the related Corresponding
Certificates, until the Uncertificated Balances of such REMIC
I Regular Interests are reduced to zero and any remaining
amount to the Holders of the Class R-I Certificates; and
(d) to the Holders of the REMIC I Regular Interest I-LT7,
1.00% of the amount remaining after application of clause (a),
until the Uncertificated Balance of such
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REMIC I Regular Interest is reduced to zero and any remaining
amount to the Holders of the Class R-I Certificates;
provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to a Overcollateralization Reduction Amount shall be allocated to
Holders of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT7, respectively.
(B) On each Distribution Date, the following amounts shall be
distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests:
(i) any amounts paid as either Uncertificated Interest paid or
accrued to the REMIC I Regular Interests (other than REMIC I
Regular Interest I-LTP) shall be deemed to have been paid to the
related Uncertificated Corresponding Component in REMIC II in
accordance with the REMIC II Remittance Rates and any amounts
deferred on REMIC I Regular Interest I-LT7 pursuant to Section
4.01(a)(1)(A) shall be deemed to have been deferred with respect
to REMIC II Regular Interest II-LT7; and
(ii) any amounts paid as principal on the REMIC I Regular
Interests shall be deemed to have been paid to the related
Uncertificated Corresponding Component in REMIC II in accordance
with the same priorities and conditions.
(2) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account an amount equal to the Interest Remittance Amount and
distribute to the Certificateholders following amounts, in the following order
of priority:
(i) to the Holders of the Class A-1 Certificates, an amount
equal to the Class A-1 Interest Distribution Amount;
(ii) to the extent of the Interest Remittance Amount remaining
after distribution of the Class A-1 Interest Distribution Amount,
to the Holders of the Class A-2 Certificates, an amount equal to
the Class A-2 Interest Distribution Amount allocable to the Class
X- 0 Certificates;
(ii) to the extent of the Interest Remittance Amount remaining
after distribution of the Class A-1 Interest Distribution Amount
and the Class A-2 Interest Distribution Amount, to the Holders of
the Class M-1 Certificates, an amount equal to the Interest
Distribution Amount allocable to the Class M-1 Certificates;
(iii) to the extent of the Interest Remittance Amount remaining
after distribution of the Class A-1 Interest Distribution Amount,
the Class A-2 Interest Distribution Amount and the Interest
Distribution Amount allocable to the Class M-1 Certificates, to
the Holders of the Class M-2 Certificates, an amount equal to the
Interest Distribution Amount allocable to the Class M-2
Certificates; and
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(iv) to the extent of the Interest Remittance Amount remaining
after distribution of the Class A-1 Interest Distribution Amount,
the Class A-2 Interest Distribution Amount and the Interest
Distribution Amounts allocable to the Class M-1 Certificates and
the Class M-2 Certificates, to the Holders of the Class M-3
Certificates, an amount equal to the Interest Distribution Amount
allocable to the Class M-3 Certificates.
(3) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority:
(i) On each Distribution Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, the Principal
Distribution Amount shall be distributed in the following order of
priority;
FIRST, to the Holders of the Class A-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
SECOND, to the Holders of the Class A-2 Certificates, until
the Certificate Principal Balance of such Class has been
reduced to zero;
THIRD, to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
FOURTH, to the Holders of the Class M-2 Certificates, until
the Certificate Principal Balance of such Class has been
reduced to zero; and
FIFTH, to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero.
(ii) On each Distribution Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, the Principal
Distribution Amount shall be distributed in
the following order of priority;
FIRST, the lesser of (x) the Principal Distribution Amount and
(y) the Class A-1 Principal Distribution Amount shall be
distributed to the Holders of the Class A-1 Certificates,
until the Certificate Principal Balance of such Class has been
reduced to zero;
SECOND, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the
Holders of the Class A-1 Certificates pursuant to clause first
above and (y) the Class A-2 Principal Distribution Amount
shall be distributed to the Holders of the Class A-2
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero;
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THIRD, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the
Holders of the Class A-1 Certificates pursuant to clause first
above and to the Holders of the Class A-2 Certificates
pursuant to clause second above and (y) the Class M-1
Principal Distribution Amount shall be distributed to the
Holders of the Class M-1 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero;
fourth, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A-1 Certificates
pursuant to clause first above, to the Holders of the Class
A-2 Certificates pursuant to clause second above and to the
Holders of the Class M-1 Certificates pursuant to clause third
above and (y) the Class M-2 Principal Distribution Amount
shall be distributed to the Holders of the Class M-2
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero; and
fifth, the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amounts
distributed to the Holders of the Class A-1 Certificates
pursuant to clause first above, to the Holders of the Class
A-2 Certificates pursuant to clause second above, to the
Holders of the Class M-1 Certificates pursuant to clause third
above and to the Holders of the Class M-2 Certificates
pursuant to clause fourth above and (y) the Class M-3
Principal Distribution Amount shall be distributed to the
Holders of the Class M-3 Certificates, until the Certificate
Principal Balance of such Class has been reduced to zero.
(4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of
principal, in an amount equal to the principal portion of any
Realized Losses incurred or deemed to have been incurred on
the Mortgage Loans, applied to reduce the Certificate
Principal Balance of such Certificates until the aggregate
Certificate Principal Balance of such Certificates is reduced
to zero;
(ii) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of
principal, in an amount equal to the Overcollateralization
Increase Amount, applied to reduce the Certificate Principal
Balance of such Certificates until the aggregate Certificate
Principal Balance of such Certificates is reduced to zero;
(iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Interest Carry Forward Amount (plus
accrued interest) allocable to such Class of Certificates;
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(iv) to the Holders of the Class M-2 Certificates, in an
amount equal to the Interest Carry Forward Amount (plus
accrued interest) allocable to such Class of Certificates;
(v) to the Holders of the Class M-3 Certificates, in an amount
equal to the Interest Carry Forward Amount (plus accrued
interest) allocable to such Class of Certificates;
(vi) to the Holders of the Class A-1 Certificates, in an
amount equal to the aggregate of any Prepayment Interest
Shortfalls (to the extent not covered by payments pursuant to
Section 3.24) and any Relief Act Interest Shortfall allocated
to such Certificates;
(vii) to the Holders of the Class A-2 Certificates, in an
amount equal to the aggregate of any Prepayment Interest
Shortfalls (to the extent not covered by payments pursuant to
Section 3.24) and any Relief Act Interest Shortfall allocated
to such Certificates;
(viii) to the Holders of the Class M-1 Certificates, in an
amount equal to the aggregate of any Prepayment Interest
Shortfalls (to the extent not covered by payments pursuant to
Section 3.24) and any Relief Act Interest Shortfall allocated
to such Certificates;
(ix) to the Holders of the Class M-2 Certificates, in an
amount equal to the aggregate of any Prepayment Interest
Shortfalls (to the extent not covered by payments pursuant to
Section 3.24) and any Relief Act Interest Shortfall allocated
to such Certificates;
(x) to the Holders of the Class M-3 Certificates, in an amount
equal to the aggregate of any Prepayment Interest Shortfalls
(to the extent not covered by payments pursuant to Section
3.24) and any Relief Act Interest Shortfall allocated to such
Certificates;
(xi) to the Holders of the Class CE Certificates, the Interest
Distribution Amount and any Overcollateralization Reduction
Amount for such Distribution Date; and
(xii) to the Holders of the Class R-III Certificates, any
remaining amounts; provided that if such Distribution Date is
the Distribution Date immediately following the expiration of
the latest Prepayment Charge term as identified on the
Mortgage Loan Schedule or any Distribution Date thereafter,
then any such remaining amounts will be distributed FIRST, to
the Holders of the Class P Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
SECOND, to the Holders of the Class R-III Certificates.
On the Distribution Date immediately following the end of the
Funding Period, the Trustee shall distribute any amounts remaining in the
Pre-Funding Account to the Holders of the
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Certificates then entitled to distributions in respect of principal in reduction
of the Certificate Principal Balance of such Certificates.
(b) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans or any Master Servicer Prepayment Charge
Payment Amount and shall distribute such amounts to the Holders of the Class P
Certificates. Such distributions shall not be applied to reduce the Certificate
Principal Balance of the Class P Certificates.
(c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance of
such Class of Certificates, or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.
Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(d) The rights of the Certificateholders to receive distributions
in respect of the Certificates, and all interests of the Certificateholders in
such distributions, shall be as set forth in this Agreement. Neither the Holders
of any Class of Certificates nor the Trustee nor the Master Servicer shall in
any way be responsible or liable to the Holders of any other Class of
Certificates in respect of amounts properly previously distributed on the
Certificates.
(e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution
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Date, the Trustee shall, no later than five (5) days after the related
Determination Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution with respect to
such Class of Certificates will be made on such Distribution Date, but
only upon presentation and surrender of such Certificates at the office
of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from and after the
end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non- tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 4.01(e) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining
non-tendering Certificateholders concerning surrender of their Certificates but
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in such trust fund. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to Xxxxxxx Xxxxx Xxxxxx Inc. all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(e).
(f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.04 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC I Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC I Regular
Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC I Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.
SECTION 4.02. Statements to Certificateholders.
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On each Distribution Date, the Trustee shall prepare and make
available to each Holder of the Regular Certificates, a statement as to the
distributions made on such Distribution Date setting
forth:
(i) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
principal, and the amount of distribution made on such
Distribution Date to the Holders of the Class P Certificates
allocable to Prepayment Charges;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
interest;
(iii) the aggregate Servicing Fee received by the Master Servicer
during the related Due Period and such other customary information
as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(iv) the aggregate amount of P&I Advances for such Distribution
Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans
and any REO Properties as of the close of business on such
Distribution Date;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of
the Mortgage Loans as of the related Due Date and the number and
aggregate principal balance of all Subsequent Mortgage
Loans added during the preceding Due Period;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89
days, (c) delinquent 90 or more days in each case, as of the last
day of the preceding calendar month, (d) as to which foreclosure
proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable
bankruptcy laws, with respect to whom bankruptcy proceedings are
pending or with respect to whom bankruptcy protection is in force;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of
such Mortgage Loan, the unpaid principal balance and the Stated
Principal Balance of such Mortgage Loan as of the date it became
an REO Property;
(ix) the book value and the Stated Principal Balance of any REO
Property as of the close of business on the last Business Day of
the calendar month preceding the Distribution Date;
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(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Prepayment Period (or, in the case of Bankruptcy Losses
allocable to interest, during the related Due Period), separately
identifying whether such Realized Losses constituted Bankruptcy
Losses and the aggregate amount of Realized Losses incurred since
the Closing Date;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Collection Account or the Distribution Account
for such Distribution Date;
(xiii) the aggregate Certificate Principal Balance of the each
Class of Certificates, after giving effect to the distributions,
and allocations of Realized Losses, made on such Distribution
Date, separately identifying any reduction thereof due to
allocations of Realized Losses;
(xiv) the Certificate Factor for each such Class of Certificates
applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the Class A
Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date and the Interest Carry
Forward Amount, if any, with respect to the Class A Certificates
and the Mezzanine Certificates on such Distribution Date, and in
the case of the Class A Certificates, the Mezzanine Certificates
and the Class CE Certificates, separately identifying any
reduction thereof due to allocations of Realized Losses,
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls;
(xvi) the aggregate amount of any Prepayment Interest Shortfall
for such Distribution Date, to the extent not covered by payments
by the Master Servicer pursuant to Section 3.24;
(xvii) the aggregate amount of Relief Act Interest Shortfalls for
such Distribution Date;
(xviii) the Required Overcollateralized Amount and the Credit
Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for such
Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for such
Distribution Date;
(xxi) with respect to any Mortgage Loan as to which foreclosure
proceedings have been concluded, the loan number and unpaid
principal balance of such Mortgage Loan as of the date of such
conclusion of foreclosure proceedings;
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(xxii) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the unpaid
principal balance of such Mortgage Loans as of the date of such
Final Liquidation and the amount of proceeds (including
Liquidation Proceeds and Insurance Proceeds) collected in respect
of such Mortgage Loans; and
(xxiii) the respective Pass-Through Rates applicable to the Class
A Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date and the Pass-Through Rate
applicable to the Class A Certificates and the Mezzanine
Certificates for the immediately succeeding Distribution Date.
(xxiv) the amount on deposit in the Pre-Funding Account and the
Interest Coverage Account;
(xxv) for the distribution occurring on the Distribution Date
immediately following the end of the Funding Period, the current
balance on deposit in the Pre-Funding Account that has not been
used to purchase Subsequent Mortgage Loans and that is being
distributed to the Class A-1 Certificateholders as a mandatory
prepayment of principal, if any, on such Distribution Date;
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website and its fax-on-demand service. The Trustee's
fax-on-demand service may be accessed by calling (000) 000-0000. The Trustee's
internet website shall initially be located at "xxx.xxxxxxx.xxx". Assistance in
using the website or the fax-on- demand service can be obtained by calling the
Trustee's customer service desk at (000) 000-0000. Parties that are unable to
use the above distribution options are entitled to have a paper copy mailed to
them via first class mail by calling the customer service desk and indicating
such. The Trustee shall have the right to change the way such statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes.
In the case of information furnished pursuant to subclauses (i)
through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Holder of a Regular Certificate a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
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Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Holder of a Residual Certificate a statement setting forth
the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared by the Trustee and
furnished to such Holders pursuant to the rules and regulations of the Code as
are in force from time to time.
The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Master Servicer.
On each Distribution Date the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.
SECTION 4.03. Remittance Reports; P&I Advances.
(a) On the Master Servicer Remittance Date, the Master Servicer
shall deliver to the Trustee by telecopy (or by such other means as the Master
Servicer and the Trustee may agree from time to time) a Remittance Report with
respect to the related Distribution Date. Such Remittance Report will include
(i) the amount of P&I Advances to be made by the Master Servicer in respect of
the related Distribution Date, the aggregate amount of P&I Advances outstanding
after giving effect to such P&I Advances, and the aggregate amount of
Nonrecoverable P&I Advances in respect of such Distribution Date and (ii) such
other information with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.02. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
On or prior to each Master Servicer Remittance Date, the Master
Servicer shall provide in an electronic format acceptable to the Trustee the
data necessary for the Trustee to perform its verification duties set forth in
this Section 4.03(a). The Trustee or a third party reasonably acceptable to the
Trustee and the Depositor (the "Verification Agent") will perform such
verification duties and will use its best efforts to issue its findings in a
report (the "Verification Report") within ten (10) Business Days following the
Master Servicer Remittance Date; provided, however, that if the Verification
Agent is unable to issue the Verification Report within ten (10) Business Days
following the Master Servicer Remittance Date, the Verification Agent may issue
the Verification Report upon the completion of its verification duties. The
Trustee shall forward the Verification Report to the Master Servicer and shall
notify the Master Servicer if the Trustee has determined that
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the Master Servicer did not deliver the appropriate Prepayment Charges to the
Trustee in accordance with Section 3.10 and Schedule 2 hereof. Such written
notification from the Trustee shall include the loan number, prepayment penalty
code and prepayment penalty amount as calculated by the Trustee or the
Verification Agent, as applicable, of each Mortgage Loan for which there is a
discrepancy. If the Master Servicer agrees with the verified amounts, the Master
Servicer shall adjust the immediately succeeding Remittance Report and the
amount remitted to the Trustee with respect to prepayments accordingly. If the
Master Servicer disagrees with the determination of the Trustee, the Master
Servicer shall, within five (5) Business Days of its receipt of the Verification
Report, notify the Trustee of such disagreement and provide the Trustee with
detailed information to support the Master Servicer's position. The Master
Servicer and the Trustee shall cooperate to resolve any discrepancy on or prior
to the immediately succeeding Master Servicer Remittance Date, and the Master
Servicer will indicate the effect of such resolution on the related Remittance
Report and shall adjust the amount remitted with respect to prepayments on such
Master Servicer Remittance Date accordingly. During such time as the Master
Servicer and the Trustee are resolving discrepancies with respect to the
Prepayment Charges, no payments in respect of any disputed Prepayment Charges
will be remitted to the Collection Account and the Trustee shall not be
obligated to remit such payments, unless otherwise required pursuant to Section
7.02 hereof.
In connection with such duties, the Trustee shall be able to rely
solely on the information provided to it by the Master Servicer and any
Verification Agent in accordance with this Section. The Trustee shall not be
responsible for verifying the accuracy of any of the information provided to it
by the Master Servicer or the Verification Agent. The costs of such
verification, whether performed by the Trustee or any third party on behalf of
the Trustee, shall be paid by the Trustee. Anything to the contrary herein
notwithstanding, the verification procedures set forth in this Section shall not
be performed after the securities relating to any resecuritization of the Class
P Certificates have been paid in full.
(b) The amount of P&I Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.03(d), the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.23 for
distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection
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Account that amounts held for future distribution have been, as permitted by
this Section 4.03, used by the Master Servicer in discharge of any such P&I
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of P&I Advances to be made by the Master Servicer with respect to
the Mortgage Loans and REO Properties. Any amounts held for future distribution
and so used shall be appropriately reflected in the Master Servicer's records
and replaced by the Master Servicer by deposit in the Collection Account on or
before any future Master Servicer Remittance Date to the extent that the
Available Distribution Amount for the related Distribution Date (determined
without regard to P&I Advances to be made on the Master Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date
if such amounts held for future distributions had not been so used to make P&I
Advances. The Trustee will provide notice to the Master Servicer by telecopy by
the close of business on any Master Servicer Remittance Date in the event that
the amount remitted by the Master Servicer to the Trustee on such date is less
than the P&I Advances required to be made by the Master Servicer for the related
Distribution Date.
(c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from REMIC I pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder by the Master Servicer if such
P&I Advance would, if made, constitute a Nonrecoverable P&I Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or that any proposed P&I Advance, if made, would constitute a
Nonrecoverable P&I Advance, shall be evidenced by an Officers' Certificate of
the Master Servicer delivered to the Depositor and the Trustee.
SECTION 4.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses and (iii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. Prior to each Determination Date, the Master Servicer shall also
determine as to each Mortgage Loan: (A) the total amount of Realized Losses, if
any, incurred in connection with any Deficient Valuations made during the
related Prepayment Period and (B) the total amount of Realized Losses, if any,
incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the Trustee by the Master
Servicer prior to the Determination Date immediately following the end of (x) in
the case of Bankruptcy Losses allocable to interest, the Due Period during which
any such Realized Loss was incurred, and (y) in the case of all other Realized
Losses, the Prepayment Period during which any such Realized Loss was incurred.
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(b) All Realized Losses on the Mortgage Loans allocated to any
REMIC II Regular Interest pursuant to Section 4.04(c), shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero and sixth, to
the Class A-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.
Any allocation of Realized Losses to a Class A-2 Certificate or a
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated, or in the case
of a Class CE Certificate, by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(a)(4)(x). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class A-1
Certificates or the Class P Certificates.
As used herein, an allocation of a Realized Loss on a "PRO RATA
basis" among two or more specified Classes of Certificates means an allocation
on a PRO RATA basis, among the various Classes so specified, to each such Class
of Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(c) All Realized Losses on the Mortgage Loans shall be allocated
by the Trustee on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC I Regular Interest I-LT1 and REMIC I Regular
Interest I-LT7 up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT7 up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of REMIC
I Regular Interest I-LT1, REMIC I Regular Interest I-LT6 and REMIC I Regular
Interest I-LT7, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LT6 has been reduced to zero; fourth, to the
Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I Regular
Interest I-LT5 and REMIC I Regular Interest I-LT7, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC I Regular Interest I-LT5 has been
reduced to zero; fifth, to the Uncertificated Balances of REMIC I Regular
Interest I-LT1, REMIC I Regular Interest I-LT4 and REMIC I Regular Interest
I-LT7, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LT4 has been reduced to zero and sixth, to the
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Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I Regular
Interest I-LT3 and REMIC I Regular Interest I-LT7, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC I Regular Interest I-LT3 has been
reduced to zero.
(d) All Realized Losses on the REMIC II Regular Interests shall be
allocated by the Trustee on each Distribution Date among the REMIC II Regular
Interests in the proportion that Realized Losses are allocated to the related
Uncertificated Corresponding Component.
As used herein, an allocation of a Realized Loss on a "PRO RATA
basis" among the REMIC I Regular Interests (other than REMIC I Regular Interest
I-LTP) means an allocation on a PRO RATA basis among the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) on the basis of their then
outstanding Uncertificated Balances, in each case prior to giving effect to
distributions to be made on such Distribution Date.
SECTION 4.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.06. Commission Reporting.
Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2001, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to November 30, 2000, the Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. At least three Business Days prior to filing any
Form 8-K or Form 10-K pursuant to this Section 4.06, the Trustee shall deliver a
copy of such Form 8-K or Form 10-K, as the case may be, to the Depositor. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission.
SECTION 4.07. Pre-Funding Account.
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(a) No later than the Closing Date, the Trustee shall establish
and maintain a segregated trust account that is an Eligible Account, which shall
be titled "Pre-Funding Account, Norwest Bank Minneosta, National Association as
Trustee for the registered holders of Salomon Brothers Mortgage Securities VII,
Inc., Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2" (the
"Pre-Funding Account"). The Trustee shall, promptly upon receipt, deposit in the
Pre-Funding Account and retain therein the Original Pre-Funded Amount remitted
on the Closing Date to the Trustee by the Depositor. Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.
(b) The Trustee will invest funds deposited in the Pre-Funding
Account in Permitted Investments of the kind described in clauses (i) or (vi) of
the definition of Permitted Investments, as directed by the Master Servicer,
with a maturity date no later than the second Business Day preceding each
Distribution Date. For federal income tax purposes, the holder of the largest
Percentage Interest of the Residual Certificates shall be the owner of the
Pre-Funding Account and shall report all items of income, deduction, gain or
loss arising therefrom. All income and gain realized from investment of funds
deposited in the Pre-Funding Account shall be transferred to the Interest
Coverage Account on the Business Day immediately preceding each Distribution
Date. The Master Servicer shall deposit in the Pre-Funding Account the amount of
any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss without any right of reimbursement therefor. Prior
to the Distribution Date immediately following the end of the Funding Period or
any earlier Subsequent Transfer Date on which the entire balance of the Original
Pre-Funded Amount is applied to purchase Subsequent Mortgage Loans, the
Pre-Funding Account will not be an asset of any of REMIC I, REMIC II or REMIC
III.
(c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw
from the Pre- Funding Account an amount equal to 100% of the
Stated Principal Balances of the Subsequent Mortgage Loans
transferred and assigned to the Trustee for deposit in the
Mortgage Pool on such Subsequent Transfer Date and pay such amount
to or upon the order of the Depositor upon satisfaction of the
conditions set forth in Section 2.11 with respect to such transfer
and assignment;
(ii) if the amount on deposit in the Pre-Funding Account has not
been reduced to zero during the Funding Period, on the day
immediately following the termination of the Funding Period, the
Trustee shall deposit into the Distribution Account any amounts
remaining in the Pre-Funding Account, net of any gain realized
from the investment of funds on deposit therein to the extent not
previously paid to the Master Servicer, for distribution in
accordance with the terms hereof;
(iii) to withdraw any amount not required to be deposited in the
Pre-Funding Account or deposited therein in error;
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(iv) to distribute to the Master Servicer any income and gain
realized from the investment of funds in the Pre-Funding Account;
and
(v) to clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately
following the end of the Funding Period and (B) the termination of
this Agreement, with any amounts remaining on deposit therein
being paid to the Holders of the Certificates then entitled to
distributions in respect of principal.
SECTION 4.08. Interest Coverage Account.
(a) No later than the Closing Date, the Trustee shall establish
and maintain a segregated trust account that is an Eligible Account, which shall
be titled "Interest Coverage Account, Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of Salomon Brothers Mortgage
Securities VII, Inc., Floating Rate Mortgage Pass-Through Certificates, Series
1999-AQ2" (the "Interest Coverage Account"). The Trustee shall, promptly upon
receipt, deposit in the Interest Coverage Account and retain therein the
Interest Coverage Amount remitted on the Closing Date to the Trustee by the
Depositor. Funds deposited in the Interest Coverage Account shall be held in
trust by the Trustee for the Certificateholders for the uses and purposes set
forth herein.
(b) The Trustee will invest funds deposited in the Interest
Coverage Account in Permitted Investments of the kind described in clauses (i)
or (vi) of the definition of Permitted Investments, as directed by the Master
Servicer, with a maturity date no later than the second Business Day preceding
each Distribution Date. For federal income tax purposes, the holder of the
largest Percentage Interest of the Residual Certificates shall be the owner of
the Interest Coverage Account and shall report all items of income, deduction,
gain or loss arising therefrom. At no time will the Interest Coverage Account be
an asset of any of REMIC I, REMIC II or REMIC III. All income and gain realized
from investment of funds deposited in the Interest Coverage Account shall be for
the sole and exclusive benefit of the Master Servicer and shall be remitted by
the Trustee to the Master Servicer on the first Business Day following each
Remittance Date. The Master Servicer shall deposit in the Interest Coverage
Account the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss.
(c) With respect to each Distribution Date during the Funding
Period and on the Distribution Date immediately following the end of the Funding
Period, the Trustee shall withdraw from the Interest Coverage Account and
deposit in the Distribution Account an amount, as provided in the related
Remittance Report, equal to (i) 30 days' interest on the Original Pre-Funded
Amount calculated at an annual rate equal to the weighted average of the Net
Mortgage Rates of the Mortgage Loans in the Trust Fund as of the commencement of
the related Due Period, minus (ii) the sum of (1) any interest payments received
by the Master Servicer on Subsequent Mortgage Loans during the related Due
Period and (2) any P&I Advance in respect of the interest portion of delinquent
Monthly Payments on the Subsequent Mortgage Loans conveyed to the Trustee during
the related Due Period.
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(d) Upon the earlier of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balance of the Class A Certificates and the Mezzanine Certificates to
zero or (iii) the termination of this Agreement in accordance with Section 9.01,
any amount remaining on deposit in the Interest Coverage Account after
distributions pursuant to paragraph (c) above shall be withdrawn by the Trustee
and paid to the Depositor or its designee.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal
Balance of the Mortgage Loans.
The Certificates will be substantially in the forms annexed hereto
as Exhibits A-1 through A-10. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed and
delivered by the Trustee, and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Certificate Registrar by manual
signature, and such certificate of authentication shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
(b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates held by the Book-Entry Custodian
or, if appointed to hold such Certificates as provided below, the Depository and
registered in the name of the Depository or its nominee and, except as provided
below, registration of such Certificates may not be transferred by the Trustee
except to another Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. The Certificate
Owners shall hold their respective Ownership Interests in and to such
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance
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herewith and in accordance with the agreement that it has with the Depository
authorizing it to act as such. The Book-Entry Custodian may, and if it is no
longer qualified to act as such, the Book- Entry Custodian shall, appoint, by a
written instrument delivered to the Depositor, the Master Servicer, the Trustee
(if the Trustee is not the Book-Entry Custodian) and any other transfer agent
(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any such appointment of other than the Depository.
If the Trustee resigns or is removed in accordance with the terms hereof, the
successor trustee or, if it so elects, the Depository shall immediately succeed
to its predecessor's duties as Book-Entry Custodian. The Depositor shall have
the right to inspect, and to obtain copies of, any Certificates held as Book-
Entry Certificates by the Book-Entry Custodian.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book- Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $10,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Master Servicer or the Trustee shall be liable for any delay in the delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and
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performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders
hereunder.
SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at one of the offices or
agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.
(b) No transfer of any Class CE Certificate, Class P Certificate
or Residual Certificate shall be made unless that transfer is made pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification. In the event that such a transfer of
a Class CE Certificate, Class P Certificate or Residual Certificate is to be
made without registration or qualification (other than in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee and the Certificate Registrar shall each require receipt
of: (i) if such transfer is purportedly being made in reliance upon Rule 144A
under the 1933 Act, written certifications from the Certificateholder desiring
to effect the transfer and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration or qualification (which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee, the Master Servicer, in its
capacity as such, or the Trust Fund), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. None of the Depositor, the Certificate Registrar or
the Trustee is obligated to register or qualify the Class CE Certificates, the
Class P Certificates or the Residual Certificates under the 1933 Act or any
other securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a Class
CE Certificate, a Class P Certificate or a Residual Certificate shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
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(c) (i) No transfer of a Class A-2 Certificate or Mezzanine
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Depositor,
the Master Servicer and the Trustee are provided with an Opinion of Counsel
which establishes to the satisfaction of the Depositor, the Trustee and the
Master Servicer that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Master Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee or
the Trust Fund. In lieu of such Opinion of Counsel, any prospective Transferee
of such Certificates may provide a certification (which the Transferee will be
deemed to have represented such certification) of the foregoing in the form of
Exhibit G to this Agreement (or other form acceptable to the Depositor, the
Trustee and the Master Servicer), which the Trustee may rely upon without
further inquiry or investigation. An Opinion of Counsel, any certification or a
deemed representation will not be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor. The Transferee of a Class A-2 Certificate or a
Mezzanine Certificate that is a Plan, a Person acting, directly or indirectly,
on behalf of any such Plan or a person using Plan Assets to acquire Class A-2
Certificates or Mezzanine Certificates will be deemed to have represented that
such acquisition is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under ERISA or Section 4975 of
the Code, will not subject the Depositor, the Master Servicer, the Trusteee or
the Trust Fund to any obligation in addition to those undertaken in this
Agreement and the following conditions are met: (a) the source of funds used to
purchase such Class A-2 Certificates or Mezzanine Certificates is an "insurance
company general account" (as such term is defined in PTCE 95-60), (b) the
conditions set forth in PTCE 95-60 have been satisfied and (c) there is no Plan
with respect to which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer (or any "affiliate" thereof, as defined in PTCE
95-60) or by the same employee organization exceed 10% of the total of all
reserves and liabilities of such general account (as determined under PTCE
95-60) as of the date of the acquisition of such Class A-2 Certificates or
Mezzanine Certificates.
(ii) No transfer of a Class CE Certificate, Class P
Certificate or Residual Certificate or any interest therein shall be made to any
Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly
or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets")
unless the Depositor, the Master Servicer and the Trustee are provided with an
Opinion of Counsel which establishes to the satisfaction of the Depositor, the
Trustee and the Master Servicer that the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
prohibited
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transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Trustee or the Trust Fund to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Master Servicer, the
Trustee or the Trust Fund.
(d) (i) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably authorized the Trustee or its designee under clause
(iii)(A) below to deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of Transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate, the Trustee
shall require delivery to it and shall not register the
Transfer of any Residual Certificate until its receipt of an
affidavit and agreement (a "Transfer Affidavit and
Agreement"), in the form attached hereto as Exhibit F-2 from
the proposed Transferee, in form and substance satisfactory to
the Trustee, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate
that is the subject of the proposed Transfer as a nominee,
trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate, it will endeavor to remain
a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(d) and agrees to be bound by
them.
(C) Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause (B) above,
if a Responsible Officer of the Trustee who is assigned to
this transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Residual Certificate to such proposed
Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (x) to require
a Transfer Affidavit and Agreement from any other Person to
whom such Person attempts to transfer its Ownership Interest
in a Residual Certificate and (y) not to transfer its
Ownership Interest unless it provides a Transferor Affidavit
(in the form attached hereto as Exhibit F-2), to the Trustee
stating that, among other things, it has no actual knowledge
that such other Person is not a Permitted Transferee.
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(E) Each Person holding or acquiring an Ownership Interest
in a Residual Certificate, by purchasing an Ownership Interest
in such Certificate, agrees to give the Trustee written notice
that it is a "pass-through interest holder" within the meaning
of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring an Ownership Interest in a Residual
Certificate, if it is, or is holding an Ownership Interest in
a Residual Certificate on behalf of, a "pass-through interest
holder."
(ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit
and Agreement and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such
registration. In addition, no Transfer of a Residual Certificate
shall be made unless the Trustee shall have received a
representation letter from the Transferee of such Certificate to
the effect that such Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this
Section 5.02(d), then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights
as holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. The Trustee shall be under
no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section
5.02(d) or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such
holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder of a
Residual Certificate in violation of the restrictions in this
Section 5.02(d) and to the extent that the retroactive restoration
of the rights of the holder of such Residual Certificate as
described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Trustee shall have the right, without
notice to the holder or any prior holder of such Residual
Certificate, to sell such Residual Certificate to a purchaser
selected by the Trustee on such terms as the Trustee may choose.
Such purported Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the instructions of the
Trustee. Such purchaser may be the Trustee itself or any Affiliate
of the Trustee. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Trustee or its
Affiliates), expenses and taxes due, if any, will be remitted by
the Trustee to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in the
sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions all
information necessary to compute any tax imposed (A) as a result
of the Transfer of an Ownership Interest in a Residual Certificate
to any Person who is a Disqualified Organization, including the
information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with
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respect to the "excess inclusions" of such Residual Certificate
and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Residual Certificate having as
among its record holders at any time any Person which is a
Disqualified Organization. Reasonable compensation for providing
such information may be accepted by the Trustee.
(v) The provisions of this Section 5.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated,
provided that there shall have been delivered to the Trustee at
the expense of the party seeking to modify, add to or eliminate
any such provision the following:
(A) written notification from each Rating Agency to the
effect that the modification, addition to or elimination of
such provisions will not cause such Rating Agency to downgrade
its then-current ratings of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee, to the effect that such
modification of, addition to or elimination of such provisions
will not cause any of REMIC I, REMIC II or REMIC III to
cease to qualify as a REMIC and will not cause any of REMIC
I, REMIC II or REMIC III, as the case may be, to be subject
to an entity-level tax caused by the Transfer of any
Residual Certificate to a Person that is not a Permitted
Transferee or (y) a Person other than the prospective
transferee to be subject to a REMIC-tax caused by the
Transfer of a Residual Certificate to a Person that is not a
Permitted Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute and cause the Certificate Registrar to
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made for
any transfer or exchange of Certificates, but the Trustee may require payment of
a sum sufficient to cover any tax
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or governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall
be canceled and destroyed by the Certificate Registrar in accordance with its
customary procedures.
(i) The Trustee will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide notice to the Trustee of
each transfer of a Certificate and to provide the Trustee with an updated copy
of the Certificate Register on the first Business Day in January and
June of each year, commencing in January 2000.
(j) Any attempted or purported transfer of any Certificate in
violation of the provisions of Section 5.02(c) hereof shall be void ab initio
and such Certificate shall be considered to have been
held continuously by the prior permitted Holder.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee or
the Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
the same Class and of like denomination and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the Depositor, the Master Servicer, the Trustee, the
Certificate Registrar or any agent of any of them shall be affected by notice to
the contrary.
SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor
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in connection with the offer and sale of the Class CE Certificates, Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate or any Person identified to the
Trustee as a prospective transferee of a Certificate, originals or copies of the
following items: (i) in the case of a Holder or prospective transferee of a
Class CE Certificate, a Class P Certificate or a Residual Certificate, the
private placement memorandum or other disclosure document relating to such
Certificates, if any, in the form most recently provided to the Trustee; and
(ii) in all cases, (A) this Agreement and any amendments hereof entered into
pursuant to Section 11.01, (B) all monthly statements required to be delivered
to Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 10.01(h), (D) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date to evidence the
Master Servicer's determination that any P&I Advance was, or if made, would be a
Nonrecoverable P&I Advance and (E) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date pursuant to Section
4.04(a). Copies and mailing of any and all of the foregoing items will be
available from the Trustee upon request at the expense of the person requesting
the same.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Xxxxxx Xxx or Xxxxxxx Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
The Depositor or the Master Servicer may be merged or consolidated
with or into any Person, or transfer all or substantially all of its assets to
any Person, in which case any Person resulting from any merger or consolidation
to which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Mae or Xxxxxxx Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor,
the Master Servicer and Others.
None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of
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willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer may rely in good faith on any document of any
kind which, PRIMA FACIE, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer and
any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, in its opinion, does not involve it
in any expense or liability; provided, however, that each of the Depositor and
the Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, unless the Depositor or the Master Servicer acts
without the consent of Holders of Certificates entitled to at least 51% of the
Voting Rights (which consent shall not be necessary in the case of litigation or
other legal action by either to enforce their respective rights or defend
themselves hereunder), the legal expenses and costs of such action and any
liability resulting therefrom (except any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Master Servicer shall be entitled to be reimbursed therefor
from the Collection Account as and to the extent provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Collection Account.
SECTION 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee and written confirmation from each Rating Agency
(which confirmation shall be furnished to the Depositor and the Trustee) that
such resignation will not cause such Rating Agency to reduce the then current
rating of the Class A Certificates or the Mezzanine Certificates. Any such
determination pursuant to clause (i) of the preceding sentence permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect obtained at the expense of the Master Servicer and delivered to
the Trustee. No resignation of the Master Servicer shall become effective until
the Trustee or a successor servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, nor delegate to or subcontract with,
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nor authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Master Servicer hereunder. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of the Servicing
Fee and other compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer.
SECTION 6.05. Rights of the Depositor in Respect of the
Master Servicer.
The Master Servicer shall afford (and any Sub-Servicing Agreement
shall provide that each Sub-Servicer shall afford) the Depositor and the
Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub- Servicer's) most recent financial
statements and such other information relating to the Master Servicer's capacity
to perform its obligations under this Agreement that it possesses. To the extent
such information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's (or any such Sub-Servicer's) written
consent, except as required pursuant to this Agreement or to the extent that it
is appropriate to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in either case, the Depositor or
the Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure by the Master Servicer to remit to the Trustee
for distribution to the Certificateholders any payment (other than
a P&I Advance required to be made from its own funds on any Master
Servicer Remittance Date pursuant to Section 4.03) required to be
made under the terms of the Certificates and this Agreement which
continues unremedied for a period of one Business Day after the
date upon which written notice of such failure, requiring the same
to be remedied, shall have been given to the Master Servicer by
the Depositor or the Trustee (in which case notice shall be
provided by telecopy), or to the Master Servicer, the Depositor
and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any of the covenants or
agreements on the part of the Master Servicer contained in the
Certificates or in this Agreement (or, if the Master Servicer is
the Originator, the failure of the Originator to repurchase a
Mortgage Loan as to which a breach has been established that
requires a repurchase pursuant to the terms of Section 7 of the
Mortgage Loan Purchase Agreement) which continues unremedied for a
period of 45 days after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor or
the Trustee, or to the Master Servicer, the Depositor and the
Trustee by the Holders of Certificates entitled to at least 25% of
the Voting Rights and (ii) actual knowledge of such failure by a
Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary
case under any present or future federal or state bankruptcy,
insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceeding, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and if such proceeding is
being contested by the Master Servicer in good faith, such decree
or order shall have remained in force undischarged or unstayed for
a period of 60 days or results in the entry of an order for relief
or any such adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
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(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vi) any failure by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make any P&I Advance
on any Master Servicer Remittance Date required to be made from
its own funds pursuant to Section 4.03 which continues unremedied
until 3:00 p.m. New York time on the Business Day immediately
following the Master Servicer Remittance Date.
If a Master Servicer Event of Default described in clauses (i) through (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee or
to the Trustee if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section
and, without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver on behalf of and at the
expense of the Master Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of P&I Advances or otherwise,
and shall continue to be entitled to the benefits of Section 6.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.01, the Trustee shall not be
deemed to
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have knowledge of a Master Servicer Event of Default unless a Responsible
Officer of the Trustee assigned to and working in the Trustee's Corporate Trust
Office has actual knowledge thereof or unless written notice of any event which
is in fact such a Master Servicer Event of Default is received by the Trustee
and such notice references the Certificates, REMIC I or this Agreement.
The Trustee shall be entitled to be reimbursed by the Master Servicer
(or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) its obligation to deposit amounts in
respect of losses pursuant to Section 3.12) by the terms and provisions hereof
including, without limitation, the Master Servicer's obligations to make P&I
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, the Trustee
shall be entitled to the Servicing Fee and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding the
above and subject to the next paragraph, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans, or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to each Rating Agency and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. No appointment of a successor to the
Master Servicer under this Agreement shall be effective until the assumption by
the successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans
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as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.
Upon removal or resignation of the Master Servicer, the Trustee,
with the cooperation of the Depositor, (x) shall solicit bids for a successor
Master Servicer as described below and (y) pending the appointment of a
successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the Servicing Fee. Within thirty days after any
such public announcement, the Trustee, with the cooperation of the Depositor,
shall negotiate in good faith and effect the sale, transfer and assignment of
the servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid as to the price they will pay to obtain
such servicing. The Trustee upon receipt of the purchase price shall pay such
purchase price to the Master Servicer being so removed, after deducting from any
sum received by the Trustee from the successor to the Master Servicer in respect
of such sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities reasonably incurred hereunder. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Master Servicer at the
time of such sale.
(b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such
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advance, without interest, by withdrawing from the Distribution Account, out of
amounts on deposit therein, an amount equal to the portion of such advance
attributable to the Stayed Funds.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register.
(b) Not later than the later of 60 days after the occurrence of
any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.
SECTION 7.04. Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Master
Servicer Event of Default hereunder may waive such default or Master Servicer
Event of Default; provided, however, that a default or Master Servicer Event of
Default under clause (i) or (vii) of Section 7.01 may be waived only by all of
the Holders of the Regular Certificates. Upon any such waiver of a default or
Master Servicer Event of Default, such default or Master Servicer Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other
default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing of all Master Servicer Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. During a Master Servicer Event of
Default, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event of
Default, and after the curing of all such Master Servicer Events
of Default which may have occurred, the duties and obligations of
the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Trustee and, in the
absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee that conform to
the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
Certificates entitled to at least 25% of the Voting Rights
relating to the time,
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method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of a Master Servicer Event of
Default (which has not been cured or waived), to exercise such of
the rights and powers vested in it by this Agreement, and to use
the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the
conduct of such person's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing of all Master Servicer
Events of Default which may have occurred, the Trustee shall not
be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing to do so
by the Holders of Certificates entitled to at least 25% of the
Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by such Certificateholders, the Trustee may
require reasonable indemnity against such expense, or liability
from such Certificateholders as a condition to taking any such
action;
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(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys; and
(vii) The Trustee shall not be personally liable for any loss
resulting from the investment of funds held in the Collection
Account at the direction of the Master Servicer pursuant to
Section 3.12.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the signature of the Trustee, the authentication of the Certificate Registrar on
the Certificates, the acknowledgments of the Trustee contained in Article II and
the representations and warranties of the Trustee in Section 8.12) shall be
taken as the statements of the Depositor and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.12) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity may
become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
(a) The Trustee shall withdraw from the Distribution Account on
each Distribution Date and pay to itself the Trustee Fee and, to the extent that
the funds therein are at anytime insufficient for such purpose, the Depositor
shall pay such fees. The Trustee, or any director, officer, employee or agent of
the Trustee, shall be indemnified by REMIC I and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee, including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee in connection with any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or
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expense (i) resulting from the Master Servicer's actions or omissions in
connection with this Agreement and the Mortgage Loans, (ii) that constitutes a
specific liability of the Trustee pursuant to Section 10.01(c) or (iii) any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or as a result of a breach of the
Trustee's obligations under Article X hereof. It is understood by the parties
hereto that a "claim" as used in the preceding sentence includes any claim for
indemnification made by the Custodian under Section 3.2 of the Custodial
Agreement. Any amounts payable to the Trustee, or any director, officer,
employee or agent of the Trustee, in respect of the indemnification provided by
this paragraph (a), or pursuant to any other right of reimbursement from the
Trust Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.
(b) The Master Servicer agrees to indemnify the Trustee from, and
hold it harmless against, any loss, liability or expense resulting from a breach
of the Master Servicer's obligations and duties under this Agreement. Such
indemnity shall survive the termination or discharge of this Agreement and the
resignation or removal of the Trustee. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from the Trust Fund therefor.
(c) The Trustee shall pay any annual rating agency fees of DCR,
Xxxxx'x and S&P for ongoing surveillance from its own funds without right of
reimbursement.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or an
association (other than the Depositor, the Seller, the Mortgage Loan Transferor,
the Master Servicer or any Affiliate of the foregoing) organized and doing
business under the laws of any state or the United States of
America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the
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Master Servicer by the Depositor. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder (other than any Mortgage Files at the time held by a Custodian,
which Custodian shall become the agent of any successor trustee hereunder), and
the Depositor and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
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Upon acceptance of appointment by a successor trustee as provided
in this Section, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Depositor fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC I or property securing the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of REMIC I, and to
vest in such Person or Persons, in such capacity, such title to REMIC I, or any
part thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Master Servicer Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (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
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of
them.
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Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trust conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Depositor and the Master
Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement. The Trustee initially appoints the Custodian as
Custodian, and the Depositor and the Master Servicer consent to such
appointment. Subject to Article VIII hereof, the Trustee agrees to comply with
the terms of each Custodial Agreement and to enforce the terms and provisions
thereof against the Custodian for the benefit of the Certificateholders having
an interest in any Mortgage File held by such Custodian. Each Custodian shall be
a depository institution or trust company subject to supervision by federal or
state authority, shall have combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement may be amended only as provided in
Section 11.01. In no event shall the appointment of any Custodian pursuant to a
Custodial Agreement diminish the obligations of the Trustee hereunder.
SECTION 8.12. Appointment of Office or Agency.
The Trustee will appoint an office or agency in the City of New
York where the Certificates may be surrendered for registration of transfer or
exchange, and presented for final distribution, and where notices and demands to
or upon the Trustee in respect of the Certificates and
this Agreement may be served.
SECTION 8.13. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master Servicer
and the Depositor, as of the Closing Date, that:
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(i) The Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States.
(ii) The execution and delivery of this Agreement by the Trustee,
and the performance and compliance with the terms of this Agreement by
the Trustee, will not violate the Trustee's charter or bylaws or
constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of,
any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) The Trustee has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Master Servicer and the Depositor, constitutes a valid,
legal and binding obligation of the Trustee, enforceable against the
Trustee in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, receivership, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally,
and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith reasonable judgment, is likely to materially and adversely affect
either the ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or Liquidation
of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the greater of (A) the aggregate Purchase Price of all the
Mortgage Loans included in REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and the Trustee, as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 9.01); provided, however, that in the event
the Majority Class CE Certificateholder is the Terminator, the purchase by the
Majority Class CE Certificateholder of all Mortgage Loans and each REO Property
remaining in REMIC I shall be at the price designated in clause (A) above.
(b) The Majority Class CE Certificateholder shall have the right,
and to the extent the Majority Class CE Certificateholder does not exercise such
right, the Master Servicer, shall have the right (the party exercising such
right, the "Terminator"), to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) of the preceding paragraph
no later than the Determination Date in the month immediately preceding the
Distribution Date on which the Certificates will be retired; provided, however,
that the Terminator may elect to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) above only if the aggregate
Stated Principal Balance of the Mortgage Loans and each REO Property remaining
in the Trust Fund at the time of such election and any amounts on deposit in the
Pre-Funding Account is reduced to less than 10% of the sum of the aggregate
Stated Principal Balance of the Initial Mortgage Loans as of the Cut-off Date
and the Original Pre-Funded Amount. By acceptance of the Residual Certificates,
the Holders of the Residual Certificates agree, in connection with any
termination hereunder, to assign and transfer any amounts in excess of par, and
to the extent received in respect of such termination, to pay any such amounts
to the Holders of the Class CE Certificates.
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(c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day of the month next preceding the month of the final distribution on
the Certificates an amount in immediately available funds equal to the
above-described purchase price. Upon certification to the Trustee by a Servicing
Officer of the making of such final deposit, the Trustee shall promptly release
or cause to be released to the Terminator the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Xxxxxxx Xxxxx Xxxxxx
Inc. all such amounts, and all rights of non-tendering Certificateholders in or
to such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 9.01.
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Immediately following the deposit of funds in trust hereunder in
respect of the Certificates, the Trust Fund shall terminate.
SECTION 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the Mortgage
Loans and each REO Property or the final payment on or other liquidation of the
last Mortgage Loan or REO Property remaining in REMIC I pursuant to Section
9.01, the Trust Fund shall be terminated in accordance with the following
additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to REMIC I's, REMIC
II's and REMIC III's final Tax Return pursuant to Treasury
regulation Section 1.860F-1 and shall satisfy all requirements of
a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of REMIC I to the Terminator
for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to
be distributed or credited, to the Holders of the Residual
Certificates all cash on hand in the Trust Fund (other than cash
retained to meet claims), and the Trust Fund shall terminate at
that time.
(b) At the expense of the applicable Terminator (or in the event
of termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each of
REMIC I, REMIC II and REMIC III pursuant to this Section 9.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each of REMIC I, REMIC II and REMIC III, which authorization shall be
binding upon all successor Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall elect to treat each of REMIC I, REMIC II and
REMIC III as a REMIC under the Code and, if necessary, under applicable state
law. Each such election will be made on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, the REMIC
I Regular Interests shall be designated as the Regular Interests in REMIC I and
the Class R-I Certificates shall be designated as the Residual Interests in
REMIC I. The REMIC II Regular Interests shall be designated as the Regular
Interests in REMIC II and the Class R-II Certificates shall be designated as the
Residual Interests in REMIC II. The Class A Certificates, the Mezzanine
Certificates, the Class CE Certificates and the Class P Certificates shall be
designated as the Regular Interests in REMIC III and the Class R-III
Certificates shall be designated as the Residual Interests in REMIC III. The
Trustee shall not permit the creation of any "interests" in REMIC I, REMIC II or
REMIC III (within the meaning of Section 860G of the Code) other than the REMIC
I Regular Interests, the REMIC II Regular Interests and the interests
represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of
REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the
Code.
(c) The Trustee shall pay out of its own funds, without any right
of reimbursement, any and all expenses relating to any tax audit of the Trust
Fund (including, but not limited to, any professional fees or any administrative
or judicial proceedings with respect to any of REMIC I, REMIC II or REMIC III
that involve the Internal Revenue Service or state tax authorities), other than
the expense of obtaining any tax related Opinion of Counsel except as specified
herein. The Trustee, as agent for all of REMIC I's, REMIC II's and REMIC III's
tax matters person, shall (i) act on behalf of the Trust Fund in relation to any
tax matter or controversy involving any of REMIC I, REMIC II or REMIC III and
(ii) represent the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto. The holder of the largest Percentage Interest of each Class of
Residual Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as
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is in its possession and reasonably required by the Trustee to enable it to
perform its obligations under this Article.
(e) The Trustee shall perform on behalf of each of REMIC I, REMIC
II and REMIC III all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of REMIC I, REMIC II and REMIC
III. The Master Servicer shall provide on a timely basis to the Trustee such
information with respect to the assets of the Trust Fund, including, without
limitation, the Mortgage Loans, as is in its possession and reasonably required
by the Trustee to enable it to perform its obligations under this subsection. In
addition, the Depositor shall provide or cause to be provided to the Trustee,
within ten (10) days after the Closing Date, all information or data that the
Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.
(f) The Trustee shall take such action and shall cause each REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of REMIC I, REMIC II or REMIC III as a REMIC or (ii) result in the
imposition of a tax upon the Trust Fund (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, an "Adverse REMIC Event") unless the Trustee has received an Opinion
of Counsel, addressed to the Trustee (at the expense of the party seeking to
take such action but in no event at the expense of the Trustee) to the effect
that the contemplated action will not, with respect to any of REMIC I, REMIC II
or REMIC III, endanger such status or result in the imposition of such a tax,
nor shall the Master Servicer take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to REMIC I, REMIC II or REMIC III or the respective assets of each,
or causing REMIC I, REMIC II or REMIC III to take any action, which is not
contemplated under the terms of this Agreement, the Master Servicer will consult
with the Trustee or its designee, in writing, with respect to whether such
action could cause an Adverse REMIC Event to occur with respect to REMIC I,
REMIC II or REMIC III, and the Master Servicer shall not take any such action or
cause either REMIC I, REMIC II or REMIC III to take any such action as to which
the Trustee has advised it in writing that an Adverse REMIC Event
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could occur. The Trustee may consult with counsel to make such written advice,
and the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Trustee will
ensure that substantially all of the assets of both REMIC I and REMIC II will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing April
15, 2000, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each of REMIC I, REMIC II and REMIC III on a
calendar year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any of REMIC I, REMIC II or REMIC III other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause the
related REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject such REMIC to any tax under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into
any arrangement by which REMIC I, REMIC II or REMIC III will receive a fee or
other compensation for services nor permit any such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
SECTION 10.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall
sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to
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Article IX of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III of
this Agreement), nor acquire any assets for any of REMIC I, REMIC II or REMIC
III (other than REO Property acquired in respect of a defaulted Mortgage Loan),
nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to any of REMIC I,
REMIC II or REMIC III after the Closing Date (other than a Qualified Substitute
Mortgage Loan delivered in accordance with Section 2.03), unless it has received
an Opinion of Counsel, addressed to the Trustee (at the expense of the party
seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any of REMIC I, REMIC II or REMIC III as a REMIC or (b)
cause any of REMIC I, REMIC II or REMIC III to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor
and the Master Servicer for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee's
covenants set forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs including, without limitation,
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of a breach of the Master Servicer's
covenants set forth in Article III or this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian without the consent of any of the Certificateholders,
(i) to cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or in any Custodial Agreement, or (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
in any Custodial Agreement which shall not be inconsistent with the provisions
of this Agreement or such Custodial Agreement, provided that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder. No
amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Custodial Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner, other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66% of the Voting Rights allocated to such Class, or (iii)
modify the consents required by the immediately preceding clauses (i) and (ii)
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.01, Certificates
registered in the name of the Depositor or the Master Servicer or any Affiliate
thereof shall be entitled to Voting Rights with respect to matters affecting
such Certificates.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on any of REMIC I, REMIC II or REMIC III
pursuant to the REMIC Provisions or cause any of REMIC I, REMIC II or REMIC III
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
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It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement shall be construed in accordance with the laws of
the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance
with such laws.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Finance Group (telecopy number (000) 000-0000), or
such other address or telecopy number as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor, (b) in the case of
Ameriquest Mortgage Company, 0000 Xxxx & Xxxxxxx Xxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel (telecopy number: (000) 000-0000),
or such other address or telecopy number as may hereafter be furnished to the
Trustee and the Depositor in writing by Ameriquest Mortgage Company and (c) in
the case of the Trustee, 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Securities Administration Services (telecopy number (000) 000-0000),
with a copy to the Trustee at Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000, Attention: Corporate Trust Services (telecopy number (612)
832-3539), or such other address or telecopy number as may hereafter be
furnished to the Master Servicer and the Depositor in writing by the Trustee.
Any notice required or permitted to be given to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the
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Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide notice
to the Rating Agencies with respect to each of the following of which it has
actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that
has not been cured or waived;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to
or as contemplated by
Section 2.03;
5. The final payment to the Holders of any Class of Certificates;
6. Any change in the location of the Collection Account or the
Distribution Account;
7. Any event that would result in the inability of the Trustee,
were it to succeed as Master Servicer, to make advances
regarding delinquent Mortgage Loans; and
8. The filing of any claim under the Master Servicer's blanket
bond and errors and omissions insurance policy required by
Section 3.14 or the cancellation or material modification of
coverage under any such instrument.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer, as required pursuant to Section 3.20 and Section 3.21,
shall promptly furnish to each Rating Agency copies of the following:
1. Each annual statement as to compliance described in Section
3.20; and
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2. Each annual independent public accountants' servicing report
described in Section 3.21.
Any such notice pursuant to this Section 11.07 shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service to Duff &
Xxxxxx Credit Rating Company, 00 Xxxxx Xxxxxx, Xxx
Xxxx,
Xxx Xxxx 00000, Xxxxx'x Investors Service, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and to Standard & Poor's, a division of the XxXxxx-Xxxx Companies, Inc.,
00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other addresses as the Rating
Agencies may designate in writing to the parties hereto.
SECTION 11.08. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.09. Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Loans by the Depositor to the Trustee be, and be construed as, a
sale of the Mortgage Loans by the Depositor and not a pledge of the Mortgage
Loans by the Depositor to secure a debt or other obligation of the Depositor or
the Mortgage Loan Transferor. However, in the event that, notwith standing the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Mortgage Loan Transferor, then, (a) it is the express
intent of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Depositor to the Trustee to secure a debt or other obligation of
the Depositor or the Mortgage Loan Transferor and (b)(1) this Agreement shall
also be deemed to be a security agreement within the meaning of Articles 8 and 9
of the Uniform Commercial Code as in effect from time to time in the State of
New York; (2) the conveyance provided for in Section 2.01 hereof shall be deemed
to be a grant by the Mortgage Loan Transferor and the Depositor to the Trustee
of a security interest in all of the Mortgage Loan Transferor's and the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obliga tions described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 and the transfer pursuant to the
Mortgage Loan Purchase Agreement to be a true, absolute and unconditional sale
of the Mortgage Loans and assets constituting the Trust Fund by the Depositor to
the Trustee.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
AMERIQUEST MORTGAGE COMPANY,
as Master Servicer
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the __th day of November 1999, before me, a notary public in
and for said State, personally appeared Xxxxx Xxxxx, known to me to be an
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the __th day of November 1999, before me, a notary public in
and for said State, personally appeared __________________, known to me to be a
_________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the __th day of New York, before me, a notary public in and for
said State, personally appeared Xxxxxxx X. Xxxxxx, known to me to be an
Assistant Vice President of Norwest Bank Minnesota, National Association, one of
the entities 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 entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
-----------
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 1999-AQ2, Class A-1 Aggregate Certificate Principal Balance
of the Class A-1 Certificates as of the
Issue Date:
Pass-Through Rate: Variable $624,000,000.00
Date of Pooling and Servicing Agreement Denomination: $_____________
and Cut-off Date: November 1, 1999
Master Servicer:
First Distribution Date: Ameriquest Mortgage Company
December 15, 1999
Trustee: Norwest Bank Minnesota,
No. ___ National Association
Issue Date: November 10, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
-3-
The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall equal a
rate per annum equal to the lesser of (i) the One-Month LIBOR plus 0.42%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One- Month LIBOR plus 0.84% per annum, in the case of any Distribution
Date thereafter, and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
-4-
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-2
-----------
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL
BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-AQ2, Class A-2 Aggregate Certificate Principal
Balance of the Class A-2 Certificates
Pass-Through Rate: Variable as of the Issue
Date: $60,000,000.00
Date of Pooling and Servicing Agreement
and Cut-off Date: November 1, 1999 Denomination: $_____________
First Distribution Date: Master Servicer:
December 15, 1999 Ameriquest Mortgage Company
No. ___ Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-3-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall equal a
rate per annum equal to the lesser of (i) the One-Month LIBOR plus 0.58%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One- Month LIBOR plus 0.87% per annum, in the case of any Distribution
Date thereafter, and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in
-4-
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3
-----------
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL
BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-AQ2, Class M-1 Aggregate Certificate Principal
Balance of the Class M-1 Certificates
Pass-Through Rate: Variable as of the Issue
Date: $52,000,000.00
Date of Pooling and Servicing Agreement
and Cut-off Date: November 1, 1999 Denomination: $_____________
First Distribution Date: Master Servicer:
December 15, 1999 Ameriquest Mortgage Company
No. ___ Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-3-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall equal a
rate per annum equal to the lesser of (i) the One-Month LIBOR plus 0.85%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One- Month LIBOR plus 1.275% per annum, in the case of any Distribution
Date thereafter, and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in
-4-
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-4
-----------
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
Series 1999-AQ2, Class M-2 Aggregate Certificate Principal
Balance of the Class M-2 Certificates
Pass-Through Rate: Variable as of the Issue
Date: $27,600,000.00
Date of Pooling and Servicing Agreement
and Cut-off Date: November 1, 1999 Denomination: $_____________
First Distribution Date: Master Servicer:
December 15, 1999 Ameriquest Mortgage Company
No. ___ Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-3-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall equal a
rate per annum equal to the lesser of (i) the One-Month LIBOR plus 1.50%, in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One- Month LIBOR plus 2.25% per annum, in the case of any Distribution
Date thereafter, and (ii) the Net WAC Pass-Through Rate for such Distribution
Date.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
-4-
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-5
-----------
FORM OF CLASS M-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE SHALL BE MADE EXCEPT IN ACCORDANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
Series 1999-AQ2, Class M-3 Aggregate Certificate Principal Balance
of the Class M-3 Certificates as of the
Pass-Through Rate: 7.000% per annum Issue Date: $23,600,000.00
Date of Pooling and Servicing Agreement Denomination: $_____________
and Cut-off Date: November 1, 1999
Master Servicer:
First Distribution Date: Ameriquest Mortgage Company
December 15, 1999
Trustee: Norwest Bank Minnesota,
No. ___ National Association
Issue Date: November 10, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-3 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M-3 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final
-3-
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-4-
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class M-3 Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-6
-----------
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT",
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
NOVEMBER 10, 1999. BASED ON THE OID REGULATIONS AND ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT 28% CONSTANT PREPAYMENT RATE, USED
SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $______ OF OID PER $100,000 OF INITIAL
NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ______% AND THE AMOUNT OF
OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____
PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED
EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-AQ2, Class CE Aggregate Certificate Principal
Balance of the Class CE Certificates
Pass-Through Rate: Variable as of the Issue Date: $12,799,900.00
Date of Pooling and Servicing Agreement Denomination: $_____________
and Cut-off Date: November 1, 1999
Master Servicer:
First Distribution Date: Ameriquest Mortgage Company
December 15, 1999
Trustee: Norwest Bank Minnesota,
No. ___ National Association
Aggregate Notional Amount of the Issue Date: November 10, 1999
Class CE Certificates as of the
Issue Date: $799,999,900.19
Notional Amount: $799,999,900.19
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family adjustable-
rate first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class CE Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-4-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not
-6-
require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement .
-7-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-7
-----------
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT",
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
NOVEMBER 10, 1999. BASED ON THE OID REGULATIONS AND ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT 28% CONSTANT PREPAYMENT RATE, USED
SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $______ OF OID PER $100,000 OF INITIAL
NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ______% AND THE AMOUNT OF
OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____
PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
Series 1999-AQ2, Class P Aggregate Certificate Principal
Balance of the Class P Certificates
Date of Pooling and Servicing Agreement as of the Issue Date: $100.00
and Cut-off Date: November 1, 1999
Denomination: $_____________
First Distribution Date:
December 15, 1999 Master Servicer:
Ameriquest Mortgage Company
No. ___
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not
-6-
require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement .
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-8
-----------
FORM OF CLASS R-I CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE
OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
Series 1999-AQ2, Class R-I Aggregate Certificate Principal Balance
of the Class R-I Certificates as of the
Date of Pooling and Servicing Agreement Issue Date: 100% Percentage Interest
and Cut-off Date: November 1, 1999
Denomination: 100% Percentage Interest
First Distribution Date: December 15, 1999
Master Servicer:
No. ___ Ameriquest Mortgage Company
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-I Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-I Certificates in REMIC I created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-I Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-I Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R-I Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-4-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-I Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-I Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this
-6-
Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-9
-----------
FORM OF CLASS R-II CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE
OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
Series 1999-AQ2, Class R-II Aggregate Certificate Principal
Balance of the Class R-II Certificates
Date of Pooling and Servicing Agreement as of the Issue Date: 100% Percentage
and Cut-off Date: November 1, 1999 Interest
First Distribution Date: Denomination: 100% Percentage Interest
December 15, 1999
Master Servicer:
No. ___ Ameriquest Mortgage Company
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-II Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-II Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-II Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-II Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R-II Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of
-4-
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-II Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-II Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this
-6-
Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-10
------------
FORM OF CLASS R-III CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO
THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR
ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF
THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE
CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE
OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION
IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
CERTIFICATE.
Series 1999-AQ2, Class R-III Aggregate Certificate Principal
Balance of the Class R-III Certificates
Date of Pooling and Servicing as of the Issue Date: 100.00% Percentage
Agreement and Cut-off Date: Interest
November 1, 1999
Denomination: 100.00% Percentage Interest
First Distribution Date:
December 15, 1999 Master Servicer:
Ameriquest Mortgage Company
No. ___
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: November 10, 1999
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R-III Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class R-III Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-III Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-III Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R-III Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register. Notwithstanding the above,
the final
-4-
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Floating Rate Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-III Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-III Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this
-6-
Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, any Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 1999
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:___________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Certificate Registrar
By:___________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address: ________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________________________
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B
---------
[RESERVED]
EXHIBIT C-1
-----------
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1,
1999, among Salomon Brothers Mortgage Securities VII, Inc.,
Ameriquest Mortgage Company and Norwest Bank Minnesota,
National Association, Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2
------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Custodial Initial Certification delivered by Chase Bank
of Texas, National Association, as Custodian, pursuant to the Custodial
Agreement dated as of November __, 1999, by and among Norwest Bank Minnesota,
National Association, Salomon Brothers Mortgage Securities VII, Inc., Ameriquest
Mortgage Company and Chase Bank of Texas, National Association.
The Trustee (nor the Custodian on its behalf) 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 Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuine ness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:______________________________
Name:
Title:
EXHIBIT C-2
-----------
FORM OF TRUSTEE FINAL CERTIFICATION
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1,
1999, among Salomon Brothers Mortgage Securities VII, Inc.,
Ameriquest Mortgage Company and Norwest Bank Minnesota,
National Association Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received:
(i) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the
public recording office retains the original or where the original has
been lost; and
(ii) an original recorded Assignment of the Mortgage to the
Trustee together with the original recorded Assignment or Assignments
of the Mortgage showing a complete chain of assignment from the
originator, or a certified copy of such Assignments in those instances
where the public recording retains the original or where original has
been lost; and
(iii) the original lender's title insurance policy.
The Trustee 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 Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:________________________________
Name:
Title:
EXHIBIT D
---------
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated November 8, 1999, among Ameriquest Mortgage Company, a Delaware
corporation (the "Originator"), Ameriquest Securities L.L.C., a Nevada limited
liability company (the "Seller") and Salomon Brothers Mortgage Securities VII,
Inc., a Delaware corporation (the "Purchaser").
Preliminary Statement
---------------------
The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser will deposit the Mortgage Loans into a mortgage
pool comprising the trust fund. The trust fund will be evidenced by a single
series of floating rate mortgage pass-through certificates designated as Series
1999-AQ2, (the "Certificates"). The Certificates will consist of ten classes of
certificates. The Class CE Certificates, the Class P Certificates, the Class R-I
Certificates, the Class R-II Certificates and the Class R-III Certificates
(collectively, the "Ameriquest L.L.C. Certificates") will be delivered to the
Seller as partial consideration for the Mortgage Loans as further described
below. The Certificates will be issued pursuant to a Pooling and Servicing
Agreement, dated as of November 1, 1999 (the "Pooling and Servicing Agreement"),
among the Purchaser as depositor (in such capacity, the "Depositor"), the
Originator as master servicer (in such capacity the "Master Servicer") and
Norwest Bank Minnesota, National Association as trustee. Capitalized terms used
but not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before November 10, 1999 (the
"Closing Date"), certain adjustable-rate conventional residential mortgage loans
(the "Mortgage Loans"), having an aggregate principal balance as of the close of
business on November 1, 1999 (the "Cut-off Date") of approximately $624,321,287
(the "Closing Balance"), after giving effect to all payments due on the Mortgage
Loans on or before the Cut-off Date, whether or not received including the right
to any Prepayment Charges payable by the related Mortgagors in connection with
any Principal Prepayments on the Mortgage Loans.
SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that shall describe such Mortgage Loans and set forth
all of the Mortgage Loans to be purchased under this Agreement, including the
Prepayment Charges. The Closing Schedule will conform to the requirements set
forth in this Agreement and to the definition of "Mortgage Loan Schedule" under
the Pooling and Servicing Agreement. The Closing Schedule shall be used as the
Mortgage Loan Schedule under the Pooling and Servicing Agreement.
-2-
SECTION 3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to the net sale proceeds of the Class A-1 Certificates,
the Class A-2 Certificates, the Class M-1 Certificates, the Class M-2
Certificates and the Class M-3 Certificates and (ii) will have delivered to the
Seller or upon the order of the Seller the Ameriquest L.L.C. Certificates.
(b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Cut-off Date, all other payments of principal due and
collected after the Cut-off Date, and all payments of interest on the Mortgage
Loans allocable to the period after the Cut-off Date. Any payments (including
Prepayment Charges) collected on or before the Cut-off Date, including all
scheduled payments of principal and interest due on or before the Cut-off Date
and collected after the Cut-off Date, shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement,
the Depositor will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell and contribute, transfer, assign, set over and convey to the
Purchaser, without recourse but subject to the terms of this Agreement, all of
its right, title and interest in, to and under the Mortgage Loans, including the
related Prepayment Charges. The contents of each Mortgage File not delivered to
the Purchaser or to any assignee, transferee or designee of the Purchaser on or
prior to the Closing Date are and shall be held in trust by the Seller for the
benefit of the Purchaser or any assignee, transferee or designee of the
Purchaser. Upon the sale and contribution of the Mortgage Loans the ownership of
each Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller
will, on or prior to the Closing Date, deliver or cause to be delivered to the
Purchaser or any assignee, transferee or designee of the Purchaser each of the
following documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee, under the applicable agreement, without
recourse," with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Trustee;
-3-
(ii) the original Mortgage with evidence of recording thereon;
(iii) an original Assignment of Mortgage in blank;
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to
the Person assigning the Mortgage in blank as contemplated by the
immediately preceding clause (iii);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together
with all endorsements or riders which were issued with or subsequent to
the issuance of such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged Property represented therein as a fee
interest or leasehold vested in the Mortgagor.
The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon a mutual agreement between
the Originator and the Trustee, following the later of (i) the Closing Date,
(ii) the date on which the Originator receives the Assignment from the Custodian
and (iii) the date of receipt by the Originator of the recording information for
a Mortgage) submit or cause to be submitted for recording, at no expense to the
Trust Fund or the Trustee, in the appropriate public office for real property
records, each Assignment referred to in (iii) and (iv) above and shall execute
each original Assignment in the following form: "Norwest Bank Minnesota,
National Association, as Trustee under the applicable agreement". In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Originator shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be submitted for recording with respect to any
Mortgage Loan only if the Trustee and each Rating Agency has received an opinion
of counsel, satisfactory in form and substance to the Trustee and each Rating
Agency, to the effect that the recordation of such assignments in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note; provided further, however, notwithstanding the delivery of any
opinion of counsel, each assignment of Mortgage shall be submitted for recording
by the Originator in the manner described above, at no expense to the Trust Fund
or Trustee, upon the earliest to occur of: (i) reasonable direction by Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii) failure of
the Master Servicer Termination Test, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Originator, (iv) the occurrence of a
servicing transfer as described in Section 7.02 of the Pooling and Servicing
Agreement and (iv) if the Originator is not the Master Servicer and with respect
to any one assignment of Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Originator is unable to pay the cost of
recording the Assignments of Mortgage, such expense will be paid by the Trustee.
-4-
Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the Seller
hereunder shall be deemed to have been satisfied upon (1) delivery by or on
behalf of the Seller promptly upon receipt thereof to or on behalf of the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such copy is certified
by the Seller delivery promptly upon receipt thereof of either the original or a
copy of such document certified by the public recording office to be a true and
complete copy of the original.
In the event that the original lender's title insurance policy
has not yet been issued, the Seller shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. The Seller shall deliver to the Purchaser or any assignee,
transferee or designee of the Purchaser promptly upon receipt by the Seller of
any such original title insurance policy or original Primary Mortgage Insurance
Policy.
Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) TRANSFER OF SUBSEQUENT MORTGAGE LOANS. In
connection with the transactions contemplated by Section 2.11 of the Pooling and
Servicing Agreement, the Seller hereby agrees that the Purchaser shall be under
no obligation to purchase any Subsequent Mortgage Loans unless (i) the
conditions precedent and the representations and warranties contained in Section
2.11 of the Pooling and Servicing Agreement and the Subsequent Transfer
Instrument, substantially in the form of Exhibit 9, are satisfied and (ii) each
Subsequent Mortgage Loan satisfies the representations and warranties contained
in Section 6 of this Agreement. The sale of Subsequent Mortgage Loans by the
Seller to the Purchaser shall be effected in accordance with the terms of
Section 2.11 of the Pooling and Servicing Agreement pursuant to a Subsequent
Mortgage Loan Purchase Agreement substantially in the form of this Agreement.
-5-
(e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller under this Agreement
will be promptly reimbursed by the Seller.
(f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER.
(a) The Seller hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:
(i) The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Nevada and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Seller in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Mortgage Loan;
(ii) The Seller had the full corporate power and
authority to hold and sell each Mortgage Loan and has the full corporate power
and authority to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Seller the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser and the
Originator, constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
-6-
and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by
the Seller, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Seller and will not (A) result in a
breach of any term or provision of the articles of formation or operating
agreement of the Seller or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other material
agreement or instrument to which the Seller is a party or by which it may be
bound, or any statute, order or regulation applicable to the Seller of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the Seller is not a party to, bound by, or in
breach or violation of any indenture or other agreement or instrument, or
subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Seller's knowledge,
would in the future materially and adversely affect, (x) the ability of the
Seller to perform its obligations under this Agreement or (y) the business,
operations, financial condition, properties or assets of the Seller taken as a
whole;
(iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Seller has
obtained the same; and
(v) No litigation is pending against the Seller that
would materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Seller to service the Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the terms
hereof.
(b) The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:
(i) The Originator is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Originator in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Mortgage Loan and to service the Mortgage
Loans in accordance with the terms of the Pooling and Servicing Agreement;
(ii) The Originator had the full corporate power and
authority to originate, hold and sell each Mortgage Loan and has the full
corporate power and authority to service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate
-7-
action on the part of the Originator the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization, execution
and delivery thereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Originator, enforceable against the Originator in accordance
with its terms, except to the extent that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by
the Originator, the servicing of the Mortgage Loans by the Originator under the
Pooling and Servicing Agreement, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Originator and will
not (A) result in a breach of any term or provision of the charter or by-laws of
the Originator or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other material
agreement or instrument to which the Originator is a party or by which it may be
bound, or any statute, order or regulation applicable to the Originator of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Originator; and the Originator is not a party to, bound
by, or in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Originator's
knowledge, would in the future materially and adversely affect, (x) the ability
of the Originator to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Originator taken as a whole;
(iv) No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Originator has
obtained the same;
(v) The Originator is an approved Originator/servicer
for Xxxxxx Xxx or Xxxxxxx Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and
(vi) No litigation is pending against the Originator
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Originator to service the
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof.
-8-
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
RELATING TO THE MORTGAGE LOANS.
The Originator hereby represents and warrants to the Purchaser, that as
of the Closing Date:
(i) The information set forth on the related Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;
(ii) [Reserved];
(iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including, without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;
(iv) Except with respect to approximately 1.48% of the
Mortgage Loans which were 30 days or more but less than 60 days delinquent in
payments and with respect to approximately 0.43% of the Mortgage Loans which
were 60 days or more but less than 90 days delinquent in their payments as of
October 31, 1999, in each case by outstanding principal balance of the Mortgage
Loans as of the Cut-off Date, all payments due prior to the Cut-off Date have
been made and none of the Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;
(v) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of nondelinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;
(vi) Immediately prior to the assignment of the Mortgage Loans
to the Seller, the Originator had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;
(vii) To the best of the Originator's knowledge, there is no
delinquent tax or assessment lien against any Mortgaged Property;
(viii) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on
-9-
such Mortgage Note, nor will the operation of any of the terms of the Mortgage
Note and the Mortgage, or the exercise of any right thereunder, render the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury and
no such right of rescission, set-off, counterclaim or defense has been asserted
with respect thereto;
(ix) To the best of the Originator's knowledge, there are no
mechanics' liens or claims for work, labor or material affecting any Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of the
related Mortgage, except those which are insured against by the title insurance
policy referred to in (xiii) below;
(x) Subject to the Escrow Withhold referred to in (xx) below,
to the best of the Originator's knowledge, each Mortgaged Property is free of
material damage and is in good repair;
(xi) Each Mortgage Loan at origination complied in all
material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;
(xii) Neither the Originator nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;
(xiii) A lender's policy of title insurance together with a
condominium endorsement, extended coverage endorsement, and an adjustable rate
mortgage endorsement, as applicable in an amount at least equal to the Cut-off
Date principal balance of each such Mortgage Loan or a commitment (binder) to
issue the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force and effect, the
transfer of the related Mortgage Loan to the Seller will not affect the validity
or enforceability of such policy and each such policy was issued by a title
insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, which
policy insures the Originator and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien of the Mortgage; to the best
of the Originator's knowledge, no claims have been made under such mortgage
title insurance policy and no prior holder of the related Mortgage, including
the Originator, has done, by act or omission, anything which would impair the
coverage of such mortgage title insurance policy;
(xiv) Each Mortgage Loan was originated by the Originator (or,
if generated on behalf of the Originator by a person other than the Originator,
is subject to the same standards and procedures used by the Originator in
originating mortgage loans directly) or by a savings and loan association,
savings bank, commercial bank, credit union, insurance company or similar
institution
-10-
which is supervised and examined by a federal or state authority (including a
mortgage broker), or by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act;
(xv) On each adjustment date, the Mortgage Rate will be
adjusted to equal the Index plus the Gross Margin, rounded to the nearest
0.125%, subject to the Periodic Rate Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate. Except for balloon loans, the related Mortgage Note is
payable on the first day of each month in self-amortizing monthly installments
of principal and interest, with interest payable in arrears, and requires a
monthly payment which is sufficient to fully amortize the outstanding principal
balance of the Mortgage Loan over its remaining term and to pay interest at the
applicable Mortgage Rate. No Mortgage Loan is subject to negative amortization;
(xvi) To the best of the Originator's knowledge, all of the
improvements which were included for the purpose of determining the appraised
value of the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining properties
encroach upon the Mortgaged Property, except those, if any, which are insured
against by the title insurance policy referred to in (xiii) above.
(xvii) All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy, have been made or obtained from the
appropriate authorities and the Mortgaged Property is lawfully occupied under
applicable law;
(xviii) All parties which have had any interest in the
Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(xvix) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with applicable laws. All parties
to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties;
(xx) The proceeds of each Mortgage Loan have been fully
disbursed, 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, excepting
therefrom any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold
as defined in the Originator's underwriting guidelines. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were paid;
-11-
(xxi) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(xxii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxiii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Originator have been capitalized under the
Mortgage or the related Mortgage Note;
(xxiv) The origination, collection and servicing practices
used by the Originator with respect to each Mortgage Loan have been in all
material respects legal, proper, prudent and customary in the mortgage
origination and servicing business;
(xxv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;
(xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvii) No Mortgage Loan provides for primary mortgage
insurance;
(xxviii) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxix) below contain
a standard mortgagee clause naming the Originator or the original mortgagee, and
its successors in interest, as mortgagee, and the Originator has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;
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(xxix) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;
(xxx) To the best of the Originator's knowledge, there is no
default, breach, violation or event of acceleration existing under the Mortgage
or the related Mortgage Note; and the Originator has not waived any default,
breach, violation or event of acceleration;
(xxxi) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which, to the best of the Originator's knowledge,
does not include (a) cooperatives or (b) mobile homes and manufactured homes (as
defined in the Xxxxxx Xxx Seller-Servicer's Guide), except when the appraisal
indicates that the mobile or manufactured home was built under the Federal
Manufactured Home Construction and Safety Standards of 1976 or otherwise assumes
the characteristics of site-built housing and meets local building codes, is
readily marketable, has been permanently affixed to the site and is not in a
mobile home "park," and is treated as real property under the applicable state
law. With respect to any Mortgage Loan that is secured by a leasehold estate,
(a) the lease is valid, in full force and effect, and conforms to all of the
Xxxxxx Mae requirements for leasehold estates; (b) all rents and other payments
due under the lease have been paid; (c) the lessee is not in default under any
provision of the lease; (d) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five years and (e) the Mortgagee under the
Mortgage Loan is given notice and an opportunity to cure any defaults under the
lease;
(xxxii) There is no obligation on the part of the Originator
or any other party under the terms of the Mortgage or related Mortgage Note to
make payments in addition to those made by the Mortgagor;
(xxxiii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(xxxiv) Each Mortgage Loan was underwritten in accordance with
the Originator's underwriting guidelines;
(xxxv) The Mortgage File contains an appraisal which was
performed by an appraiser who satisfied, and which was conducted in accordance
with, all of the applicable requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended;
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(xxxvi) None of the Mortgage Loans is a graduated payment
mortgage loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;
(xxxvii) With respect to each Mortgage Loan, no loan junior in
lien priority to such Mortgage Loan and secured by the related Mortgaged
Property was originated by the Originator at the time of origination of such
Mortgage Loan;
(xxxviii) The Mortgage Loans delivered on the Closing Date
comply with the characteristics set forth on Exhibit 1 hereto;
(xxxix) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, except as may be limited by
applicable law;
(xl) The information set forth in the Mortgage Loan Schedule
relating to the existence of a prepayment charge is complete, true and correct
in all material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms (except to the extent that: (1) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary payoff; or (3) subsequent changes in applicable
law may limit or prohibit enforceability thereof) under applicable law; and
(xli) Each Mortgage Loan is an obligation that is principally
secured by real property for purposes of the REMIC Provisions of the Code.
.
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
AND FOR BREACH OF REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders. With respect to the
representations and warranties contained herein which are made to the knowledge
or the best of knowledge of the Originator, or as to which the Originator, has
no knowledge, if it is discovered that the substance of any such representation
and warranty was materially inaccurate as of the date such representation and
warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Purchaser or the Purchaser's assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Originator, with respect to the
substance of such representation and warranty being materially inaccurate at the
time
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the representation and warranty was made, the Originator shall take such action
described in the following paragraph in respect of such Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report), as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Mortgage Loan
or the interest therein of the Purchaser or the Purchaser's assignee, transferee
or designee, the party discovering the breach shall give prompt written notice
to the other. Within ninety (90) days of its discovery or its receipt of notice
of any such missing documentation which was not transferred to the Purchaser as
described above or materially defective documentation or any such breach of a
representation and warranty the Originator promptly shall deliver such missing
document or cure such defect or breach in all material respects, or in the event
the Originator cannot deliver such missing document or such defect or breach
cannot be cured, the Originator shall, within 90 days of its discovery or
receipt of notice, either (i) repurchase the affected Mortgage Loan at a price
equal to the greater of the Purchase Price (as such term is defined in the
Pooling and Servicing Agreement) or (ii) pursuant to the provisions of the
Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans.
The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement. In
connection with the repurchase of any Mortgage Loan by the Originator at the
price indicated in clause (i)(B) above, any amounts in excess of the Purchase
Price shall not be deposited in the Collection Account, but instead shall be
paid to the Purchaser or its designee. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.
In addition, upon discovery by the Seller, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering the breach shall give prompt written notice
within two Business Days to the others. Within ninety (90) days of its discovery
or its receipt of notice, the Originator promptly shall either (i) repurchase
the affected Mortgage Loan at the Purchase Price (as such term is defined in the
Pooling and Servicing Agreement) or (ii) pursuant to the provisions of the
Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans.
-15-
(b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, repurchase or substitute for a
defective Mortgage Loan constitute the sole rem edies of the Purchaser against
the Originator respecting a missing or defective document or a breach of the
representations and warranties contained in Section 5 or Section 6. It is
understood and agreed that the obligations of the Originator set forth in this
Section 7 to repurchase or substitute for a Mortgage Loan as to which a material
document is missing constitute the sole remedies of the Purchaser against the
Originator respecting a missing document.
SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Xxxxxxx Xxxxxxxx & Xxxx at 10:00 AM New York City time on
the Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller and the Originator under this Agreement shall
be true and correct in all material respects as of
the date as of which they are made and no event shall
have occurred which, with notice or the passage of
time, would constitute a default under this
Agreement;
(b) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(c) The Seller shall have delivered or caused to be
delivered and released to the Purchaser or to its
designee, all documents (including without
limitation, the Mortgage Loans) required to be so
delivered by the Purchaser pursuant to Section 2.01
of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Purchase Price in immediately available funds.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
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(a) An Officers' Certificate of the Seller,
dated the Closing Date, upon which the
Purchaser and Xxxxxxx Xxxxx Barney Inc. (the
"Underwriter") may rely, in the form of
Exhibit 3 hereto, and attached thereto
copies of the certificate of formation,
by-laws and certificate of good standing of
the Seller under the laws of Nevada;
(b) An Officers' Certificate of the Seller,
dated the Closing Date, upon which the
Purchaser and the Underwriter may rely, in
the form of Exhibit 4 hereto, with respect
to certain facts regarding the sale of the
Mortgage Loans by the Seller to the
Purchaser;
(c) An Opinion of Counsel of the Seller, dated
the Closing Date and addressed to the
Purchaser and the Underwriter, substantially
in the form attached hereto as Exhibit 5;
(d) (i) an Officers' Certificate of the
Originator, dated the Closing Date, upon
which the Purchaser and Xxxxxxx Xxxxx Xxxxxx
Inc. (the "Underwriter") may rely, in the
form of Exhibit 6 hereto, and attached
thereto copies of the certificate of
incorporation, by-laws and certificate of
good standing of the Originator under the
laws of Delaware and (ii) if the Class CE
Certificates and Class P Certificates are
offered pursuant to a Private Placement
Memorandum, the Originator shall deliver an
Officer's Certificate stating that the same
information contained in such Private
Placement Memorandum as that which appears
under the subheadings "Summary of the
Prospectus Supplement--The Mortgage Loans,"
"Risk Factors--Certain Mortgage Loans Have
High Loan-to-Value Ratios Which May Present
a Greater Risk of Loss With Respect to Such
Mortgage Loans,--Certain Mortgage Loans Are
Delinquent as of the Cut-off Date, Which May
Present a Greater Risks of Loss Relating to
Such Mortgage Loans,--The Mortgage Loans Are
Concentrated in the State of California,
Which May Present a Greater Risk of Loss
With Respect to Such Mortgage Loans,--The
Rate and Timing of Principal Distributions
on the Offered Certificates Will Be Affected
by Prepayment Speeds (solely to the extent
that such section sets forth the percentage
of Mortgage Loans which, by aggregate
principal balance as of the Cut-off Date,
contain Prepayment Charges), --Violation of
Various Federal and State Laws May Result in
Losses on the Mortgage Loans, "The Mortgage
Pool", and "Pooling and Servicing
Agreement--The Originator and Master
Servicer", as of the date of the Prospectus
Supplement is true and accurate in all
material respects;
-17-
(e) An Officers' Certificate of the Originator,
dated the Closing Date, upon which the
Purchaser and the Underwriter may rely, in
the form of Exhibit 7 hereto, with respect
to certain facts regarding the sale of the
Mortgage Loans by the Originator to the
Seller;
(f) An Opinion of Counsel of the Originator,
dated the Closing Date and addressed to the
Purchaser and the Underwriter, substantially
in the form attached hereto as Exhibit 8;
(g) Such opinions of counsel as the Rating
Agencies or the Trustee may request in
connection with the sale of the Mortgage
Loans by the Seller to the Purchaser or the
Seller's execution and delivery of, or
performance under, this Agreement;
(h) A letter from Deloitte & Touche L.L.P.,
certified public accountants, dated the date
hereof and to the effect that they have
performed certain specified procedures as a
result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the
Prospectus Supplement, dated November 8,
1999 in the Summary under the subheading
"The Mortgage Loans" and under the captions
"The Mortgage Pool" and "Pooling and
Servicing Agreement--The Originator and
Master Servicer", agrees with the records of
the Originator;
(i) The Originator shall deliver for inclusion
in the Prospectus Supplement for Salomon
Brothers Mortgage Securities VII, Inc.,
Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2, under the
captions "The Mortgage Pool--Underwriting
Standards; Representations" and "Pooling and
Servicing Agreement--The Originator and
Master Servicer", or for inclusion in other
offering material such publicly available
information regarding the Seller, its
financial condition and its mortgage loan
delinquency, foreclosure and loss
experience, underwriting standards, lending
activities and loan sales, production, and
servicing and collection practices, and any
similar nonpublic, unaudited financial
information;
(j) A letter from Deloitte & Touche L.L.P.,
certified public accountants, dated the date
hereof and to the effect that they have
performed certain specified procedures as a
result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the
Prospectus Supplement, dated November 8,
1999 under the captions "Summary of
Prospectus Supplement", "Yield on the
Certificates" and "Description of the
Certificates" agrees with the records of the
Originator; and
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(k) Such further information, certificates,
opinions and documents as the Purchaser or
the Underwriter may reasonably request.
SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation, fees
for title policy endorsements and continuations, the fees and expenses of the
Seller's in-house accountants and in-house attorneys, the costs and expenses
incurred in connection with producing the Seller's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e). The Seller shall
not be responsible for any fees related to the Assignment of Mortgage recording
costs and/or fees. The Seller shall pay (or shall reimburse the Purchaser or any
other Person to the extent that the Purchaser or such other Person shall pay)
the costs and expenses of printing (or otherwise reproducing) and delivering
this Agreement, the Pooling and Servicing Agreement, the Certificates, the
prospectus, prospectus supplement, and private placement memorandum relating to
the Certificates and other related documents, the initial fees, costs and
expenses of the Trustee, the fees and expenses of the Seller's counsel in
connection with the preparation of all documents relating to the securitization
of the Mortgage Loans, the filing fee charged by the Securities and Exchange
Commission for registration of the Certificates, the cost of outside special
counsel that may be required for the Purchaser, the cost of obtaining the
documents referred to in Section 9(g) and the fees charged by any rating agency
to rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.
SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Mortgage Loans are being serviced by the Originator in
accordance with the terms and provisions set forth in the Aggregation Facility,
as memorialized in the letter agreement dated July 30, 1999 (the "Aggregation
Facility") between Salomon Brothers Realty Corp. and the Originator, and it is
understood and agreed by and between the Originator and the Purchaser that the
interim servicing arrangements under the Aggregation Facility with the
Originator will be superseded by the servicing arrangements set forth in the
Pooling and Servicing Agreement.
SECTION 12. INDEMNIFICATION. (a) The Originator will indemnify
and hold harmless each of (i) Xxxxxxx Xxxxx Xxxxxx Inc. ("Salomon"), (ii) the
Purchaser and (iii) each person, if any, who controls Salomon or the Purchaser
within the meaning of the Securities Act of 1933, as amended (the "1933 Act")
((i) through (iii) collectively, the "Indemnified Party"), against any and all
losses, claims, expenses, damages or liabilities to which the Indemnified Party
may become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, expenses, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (a) any untrue statement or alleged untrue statement of
a material fact contained in the Prospectus Supplement or in any revision or
amendment thereof or supplement thereto or in any other offering document (a
"Private Placement Memorandum") relating to the offering by the Purchaser or an
affiliate thereof, of the Class CE Certificates or the Class P Certificates, or
the omission or the alleged omission to state therein or in any revision or
amendment thereof or supplement thereto a material fact necessary in order to
make the statements therein not misleading, in each case to the extent that such
untrue statement or alleged
-19-
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with information provided by Ameriquest specifically for use in
the Prospectus Supplement, which shall include the information set forth under
the captions "Summary of the Prospectus Supplement--The Mortgage Loans," "Risk
Factors--Certain Mortgage Loans Have High Loan-to-Value Ratios Which May Present
a Greater Risk of Loss With Respect to Such Mortgage Loans, --Certain Mortgage
Loans Are Delinquent as of the Cut-off Date, Which May Present a Greater Risks
of Loss Relating to Such Mortgage Loans, --The Mortgage Loans Are Concentrated
in the State of California, Which May Present a Greater Risk of Loss With
Respect to Such Mortgage Loans, --The Rate and Timing of Principal Distributions
on the Offered Certificates Will Be Affected by Prepayment Speeds (solely to the
extent that such section sets forth the percentage of Mortgage Loans which, by
aggregate principal balance as of the Cut-off Date, contain Prepayment Charges),
--Violation of Various Federal and State Laws May Result in Losses on the
Mortgage Loans, "The Mortgage Pool", and "Pooling and Servicing Agreement--The
Originator and Master Servicer" and any of the same information contained in the
Private Placement Memorandum, (b) any representation, warranty or covenant made
by the Originator in this Agreement and the Pooling and Servicing Agreement and
(c) any updated collateral information provided by Salomon to a purchaser of the
Certificates derived from the data provided by the Originator or in the
Remittance Report or a current collateral tape obtained from the Originator or
an affiliate of the Originator, including the current loan balances of the
Mortgage Loans ((a) through (c) collectively, "Ameriquest Information"), and
agrees to reimburse each such Indemnified Party for any legal or other expenses
reasonably incurred by it or him in connection with investigating or defending
any such loss, claim, damage, liability or action. It is understood that the
Originator does not agree to indemnify the Indemnified Party identified in the
preceding sentence in respect of any losses, claims, expenses, damages or
liabilities to the extent that such losses, claims, expenses, damages or
liabilities relate to any inaccuracy or omission in any Private Placement
Memorandum to the extent that such inaccuracy or omission results from
non-conformity with the Ameriquest Information. This indemnity will be in
addition to any liability which the Originator may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Originator,
its officers and its directors, and each person who controls the Originator
within the meaning of the 1933 Act against any and all losses, claims, expenses,
damages or liabilities, joint or several, to which they may become subject under
the 1933 Act, or otherwise, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus Supplement, the Prospectus or Private Placement Memorandum, or in any
revision or amendment thereof or supplement thereto, or the omission or alleged
omission to state therein or in any revision or amendment thereof or supplement
thereto a material fact necessary in order to make the statements therein not
misleading, except insofar as such losses, claims, expenses, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made therein in reliance upon and in conformity with the
Ameriquest Information and will reimburse the Originator and each such
controlling person for any legal or other expenses reasonably incurred by it or
him in connection with investigating or defending any such loss, claim, damage,
liability or action. The liability of the Purchaser under this agreement shall
be in addition to any other liability the Purchaser may otherwise have.
-20-
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph above, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Purchaser, in the case of parties
indemnified pursuant to the immediately preceding paragraph above and by the
Originator in the case of parties indemnified pursuant to the second preceding
paragraph above. The indemnifying party may, at its option, at any time upon
written notice to the indemnified party, assume the defense of any proceeding
and may designate counsel satisfactory to the indemnified party in connection
therewith provided that the counsel so designated would have no actual or
potential conflict of interest in connection with such representation. Unless it
shall assume the defense of any proceeding, the indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnifying party assumes the defense of any proceeding, it shall be
entitled to settle such proceeding with the consent of the indemnified party or,
if such settlement provides for release of the indemnified party in connection
with all matters relating to the proceeding which have been asserted against the
indemnified party in such proceeding by the other parties to such settlement,
without the consent of the indemnified party.
(d) If the indemnification provided for in this agreement is
unavailable to an indemnified party hereof or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
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(e) The parties hereto agree that it would not be just and equitable if
contribution pursuant to the terms of this agreement were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in the immediately preceding paragraph above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in this agreement shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim, except where the indemnified party is
required to bear such expenses pursuant to this agreement, which expenses the
indemnifying party shall pay as and when incurred, at the request of the
indemnified party, to the extent that the indemnifying party will be ultimately
obligated to pay such expenses. In the event that any expenses so paid by the
indemnifying party are subsequently determined to not be required to be borne by
the indemnifying party hereunder, the party which received such payment shall
promptly refund the amount so paid to the party which made such payment. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement, and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.
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SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Finance Desk, or such other
address as may hereafter be furnished to the Seller in writing by the Purchaser;
if to the Seller or the Originator, addressed to the Seller at 0000 Xxxx &
Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel,
or to such other address as the Seller or Originator may designate in writing to
the Purchaser.
SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 16. AGREEMENT OF PARTIES. The Originator, the Seller
and the Purchaser agree to execute and deliver such instruments and take such
actions as either of the others may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement and
the Pooling and Servicing Agreement.
SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
(b) The Originator agrees that the representations, warranties and
agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Purchaser,
notwithstanding any investigation heretofore or hereafter made by the Purchaser
or on its behalf, and that the representations, warranties and agreements made
by the Originator herein or in any such certificate or other instrument shall
survive the delivery of and payment for the Mortgage Loans and shall continue in
full force and effect, notwithstanding any restrictive or qualified endorsement
on the Mortgage Notes and notwithstanding subsequent termina tion of this
Agreement, the Pooling and Servicing Agreement or the Trust Fund.
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SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the con version, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if
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this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement and the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Originator, the Purchaser and the
Seller have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
AMERIQUEST SECURITIES L.L.C.
By:___________________________
Name:
Title:
AMERIQUEST MORTGAGE COMPANY
By:____________________________
Name:
Title:
SALOMON BROTHERS MORTGAGE SECURITIES
VII, INC.
By:____________________________
Name: Xxxxx Xxxxx
Title: Assistant Vice President
EXHIBIT 1
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
All percentages set forth herein are based upon the aggregate
unpaid principal balances of the Mortgage Loans as of the Cut-off Date.
(1) No Mortgage Loan had a Loan-to-Value Ratio at origination in
excess of 90.00%;
(2) No more than 0.31% of the Mortgage Loans (measured by the
Cut-off Date Principal Balance), are related to Mortgaged
Properties located in any one zip code area;
(3) Each Mortgaged Property is located in one of the states of
Alabama, Alaska, Arizona, Arkansas, California, Colorado,
Connecticut, Delaware, District of Columbia, Florida, Georgia,
Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada,
New Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Carolina, South Dakota, Tennessee, Texas,
Utah, Vermont, Washington, West Virginia, Wisconsin and
Wyoming;
(4) None of the Mortgage Loans (measured by the Cut-off Date
Principal Balance) are secured by a leasehold estate or the
term of each such leasehold estate, if any, is not less than 5
years longer than the related Mortgage Note;
(5) No more than approximately 2.36% of the Mortgage Loans
(measured by the Cut-off Date Principal Balance) are secured
by condominium units; no more than 0.27% of the Mortgage Loans
are secured by non owner-occupied condominium units; and all
condominium Mortgage Loans have been originated on a form
acceptable to Xxxxxx Xxx or Xxxxxxx Mac with such riders as
have been acceptable to Xxxxxx Mae or Xxxxxxx Mac, as the case
may be;
(6) No more than 5.84% of the Mortgage Loans (measured by the
Cut-off Date Principal Balance) are secured by two- to
four-family dwellings. No more than 0.65% of the Mortgage
Loans (measured by the Cut-off Date Principal Balance) are
secured by Town Houses. No more than 2.56% of the Mortgage
Loans (measured by the Cut-off Date Principal Balance) are
secured by Manufactured Housing. No more than 2.65% of the
Mortgage Loans (measured by the Cut-off Date Principal
Balance) are secured by dwelling units in PUDs. Approximately
85.94% of the Mortgage Loans (measured by the Cut-off Date
Principal Balance) are secured by detached one-family
dwellings;
(7) No Mortgage Loan had a principal balance in excess of
approximately $604,000 at origination;
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(8) Each Mortgage Loan was originated on or after October 1998 and
each Mortgage Loan has a next Adjustment Date no later than
November 2002;
(9) On the basis of representations made by the Mortgagors in
their loan applications, no more than 5.57% of the Mortgage
Loans are secured by non owner-occupied properties and at
least 94.43% of the owner-occupied Mortgage Loans are secured
by owner-occupied Mortgaged Properties (in each case measured
by the Cut-off Date Principal Balance);
(10) The Mortgage Rates borne by the Mortgage Loans as of the
Cut-off Date ranged from 7.50% per annum to 16.00% per annum
and the weighted average Mortgage Rate as of the Cut-off Date
was 9.554% per annum;
(11) As of the Cut-off Date, approximately 56.09% of the Mortgage
Loans were rate/term refinancings, approximately 43.02% of the
Mortgage Loans were cash out refinancings and approximately
0.90% of the Mortgage Loans were made to purchase the related
Mortgaged Properties, in each case measured by the Cut-off
Date Principal Balance;
(12) No more than approximately 80.59% of the Mortgage Loans
(measured by the Cutoff Date Principal Balance) were
originated by the Originator under the Originator's "Full
Documentation" mortgage loan program, no more than
approximately 11.39% of the Mortgage Loans (measured by the
Cut-off Date Principal Balance) were originated by the
Originator under the Originator's "Fast Trac Documentation"
mortgage loan programs, and no more than approximately 8.02%
of the Mortgage Loans (measured by the Cut-off Date Principal
Balance) were originated by the Originator under the
Originator's "Stated Income Documentation" mortgage loan
program; and
(14) With respect to the Originator's underwriting risk categories,
approximately 5.72%, approximately 14.23%, approximately
33.75%, approximately 24.31%, approximately 17.48% and
approximately 4.51% of the Mortgage Loans constitute AAA Risk
Mortgage Loans, AA Risk Mortgage Loans, A Risk Mortgage Loans,
B Risk Mortgage Loans, C Risk Mortgage Loans, and D Risk
Mortgage Loans, respectively, in each case measured by the
Cut-off Date Principal Balance.
EXHIBIT 2
[RESERVED]
EXHIBIT 3
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
I, _____________ hereby certify that I am the duly appointed
_______________ of Ameriquest Securities L.L.C., a Nevada limited liability
company (the "Seller"), and further certify, on behalf of the Seller, as
follows:
1. Attached hereto as Exhibit A is a true and correct copy of
the Articles of Organization and Operating Agreement of the Seller,
both of which are in full force and effect on the date hereof. There
has been no amendment or other document filed affecting the Articles of
Organization of the Seller since November __, 1999, and no such
amendment has been authorized. There has been no amendment or other
document filed affecting the Operating Agreement of the Seller since
November __, 1999, and no such amendment has been authorized. Attached
hereto as Exhibit B is a certificate of good standing, dated November
__, 1999 issued by the State of Nevada with respect to the Seller. No
event has occurred since the date thereof that has affected the good
standing of the Seller under the laws of the State of Nevada.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Seller
that, if adversely determined, individually or in the aggregate, would
adversely affect the Seller's ability to perform its obligations under
the Mortgage Loan Sale and Contribution Agreement, dated as of November
__, 1999 (the "Mortgage Loan Sale and Contribution Agreement"), between
the Seller and Ameriquest Mortgage Company ("Ameriquest") or the
Mortgage Loan Purchase Agreement, dated November __, 1999 (the
"Purchase Agreement") among the Seller, Ameriquest and Salomon Brothers
Mortgage Securities VII, Inc. (the "Depositor"). No proceedings looking
toward merger, consolidation or liquidation, dissolution or bankruptcy
of the Seller are pending or contemplated.
3. Each person who, as an officer or representative of the
Seller, signed the Mortgage Loan Sale and Contribution Agreement, the
Purchase Agreement and any other document delivered prior hereto or on
the date hereof in connection with the purchase described in the
Mortgage Loan Sale and Contribution Agreement or the transactions
described in the Purchase Agreement was, at the respective times of
such signing and delivery, and is now, duly elected or appointed,
qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their
genuine signatures.
4. Each of the Mortgage Loans referred to in the Mortgage Loan
Sale and Contribution Agreement and the Purchase Agreement was
originated in accordance with Section 6(xiv) of the Purchase Agreement.
5. All of the representations and warranties of the Seller
under the Purchase Agreement are true and correct in all material
respects as of the Closing Date (subject, in the case of the Closing
Schedule delivered pursuant to the Purchase Agreement, to such
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amendments thereto as were duly made on or before the date hereof) and
no event has occurred which, with notice or the passage of time or
both, would constitute a default under the Mortgage Loan Sale and
Contribution Agreement or the Purchase Agreement.
6. The information set forth in the Mortgage Loan Schedule
attached as an exhibit to the Mortgage Loan Sale and Contribution
Agreement and to the Purchase Agreement is true and correct in all
material respects.
7. With respect to its sale of the Mortgage Loans and the
related transactions and undertakings contemplated by the Mortgage Loan
Sale and Contribution Agreement and the Purchase Agreement, the Seller
has complied with all the obligations by which it is bound and has
satisfied all the conditions on its part to be performed or satisfied
prior to the Closing Date.
8. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Sale and Contribution
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Seller.
Dated: November __, 1999
By:
-----------------------------------
Name:
Title:
I, _______________, an ______________________ of Ameriquest
Securities L.L.C. hereby certify that ___________________ is the duly appointed,
qualified and acting _____________________ of the Seller and that the signature
appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: November __, 1999
By:
-----------------------------------
Name:
Title:
EXHIBIT 4
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
CERTIFICATE OF
AMERIQUEST SECURITIES L.L.C.
Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Ameriquest Mortgage Company (the "Seller") to Ameriquest Securities
L.L.C. (the "Ameriquest L.L.C.") pursuant to a Mortgage Loan Sale and
Contribution Agreement (the "Sale and Contribution Agreement"), dated November
__, 1999, between Ameriquest and the Ameriquest L.L.C. (the "Purchase
Agreement"), the transfer of the Mortgage Loans by the Ameriquest L.L.C. to
Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor") pursuant to a
Mortgage Loan Purchase Agreement, dated November __, 1999 (the "Purchase
Agreement") and the simultaneous issuance of Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class
M-3, Class CE, Class P, Class R-I, Class R-II and Class R-III (the
"Certificates"), pursuant to a Pooling and Servicing Agreement, dated as of
November 1, 1999 (the "Pooling and Servicing Agreement") among the Depositor as
depositor, Ameriquest as master servicer (in such capacity, the "Master
Servicer") and Norwest Bank Minnesota, National Association as trustee (the
"Trustee"). In consideration for its purchase of the Mortgage Loans, the
Depositor will deliver to Ameriquest Securities L.L.C. the Class CE, Class P,
Class R-I, Class R-II and Class R-III Certificates. The Depositor will sell the
Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class M-3 Certificates to Xxxxxxx
Xxxxx Xxxxxx Inc. (the "Underwriter") for offer and sale pursuant to the terms
of an Underwriting Agreement, dated November __, 1999 (the "Underwriting
Agreement"), between the Depositor and the Underwriter. The Mortgage Loan Sale
and Contribution Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement and the Underwriting Agreement together, are hereinafter collectively
referred to as the "Agreements". Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Agreements.
The undersigned is a duly appointed ______________ of
Ameriquest L.L.C. and hereby certifies after reasonable investigation that:
1. The transfer of the Mortgage Loans by the undersigned pursuant to
the Agreements was intended to be a sale and to be reported as such under
generally accepted accounting principles ("GAAP") and for federal income tax
purposes.
2. In connection with the sale of the Mortgage Loans by the undersigned
pursuant to the Agreements, the undersigned (i) was solvent at all relevant
times prior thereto and was not rendered insolvent thereby, (ii) after giving
effect thereto, is able to pay its debts as they mature, (iii) was not left with
unreasonably small capital for the business in which engaged and proposed to be
engaged, (iv) had and has no intention of commencing any bankruptcy, insolvency
or similar proceeding, (v) did not and does not have any intent to hinder, delay
or defraud any of the undersigned's creditors,
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(vi) had a valid business reason therefor and (vii) received new value and
consideration constituting reasonably equivalent value and fair consideration.
3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Mortgage Loan or Certificate, except as
described in the Agreements.
4. The factual assumptions in the Opinion Letter are accurate,
including without limitation the assumption that the Retained Certificates would
be carried on its balance sheet at a value which in its determination is equal
to an amount that is less than 10% of the Mortgage Loan Purchase Price as
defined in the Opinion Letter.
The undersigned has executed this Certificate as of November __, 1999.
AMERIQUEST SECURITIES L.L.C.
By:
-----------------------------
Name:
Title:
EXHIBIT 5
[FORM OF OPINION OF COUNSEL TO THE SELLER]
TO: Addressees on Schedule A
November __, 1999
Re: Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
------------------------------------------------
Ladies and Gentlemen:
I am General Counsel of Ameriquest Securities L.L.C. (the "Company")
and have acted as counsel to the Company in connection with the sale by the
Company of certain residential first mortgage loans (the "Mortgage Loans")
pursuant to the Mortgage Loan Purchase Agreement, dated as of November 8, 1999
(the "Purchase Agreement"), among the Company as seller, Salomon Brothers
Mortgage Securities VII, Inc. as purchaser (the "Purchaser") and Ameriquest
Mortgage Company as originator (the "Originator"). In connection with the sale
of the Mortgage Loans, the Company has entered into the Mortgage Loan Sale and
Contribution Agreement, dated as of November 8, 1999, between the Company and
the Originator (the "Sale and Contribution Agreement"). The Sale and
Contribution Agreement and the Purchase Agreement are referred to herein as the
"Agreements". Capitalized terms not defined herein have the meanings set forth
in the Agreements.
As such counsel, I have examined original or reproduced or certified
copies of the articles of formation and operating agreement of the Company, as
amended to date, records of actions taken by the Board of Directors of the
Company and copies of the Agreements, the Prospectus Supplement, dated November
8, 1999 (the "Prospectus Supplement"), to the Prospectus, dated June 23, 1999,
relating to the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class M-3
Certificates. I have also examined such other documents, papers, statutes and
authorities as I deem necessary as a basis for the opinions hereinafter set
forth. In all such examinations made by me in connection with this opinion, I
have assumed the genuineness of all signatures and the completeness and
authenticity of all records and all documents submitted to me as copies thereof.
As to various matters of fact relevant to the opinions hereinafter expressed, I
have relied upon the representations and warranties contained in the Agreements
and statements and certificates of officers and representatives of the Company.
As to matters in Paragraph 5 below with respect to which I opine based on my
knowledge, I have relied solely upon inquiries made to and responses received
from officers and representatives of the Company and the documents furnished to
me by representatives of the Company, which documents such representatives have
informed me include the only material indentures, agreements and instruments to
which the Company is a party or by which it or any of its properties or assets
are bound.
Salomon Brothers Mortgage Securities VII, Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
November __, 1999 Page 2.
In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.
In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.
I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of Nevada.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company is duly authorized and qualified to transact any and all
business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure the enforceability of each Mortgage Loan.
2. The Company has the power to engage in the transactions contemplated
by each and all of the Agreements and has all requisite power, authority and
legal right to execute and deliver the Agreements and any other documents
delivered in connection therewith and to perform and observe the terms and
conditions of such instruments.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.
4. No consent, approval, authorization, license, permit or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the
Salomon Brothers Mortgage Securities VII, Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
November __, 1999 Page 3.
Company of, or compliance by the Company with, any or all of the Agreements or
the consummation of the transactions contemplated by the Agreements.
5. The execution and delivery of the Agreements by the Company, the
consummation of any other of the transactions contemplated by the Agreements and
the fulfillment of or compliance with the terms of the Agreements are in the
ordinary course of business of the Company and will not (A) result in a material
breach of any term or provision of the certificate of formation or by-laws of
the Company or (B) materially conflict with, result in a material breach,
violation or acceleration of or result in a material default under the terms of
any other material agreement or instrument of which I have knowledge to which
the Company is a party or by which it may be bound, or any statute, order or
regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Company;
and the Company is not a party to, bound by or in material breach or violation
of any material indenture or other material agreement or instrument of which I
have knowledge, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which materially and adversely affects or, to
the best of my knowledge, will in the future materially and adversely affect,
(x) the ability of the Company to perform its obligations under the Agreements
or (y) the business, operations, financial condition, properties or assets of
the Company taken as a whole.
6. To the best of my knowledge, there is no action, suit, proceeding or
investigation pending or threatened against the Company which, in my judgment,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would draw into question
the validity of the Agreements, the Certificates or the Mortgage Loans or of any
action taken or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of the
Company to perform its obligations under the terms of the Agreements.
This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.
Respectfully submitted,
SCHEDULE A
Salomon Brothers Mortgage Xxxxx'x Investors Service
Securities VII, Inc. 00 Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Standard and Poor's Rating Services Duff & Xxxxxx Credit Rating Co.
26 Broadway 00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Norwest Bank Minnesota, N.A. Salomon Xxxxx Xxxxxx Inc.
Norwest Center 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Sixth & Marquette New York, New York 10013
Xxxxxxxxxxx, Xxxxxxxxx 00000
Chase Bank of Texas National Association
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
EXHIBIT 6
[FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]
I, ______________ hereby certify that I am the duly appointed
_______________ of Ameriquest Mortgage Company, a Delaware corporation (the
"Originator"), and further certify, on behalf of the Originator, as follows:
1. Attached hereto as Exhibit A is a true and correct copy of
the Certificate of Incorporation and By-laws of the Originator, both of
which are in full force and effect on the date hereof. There has been
no amendment or other document filed affecting the Certificate of
Incorporation of the Originator since April 29, 1997, and no such
amendment has been authorized. There has been no amendment or other
document filed affecting the By-laws of the Originator since September
14, 1994, and no such amendment has been authorized. Attached hereto as
Exhibit B is a certificate of good standing, dated November __, 1999
issued by the State of Delaware with respect to the Originator. No
event has occurred since the date thereof that has affected the good
standing of the Originator under the laws of the State of Delaware.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the
Originator that, if adversely determined, individually or in the
aggregate, would adversely affect the Originator's ability to perform
its obligations under (i) the Mortgage Loan Sale and Contribution
Agreement, dated November __, 1999 (the "Mortgage Loan Sale and
Contribution Agreement"), between Ameriquest Securities L.L.C. (the
"Purchaser") and the Originator; (ii) the Mortgage Loan Purchase
Agreement, dated November __, 1999 (the "Purchase Agreement") among the
Originator, the Purchaser and Salomon Brothers Mortgage Securities VII,
Inc. (the "Depositor") or (iii) the Pooling and Servicing Agreement,
dated as of November 1, 1999 (the "Pooling and Servicing Agreement"),
among the Depositor as depositor, the Originator as master servicer (in
such capacity, the "Master Servicer") and Norwest Bank Minnesota,
National Association as Trustee. No proceedings looking toward merger,
consolidation or liquidation, dissolution or bankruptcy of the
Originator are pending or contemplated.
3. Each person who, as an officer or representative of the
Originator or the Master Servicer, signed the Mortgage Loan Sale and
Contribution Agreement, the Purchase Agreement or the Pooling and
Servicing Agreement and any other document delivered prior hereto or on
the date hereof in connection with the purchase described in the
Mortgage Loan Sale and Contribution Agreement or the Purchase
Agreement, or the transactions described in the Pooling and Servicing
Agreement was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing
on such documents are their genuine signatures.
4. Each of the Mortgage Loans referred to in the Mortgage Loan
Sale and Contribution Agreement, the Purchase Agreement and the Pooling
and Servicing Agreement was originated in accordance with Section
6(xiv) of the Purchase Agreement.
Page 3.
5. All of the representations and warranties of the Originator
under the Mortgage Loan Sale and Contribution Agreement and the
Purchase Agreement, and of the Master Servicer under the Pooling and
Servicing Agreement are true and correct in all material respects as of
the Closing Date (subject, in the case of the Closing Schedule
delivered pursuant to the Mortgage Loan Sale and Contribution
Agreement, to such amendments thereto as were duly made on or before
the date hereof) and no event has occurred which, with notice or the
passage of time or both, would constitute a default under the Mortgage
Loan Sale and Contribution Agreement or the Purchase Agreement, or an
Event of Default under the Pooling and Servicing Agreement.
6. The information set forth in the Mortgage Loan Schedule
attached as an exhibit to the Mortgage Loan Sale and Contribution
Agreement, the Purchase Agreement and to the Pooling and Servicing
Agreement is true and correct in all material respects.
7. The information regarding the Originator, its financial
condition and its mortgage loan delinquency, foreclosure and loss
experience, underwriting standards, lending activities and loan sales,
production and servicing and collection practices, as is set forth
herein is accurate in all material respects.
8. The information contained in the Prospectus Supplement,
dated November __, 1999 relating to the Mortgage Loans, the Originator,
and its loan portfolio, specifically the information, in the summary
under the subheadings "Summary of the Prospectus Supplement--The
Mortgage Loans", "Risk Factors--Certain Mortgage Loans Have High
Loan-to-Value Ratios Which May Present a Greater Risk of Loss With
Respect to Such Mortgage Loans, --Certain Mortgage Loans Are Delinquent
as of the Cut-off Date, Which May Present a Greater Risks of Loss With
Respect to Such Mortgage Loans, --The Mortgage Loans Are Concentrated
in the State of California, Which May Present a Greater Risk of Loss
With Respect to Such Mortgage Loans, --The Rate and Timing of Principal
Distributions on the Offered Certificates Will Be Affected by
Prepayment Speeds (solely to the extent that such section sets forth
the percentage of Mortgage Loans which, by aggregate principal balance
as of the Cut-off Date, contain Prepayment Charges), --Violation of
Various Federal and State Laws May Result in Losses on the Mortgage
Loans", "The Mortgage Pool" and "Pooling and Servicing Agreement--The
Originator and Master Servicer", is true and accurate in all material
respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
9. With respect to its sale of the Mortgage Loans and the
related transactions and undertakings contemplated by the Mortgage Loan
Sale and Contribution Agreement and the Purchase Agreement, the
Originator has complied with all the obligations by which it is bound
and has satisfied all the conditions on its part to be performed or
satisfied prior to the Closing Date.
Page 4.
10. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Sale and Contribution
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Originator.
Dated: November __, 1999
By:
-----------------------------------
Name:
Title:
I, _______________, an ___________________ of Ameriquest
Mortgage Company hereby certify that _______________ is the duly appointed,
qualified and acting ______________ of the Originator and that the signature
appearing above is her genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: November __, 1999
By:
-----------------------------------
Name:
Title:
EXHIBIT 7
[FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]
Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
CERTIFICATE OF
AMERIQUEST MORTGAGE COMPANY
Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Ameriquest Mortgage Company ("Ameriquest") to Ameriquest Securities
L.L.C. (the "Purchaser") pursuant to a Mortgage Loan Sale and Contribution
Agreement (the "Sale and Contribution Agreement"), dated November __, 1999,
between Ameriquest and the Purchaser (the "Purchase Agreement"), the transfer of
the Mortgage Loans by the Purchaser to Salomon Brothers Mortgage Securities VII,
Inc. (the "Depositor") pursuant to a Mortgage Loan Purchase Agreement, dated
November __, 1999 (the "Purchase Agreement") and the simultaneous issuance of
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class CE, Class P, Class R-I, Class
R-II and Class R-III (the "Certificates"), pursuant to a Pooling and Servicing
Agreement, dated as of November 1, 1999 (the "Pooling and Servicing Agreement")
among the Depositor as depositor, Ameriquest as master servicer (in such
capacity, the "Master Servicer") and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"). In consideration for its purchase of the
Mortgage Loans, the Depositor will deliver to Ameriquest Securities L.L.C. the
Class CE, Class P, Class R-I, Class R-II and Class R-III Certificates. The
Depositor will sell the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class M-3
Certificates to Xxxxxxx Xxxxx Xxxxxx Inc. (the "Underwriter") for offer and sale
pursuant to the terms of an Underwriting Agreement, dated November __, 1999 (the
"Underwriting Agreement"), between the Depositor and the Underwriter. The
Mortgage Loan Sale and Contribution Agreement, the Purchase Agreement, the
Pooling and Servicing Agreement and the Underwriting Agreement together, are
hereinafter collectively referred to as the "Agreements". Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Agreements.
The undersigned is a duly appointed ______________ of
Ameriquest and hereby certifies after reasonable investigation that:
1. The transfer of the Mortgage Loans by the undersigned pursuant to
the Agreements was intended to be a sale and to be reported as such under
generally accepted accounting principles ("GAAP") and for federal income tax
purposes.
2. In connection with the sale of the Mortgage Loans by the undersigned
pursuant to the Agreements, the undersigned (i) was solvent at all relevant
times prior thereto and was not rendered insolvent thereby, (ii) after giving
effect thereto, is able to pay its debts as they mature, (iii) was not left with
unreasonably small capital for the business in which engaged and proposed to be
engaged, (iv) had and has no intention of commencing any bankruptcy, insolvency
or similar proceeding, (v) did not and does not have any intent to hinder, delay
or defraud any of the undersigned's creditors,
Page 2.
(vi) had a valid business reason therefor and (vii) received new value and
consideration constituting reasonably equivalent value and fair consideration.
3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Mortgage Loan or Certificate, except as
described in the Agreements.
4. The factual assumptions in the Opinion Letter are accurate,
including without limitation the assumption that the Retained Certificates would
be carried on its balance sheet at a value which in its determination is equal
to an amount that is less than 10% of the Mortgage Loan Purchase Price as
defined in the Opinion Letter.
The undersigned has executed this Certificate as of November __, 1999.
AMERIQUEST MORTGAGE COMPANY
By:
--------------------------------
Name:
Title:
EXHIBIT 8
[FORM OF OPINION OF COUNSEL TO THE ORIGINATOR]
TO: Addressees on Schedule A
November __, 1999
Re: Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates
Series 1999-AQ2
------------------------------------------------
Ladies and Gentlemen:
I am General Counsel of Ameriquest Mortgage Company (the "Company") and
have acted as counsel to the Company in connection with the servicing by the
Company of certain residential first mortgage loans (the "Mortgage Loans")
pursuant to the Pooling and Servicing Agreement, dated as of November 1, 1999
(the "Pooling and Servicing Agreement"), among Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor"), the Company and Norwest
Bank Minnesota, National Association as trustee (the "Trustee"), relating to the
issuance and sale by the Depositor of Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2, designated as the Class X-0, Xxxxx X-0, Class
M-1, Class M-2, Class M-3, Class CE, Class P, Class R-I, Class R-II and Class
R-III (collectively, the "Certificates"). In connection with the sale and
servicing of the Mortgage Loans, the Company has entered into the Custodial
Agreement, dated as of November __, 1999, among the Trustee, the Company, the
Depositor and Chase Bank of Texas National Association as custodian (the
"Custodial Agreement") and the Mortgage Loan Sale and Contribution Agreement,
dated November __, 1999, between the Company and Ameriquest Securities L.L.C.
(the "Purchaser") (the "Sale and Contribution Agreement"). The Sale and
Contribution Agreement, the Purchase Agreement, the Custodial Agreement, the
Pooling and Servicing Agreement, are collectively referred to herein as the
"Agreements". Capitalized terms not defined herein have the meanings set forth
in the Agreements.
As such counsel, I have examined original or reproduced or certified
copies of the certificate of incorporation and bylaws of the Company, as amended
to date, records of actions taken by the Board of Directors of the Company and
copies of the Agreements, the Prospectus Supplement, dated November __, 1999
(the "Prospectus Supplement"), to the Prospectus, dated June 23, 1999, relating
to the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class M-3 Certificates. I
have also examined such other documents, papers, statutes and authorities as I
deem necessary as a basis for the opinions hereinafter set forth. In all such
examinations made by me in connection with this opinion, I have assumed the
genuineness of all signatures and the completeness and authenticity of all
records and all documents submitted to me as copies thereof. As to various
matters of fact relevant to the opinions hereinafter expressed, I have relied
upon the representations and warranties contained in the Agreements and
statements and certificates of officers and representatives of the Company. As
to matters in Paragraph 5 below with respect to which I opine based on my
knowledge, I have relied
Salomon Brothers Mortgage Securities VII, Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Ameriquest Securities L.L.C.
November __, 1999 Page 2.
solely upon inquiries made to and responses received from officers and
representatives of the Company and the documents furnished to me by
representatives of the Company, which documents such representatives have
informed me include the only material indentures, agreements and instruments to
which the Company is a party or by which it or any of its properties or assets
are bound.
In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.
In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.
I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of California.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company is duly authorized and qualified to transact any and all
business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of the Pooling and Servicing
Agreement.
2. The Company has the power to engage in the transactions contemplated
by each and all of the Agreements and has all requisite power, authority and
legal right to execute and deliver the Agreements and any other documents
delivered in connection therewith and to perform and observe the terms and
conditions of such instruments.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective
Salomon Brothers Mortgage Securities VII, Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Ameriquest Securities L.L.C.
November __, 1999 Page 3.
terms against the Company, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally and by general equity
principles regardless of whether such enforcement is considered in a proceeding
in equity or at law.
4. No consent, approval, authorization, license, permit or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of, or compliance by the Company with, any or all of
the Agreements or the consummation of the transactions contemplated by the
Agreements.
5. The execution and delivery of the Agreements by the Company, the
servicing of the Mortgage Loans by the Company, the consummation of any other of
the transactions contemplated by the Agreements and the fulfillment of or
compliance with the terms of the Agreements are in the ordinary course of
business of the Company and will not (A) result in a material breach of any term
or provision of the charter or by-laws of the Company or (B) materially conflict
with, result in a material breach, violation or acceleration of or result in a
material default under the terms of any other material agreement or instrument
of which I have knowledge to which the Company is a party or by which it may be
bound, or any statute, order or regulation applicable to the Company of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Company; and the Company is not a party to, bound by or in
material breach or violation of any material indenture or other material
agreement or instrument of which I have knowledge, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the best of my knowledge, will in the
future materially and adversely affect, (x) the ability of the Company to
perform its obligations under the Agreements or (y) the business, operations,
financial condition, properties or assets of the Company taken as a whole.
6. To the best of my knowledge, there is no action, suit, proceeding or
investigation pending or threatened against the Company which, in my judgment,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would draw into question
the validity of the Agreements, the Certificates or the Mortgage Loans or of any
action taken or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of the
Company to perform its obligations under the terms of the Agreements.
7. Based upon my participation, nothing has come to my attention that
has caused me to believe that the information contained in the Prospectus
Supplement, dated November __, 1999 relating to the Mortgage Loans, the Seller,
and its loan portfolio, specifically the information, in the summary under the
subheadings "Summary--The Mortgage Loans","Risk Factors--Certain Mortgage Loans
Have High Loan-to-Value Ratios Which May Present a Greater Risk of Loss With
Salomon Brothers Mortgage Securities VII, Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Ameriquest Securities L.L.C.
November __, 1999 Page 4.
Respect to Such Mortgage Loans, --Certain Mortgage Loans Are Delinquent as of
the Cut-off Date, Which May Present a Greater Risks of Loss With Respect to Such
Mortgage Loans, --The Mortgage Loans Are Concentrated in the State of
California, Which May Present a Greater Risk of Loss With Respect to Such
Mortgage Loans, --The Rate and Timing of Principal Distributions on the Offered
Certificates Will Be Affected by Prepayment Speeds, --Violation of Various
Federal and State Laws May Result in Losses on the Mortgage Loans, the "Mortgage
Pool" and "Pooling and Servicing Agreement--The Originator and Master Servicer"
and with respect to any private placement memorandum or other offering document,
any information of a comparable nature, is true and accurate and does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.
Respectfully submitted,
-------------------------------
EXHIBIT 9
Form of Subsequent Transfer Instrument
Pursuant to this Subsequent Transfer Instrument, dated January
__, 2000 (the "Instrument"), among Salomon Brothers Mortgage Securities VII,
Inc. as seller (the "Depositor") and Norwest Bank Minnesota, National
Association as trustee (the "Trustee") of the Salomon Brothers Mortgage
Securities VII, Inc., Floating Rate Mortgage Pass-Through Certificates, Series
1999-AQ2, and pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 1999 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, Ameriquest Mortgage Company as master servicer and the Trustee as
trustee, the Depositor and the Trustee agree to the sale by the Depositor and
the purchase by the Trustee on behalf of the Trust Fund, of the Mortgage Loans
listed on the attached Schedule of Mortgage Loans (the "Subsequent Mortgage
Loans").
Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, among the Depositor as
purchaser, the Master Servicer as originator and Ameriquest Securities L.L.C. as
seller, to the extent of the Subsequent Mortgage Loans, a copy of which
agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A
hereto.
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
PRECEDENT.
(a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. GOVERNING LAW.
This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.
Section 6. SUCCESSORS AND ASSIGNS.
This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as trustee
By:
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Attachments
-----------
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
ATTACHMENT A
------------
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: January 1, 2000
2. Subsequent Transfer Date: January 7, 2000
3. Aggregate Principal Balance of the Subsequent Mortgage
Loans as of the Subsequent Cut-off Date: $______________
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date provided, however that
approximately 1.49% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, may be thirty days or more
but less than sixty days delinquent in their monthly payments as of the related
Subsequent Cut-off Date and approximately 0.49% of the Subsequent Mortgage
Loans, by aggregate principal balance as of the related Subsequent Cut-off Date,
may be sixty days or more but less than ninety days delinquent in their monthly
payments as of the related Subsequent Cut-off Date; (ii) the stated term to
maturity of the Subsequent Mortgage Loan will not be less than 345 months and
will not exceed 360 months; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 90.00%; (v) the Subsequent Mortgage Loans will
have as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 15 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 7.50% or greater than 16.00%; (vii) the
Subsequent Mortgage Loan will have been serviced by the Master Servicer since
origination or purchased by the Depositor; (viii) the Subsequent Mortgage Loan
must have a first Monthly Payment due on or before February 1, 1999 and (ix) the
Subsequent Mortgage Loan will be underwritten in accordance with the criteria
set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than 9.556% and not more than 9.750%; (iii) have a weighted average
Loan-to-Value Ratio of not more than 74.265%; (iv) have no Mortgage Loan with a
principal balance in excess of $602,000 and (v) have a weighted average Gross
Margin of not less than 6.467%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the related Subsequent Cut-off
Date.
EXHIBIT E-1
-----------
REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
----------------
Name of Mortgagor: ______________________________
Master Servicer
Loan No.: ______________________________
Trustee/Custodian
-----------------
Name: ______________________________
Address: ______________________________
______________________________
Trustee/Custodian
Mortgage File No.: ______________________________
Depositor
---------
Name: SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
Address: ______________________________
______________________________
Certificates: Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2.
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of Floating
Rate Mortgage Pass-Through Certificates, Series 1999-AQ2, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of November 1, 1999, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, 19__, in the original principal sum
of $__________, made by _____________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County Recorder's
Office of the County of _______________, State of _______________________
in book/reel/docket ____________ of official records at page/image
____________.
( ) Other documents, including any amendments, assignments or other assumptions
of the Mortgage Note or Mortgage.
() ____________________________________________________________
() ____________________________________________________________
() ____________________________________________________________
() ____________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted
to the Collection Account and except as expressly provided in the
Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer
shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the Master Servicer's possession,
custody or control.
Dated:
[MASTER SERVICER]
By:____________________________________
Name:
Title:
EXHIBIT E-2
-----------
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-AQ2
________________________________________________ HEREBY CERTIFIES THAT HE/SHE IS
AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:___________________ BORROWER'S NAME:________________________
COUNTY:________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
_______________________________ DATED:___________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT F-1
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Salomon Brothers Mortgage Securities VII, Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 1999-AQ2,
Class ___, representing a ___% Class ___ Percentage Interest
--------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
November 1, 1999, among Salomon Brothers Mortgage Securities VII, Inc. as
Depositor, Ameriquest Mortgage Company as Master Servicer and Norwest Bank
Minnesota, National Association as Trustee (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.
Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:______________________________________
Name:
Title:
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Salomon Brothers Mortgage Securities VII, Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 1999-AQ2,
Class ___, representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
the sale to it is being made in reliance on Rule 144A. The Transferee is
acquiring the Certificates for its own account or for the account of a
qualified institutional buyer, and understands that such Certificate may be
resold, pledged or transferred only (i) to a person reasonably believed to
be a qualified institutional buyer that purchases for its own account or
for the account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933 Act.
2. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism
associated with the Certificates, that it has requested.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of November 1, 1999, among Salomon Brothers Mortgage Securities VII,
Inc. as Depositor, Ameriquest Mortgage Company as Master Servicer and Norwest
Bank Minnesota, National Association as Trustee, pursuant to which the
Certificates were issued.
[TRANSFEREE]
By:______________________________________
Name:
Title:
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Norwest Bank Minnesota, National Association as Trustee,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.
___ CORPORATION, ETC. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is attached
hereto.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over any
such institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
___________________
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
$25,000,000 as demonstrated in its latest annual financial statements,
a copy of which is attached hereto.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the District of
Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.
Dated:
______________________________________
Print Name of Transferee
By:___________________________________
Name:
Title:
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Norwest Bank Minnesota, National Association, as Trustee,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
________________________________________
Print Name of Transferee or Advisor
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Transferee
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as defined in
Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.
3. As of the date specified below (which is not earlier than the last
day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser _____________________________________________________________
By: (Signature) _____________________________________________________________
Name of Signatory _____________________________________________________________
Title _________________________________________________________________________
Date of this certificate ______________________________________________________
Date of information provided in paragraph 3 ___________________________________
EXHIBIT F-2
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
____________________________________ , being duly sworn, deposes,
represents and warrants as follows:
1. I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Salomon Brothers Mortgage Securities VII,
Inc., Floating Rate Mortgage Pass- Through Certificates, Series 1999-AQ2, [Class
R-I] [and Class R-II][Class R-III] (the "Class R Certificates"), on behalf of
whom I make this affidavit and agreement. Capitalized terms used but not defined
herein have the respective meanings assigned thereto in the Pooling and
Servicing Agreement pursuant to which the Class R Certificates were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 199___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual
interest, unless no significant purpose of the transfer is to impede the
assessment or collection of tax.
4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is ___________________.
8. The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(d) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.
10. The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class R Certificates, and hereby represents to and for the benefit of the
person from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.
12. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
14. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it knows, or knows facts that should lead it to believe, that any such
representations are false.
15. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
[17. The Owner of the Class R-III Certificate, hereby agrees that in
the event that the Trust Fund created by the Pooling and Servicing Agreement is
terminated pursuant to Section 9.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class CE Certificates any amounts in excess of
par received in connection with such termination. Accordingly, in the event of
such termination, the Trustee is hereby authorized to withhold any such amounts
in excess of par and to pay such amounts directly to the Holders of the Class CE
Certificates. This agreement shall bind and be enforceable against any
successor, transferee or assigned of the undersigned in the Class R-III
Certificate. In connection with any transfer of the Class R-III Certificate, the
Owner shall obtain an agreement substantially similar to this clause from any
subsequent owner.]
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By:_________________________________________
Name:
Title: [Vice] President
ATTEST:
By:___________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 199___.
______________________________________
Notary Public
County of __________________
State of ___________________
My Commission expires:
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
_______________________________________ , being duly sworn, deposes,
represents and warrants as follows:
1. I am a ____________________ of _____________________________ (the "Owner"),
a corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.
2. The Owner is not transferring the [Class R-I][Class R-II][Class
R-III] (the "Residual Certificates") to impede the assessment or collection of
any tax.
3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit F-2. The Owner does not know or believe that
any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 199___.
[OWNER]
By:________________________________
Name:
Title: [Vice] President
ATTEST:
By:______________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of __________, 199___.
__________________________________
Notary Public
County of _______________
State of ________________
My Commission expires:
EXHIBIT G
---------
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 199__
Salomon Brothers Mortgage Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Norwest Bank Minnesota,
National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass-Through Certificates,
Series 1999-AQ2, Class ___
-------------------------------------------------
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Salomon Brothers Mortgage Securities VII, Inc.
Floating Rate Mortgage Pass- Through Certificates, Series 1999-AQ2, Class ___
(the "Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of November 1, 1999 among Salomon
Brothers Mortgage Securities VII, Inc. as depositor (the "Depositor"),
Ameriquest Mortgage Company as master servicer (the "Master Servicer") and
Norwest Bank Minnesota, National Association as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1) or
(2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or other retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds
and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that is subject to Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
(any of the foregoing, a "Plan"), (ii) are not being acquired with "plan
assets" of a Plan within the meaning of the Department of Labor ("DOL")
regulation, 29 C.F.R. ss. 2510.3-101, and (iii) will not be transferred to
any entity that is deemed to be investing in plan assets within the meaning
of the DOL regulation at 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable law,
will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Trustee or
the Master Servicer to any obligation in addition to those undertaken in
the Pooling and Servicing Agreement and each of the following statements
are accurate: (a) the Transferee is an insurance company; (b) the source of
funds used to purchase such Certificates is an "insurance company general
account" (as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60 issued by the DOL); (c) the conditions set forth in PTCE
95-60 have been satisfied and the purchase, holding and transfer of
Certificates by or on behalf of the Transferee are exempt under PTCE 95-60;
and (d) there is no Plan with respect to which the amount of such general
account's reserves and liabilities for contracts held by or on behalf of
such Plan and all other Plans maintained by he same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same employee
organization exceed 10% of the total of all reserves and liabilities of
such general account (as determined under PTCE 95-60) as of the date of the
acquisition of the Certificates.
Very truly yours,
By:______________________________________
Name:
Title:
EXHIBIT H
---------
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement"), dated as of November 10, 1999, by and among
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, not individually, but solely as
Trustee (including its successors under the Pooling and Servicing Agreement
defined below, the "Trustee"), AMERIQUEST MORTGAGE COMPANY (together with any
successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Master Servicer"), SALOMON BROTHERS MORTGAGE SECURITIES
VII, INC. (the "Depositor") and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
(together with any successor in interest or any successor appointed hereunder,
the "Custodian").
W I T N E S S E T H T H A T :
- - - - - - - - - - - - - -
WHEREAS, the Master Servicer, the Trustee and the Depositor
have entered into a Pooling and Servicing Agreement, dated as of November 1,
1999, relating to the issuance of Salomon Brothers Mortgage Securities VII,
Inc., Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2 (as in
effect on the date of this Agreement, the "Pooling and Servicing Agreement", and
as amended and supplemented from time to time, the "Pooling and Servicing
Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor under the Pooling and Servicing
Agreement, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Master Servicer and the Custodian hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Appendix A hereto, unless
otherwise required by the context herein.
2
ARTICLE II
Custody of Mortgage Documents
Section 2.1. CUSTODIAN TO ACT AS AGENT; ACCEPTANCE OF MORTGAGE
FILES. The Custodian, as the duly appointed agent and bailee of the Trustee for
these purposes, hereby accepts the agency contemplated hereunder and
acknowledges receipt as of the Closing Date of the documents listed in Section
2.1(a) and (b) and, as agent for the Trustee, agrees to verify receipt of the
following documents pertaining to each of the Mortgage Loans identified on the
Mortgage Loan Schedule attached to the Pooling and Servicing Agreement listed in
Section 2.1(c), (d), (e) and (f) in accordance with Section 2.2 hereof:
(a) the original Mortgage Note, endorsed in blank or in the
following form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee under the applicable agreement, without
recourse," with all prior and intervening endorsements showing a
complete chain of endorsement from the Seller to the Person so
endorsing to the Trustee;
(b) the original Mortgage with evidence of recording thereon,
and a copy, certified by the appropriate recording office, of the power
of attorney, if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon;
(c) an original Assignment of the Mortgage in blank;
(d) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the Seller to the
Person assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (c);
(e) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any in the related
Mortgage File; and
(f) the original lender's title insurance policy, together with
all endorsements or riders which were issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged Property represented therein as a fee
interest vested in the Mortgagor, or in the event such original title
policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow
company.
In furtherance of facilitating the acknowledgment of such
receipt by the Custodian, the Trustee hereby instructs the Custodian to cause
the endorsement or execution, as the case may be, of the documents listed in
Section 2.1(a) and (c) to be completed by the Custodian in the forms prescribed
by Section 2.1(a) and (c).
3
The Master Servicer (in its capacity as Originator) shall
promptly (and in no event later than thirty (30) Business Days, subject to
extension upon a mutual agreement between the Master Servicer and the Trustee,
following the later of (i) the Closing Date, (ii) the date of receipt by the
Master Servicer of the Assignment to be completed and recorded from the
Custodian and (iii) the date of receipt by the Master Servicer of the recording
information for a Mortgage) submit or cause to be submitted for recording, at no
expense to the Depositor, the Custodian, Trust Fund or the Trustee, in the
appropriate public office for real property records, each Assignment referred to
in Sections 2.1(c) and (d) above and shall execute each original Assignment in
the following form: "Norwest Bank Minnesota, National Association, as Trustee
under the applicable agreement". In the event that any such Assignment is lost
or returned unrecorded because of a defect therein, the Master Servicer (in its
capacity as Originator) shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be completed and submitted for recording with
respect to any Mortgage Loan only if the Trustee and each Rating Agency has
received an opinion of counsel, satisfactory in form and substance to the
Trustee and each Rating Agency, to the effect that the recordation of such
assignments in any specific jurisdiction is not necessary to protect the
Trustee's interest in the related Mortgage Note; provided further, however,
notwithstanding the delivery of any opinion of counsel, each assignment of
Mortgage shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) failure of the Master Servicer Termination
Test, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Originator, (iv) the occurrence of a servicing transfer as described in
Section 7.02 hereof and (iv) if the Originator is not the Master Servicer and
with respect to any one assignment of Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments of Mortgage, such expense will be paid by the
Trustee.
Notwithstanding anything to the contrary contained in this
Section 2.1, in those instances where either (x) the public recording office has
not returned the original Mortgage, power of attorney or Assignment or (y) the
public recording office retains the original Mortgage, power of attorney or
Assignment after it has been recorded or such document has been lost, the
obligations of the Depositor hereunder shall be deemed to have been satisfied
upon (1) delivery by the Depositor, the Master Servicer or the Trustee to the
Custodian of a copy of such Mortgage, power of attorney or Assignment certified
by the Master Servicer in the case of (x) above or the public recording office
in the case of (y) above to be a true and complete copy of the recorded original
thereof and (2) if such copy is certified by the Seller delivery to the
Custodian, promptly upon receipt thereof of either the original or a copy of
such document certified by the public recording office to be a true and complete
copy of the original. Upon delivery to the Depositor, the Seller or the Trustee
(x) by the public recording office of any recorded original Mortgage, power of
attorney or Assignment or (y) by a title insurance or escrow company of any
lender's title insurance policy, the Depositor, the Seller or the Trustee, as
the case may be, shall promptly (and in no event later than
4
five Business Days following such receipt) deliver such document to the
Custodian. The Depositor shall deliver or cause to be delivered to the Custodian
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan. All Mortgage Loan documents held by the Custodian as to
each Mortgage Loan shall hereinafter be referred to as the "Mortgage File".
In the event that document is required pursuant to the terms
of this Section to be a part of a Mortgage File, such document shall be
delivered promptly to the Custodian.
In the event of any failure of any party to deliver any
document as provided above, the Custodian shall give prompt written notice of
such failure to the other parties to this Agreement. Once the Custodian has
given notice of such failure it is to continue to hold the Mortgage Loan and
Mortgage File unless otherwise directed.
The parties hereto agree and acknowledge that prior to the
transfer and sale of the Mortgage Loans pursuant to the Mortgage Loan Sale and
Contribution Agreement and the Mortgage Loan Purchase Agreement, all Mortgage
Loan documents delivered to the Custodian for the benefit of the Depositor and
the possession by the Custodian of such Mortgage Loan Documents shall be at the
will of the Depositor and such possession by the Custodian shall be in a
custodial capacity only.
Section 2.2. REVIEW OF MORTGAGE FILES. On the Closing Date,
the Custodian agrees, for the benefit of the Trustee and the Certificateholders,
to review each Mortgage File and to certify substantially in the form attached
hereto as Exhibit One, that as to each Mortgage Loan listed in the Mortgage Loan
Schedule, the Custodian is in possession of the Mortgage Note. Within thirty
(30) days of the Closing Date, the Custodian agrees, for the benefit of the
Trustee and the Certificateholders, to review each Mortgage File and to certify
in substantially the form attached hereto as Exhibit Two that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.1(e)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it
and are not mutilated, torn or defaced unless initiated by the related borrower
and relate to such Mortgage Loan, and (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i) through (iii), (vi), (ix), (x), (xiii), (xv) and (xvii)
through (xx) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Custodian is under no duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face, or (ii) to determine
whether any Mortgage File should include any of the documents specified in
clause (e) of Section 2.1.
5
The Mortgage Files will be delivered to the Custodian not less
than 2 days prior to the Closing Date.
Prior to the first anniversary date of this Agreement the
Custodian shall deliver to the Trustee, the Depositor and the Master Servicer a
final certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files, with any applicable exceptions
noted thereon.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above the
Custodian finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Custodian shall so notify the Trustee, the Depositor and the Master
Servicer.
Section 2.3. NOTIFICATION OF DEFECTS. Upon discovery by the
Custodian of a defect with respect to a Mortgage File (including without
limitation a missing or defective document contained therein), the Custodian
shall give prompt written notice specifying such defect to the Trustee.
Section 2.4. RELEASE OF MORTGAGE FILES. Upon (i) the payment
in full of any Mortgage Loan, or (ii) the purchase or repurchase of any Mortgage
Loan pursuant to Section 2.03 and Section 9.01 of the Pooling and Servicing
Agreement, or (iii) substitution of a Qualified Substitute Mortgage Loan for a
Deleted Mortgage Loan, and upon receipt by the Custodian of a certificate signed
by a Servicing Officer stating that all amounts required by the Pooling and
Servicing Agreement in connection with such payment, repurchase or substitution
have been deposited in the Collection Account pursuant to Section 3.10 of the
Pooling and Servicing Agreement, the Custodian shall promptly release the
related Mortgage File to the Depositor or the Master Servicer, as the case may
be.
From time to time as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Custodian, shall, upon request of the
Master Servicer and delivery to the Custodian of a Request for Release, release
the related Mortgage File to the Master Servicer. Such Request for Release shall
obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Custodian when the need therefor by the
Master Servicer no longer exists, unless: (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Certificate Account; or (ii) the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. The Master Servicer shall hold
such Mortgage Files in its possession in trust for the benefit of the
Certificateholders. Upon receipt of a certificate of a Servicing Officer stating
that such Mortgage Loan was liquidated and that all amounts received or to be
received in connection
6
with such liquidation which are required to be deposited into the Certificate
Account have been so deposited, or that such Mortgage Loan has become an REO
Property, the related Mortgage File shall be released by the Custodian to the
Master Servicer.
The Custodian shall, at the expense of any Certificateholder
and upon such Certificateholder's request, provide a written report to such
Certificateholder of all Mortgage Files released to the Master Servicer for
servicing purposes.
Section 2.5. AUDIT AND EXAMINATION OF MORTGAGE FILES. Within
48 hours notice to the Custodian, the Trustee, the Master Servicer, the
Depositor or any agent of any of them will be permitted, during the normal
business hours of the Custodian, to examine the Mortgage Files, documents,
records and other papers in possession of or under the control of the Custodian
relating to any or all of the Mortgage Loans.
Section 2.6. COPIES OF MORTGAGE FILES. Within 48 hours notice
request of the Trustee, the Master Servicer or the Depositor, the Custodian
shall provide to the Trustee, the Master Servicer or the Depositor, as the case
may be, copies of the documents which constitute the Mortgage Files. The Trustee
shall pay all reasonable costs and expenses incurred by the Custodian in
preparing such copies, which shall be in accordance with the Custodian's
then-current fee schedule.
Section 2.7. SAFEKEEPING. The Custodian shall segregate the
Mortgage Files from all other mortgages and mortgage notes and similar records
in its possession, and agrees to hold the Mortgage Files on behalf of the
Trustee for the use and benefit of all present and future Certificateholders and
to maintain accurate records pertaining to each Mortgage Note and Mortgage in
the Mortgage Files as will enable the Trustee to comply with the terms and
conditions of the Pooling and Servicing Agreement, and at all times to maintain
a current inventory thereof and to con duct periodic physical shelf inventories
of the Mortgage Files held by it under this Agreement in such a manner as shall
enable the Trustee to verify the accuracy of such inventory and record keeping.
The Custodian will promptly report to the Trustee any failure on its part to
hold the Mortgage Files as herein provided and promptly take appropriate action
to remedy any such failure.
Section 2.8. ADMINISTRATION; REPORTS. In general, the
Custodian shall provide the Trustee with notification of any change in status of
any Mortgage File. In addition, the Custodian shall assist the other parties
hereto, who are preparing routine reports to Certificateholders, at the request
of any such party, or to regulatory bodies, to the extent necessitated by the
Custodian's custody of the Mortgage Files.
7
ARTICLE III
Concerning the Custodian
Section 3.1. CUSTODIAN AS BAILEE AND AGENT OF THE TRUSTEE.
With respect to each Mortgage Note, Mortgage and other documents constituting
each Mortgage File which are delivered to the Custodian, the Custodian hereby
agrees to act as the agent and bailee of the Trustee, and to hold such documents
exclusively for all present and future Certificateholders and undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. The Custodian may not delegate any of its duties hereunder without
the prior written consent of the Trustee. The Custodian shall segregate and
maintain all documents constituting the Custodian's Mortgage File received by it
for the benefit of the Certificateholders in secure facilities in accordance
with customary standards for such custody. The Mortgage Note and Assignment of
Mortgage shall be maintained in secure fire resistant facilities. Except upon
compliance with the provisions of Sec tion 2.4 of this Agreement, no Mortgage
Note, Mortgage or other document constituting a part of a Mortgage File shall be
delivered by the Custodian to the Depositor, or the Master Servicer or otherwise
released from the possession of the Custodian.
Section 3.2. INDEMNIFICATION. The parties hereto acknowledge
that the Trustee, the Depositor and the Master Servicer shall not be liable for
the acts of the Custodian hereunder. The Custodian agrees to indemnify the
Trustee, the Depositor and the Master Servicer and any director, officer,
employee or agent of the Trustee, the Depositor and the Master Servicer for, and
to hold them harmless against, any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable attorney's fees (other than any
special, indirect, punitive or consequential damages, which shall not be paid by
the Custodian), incurred by them arising out of, or in connection with, any
suit, claim or other action relating to the Custodian's performance of this
Agreement unless such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements were imposed on,
incurred by or asserted against the Trustee, the Depositor or the Master
Servicer because of the breach by such party of their obligations hereunder, or
because of such party's negligence, lack of good faith or willful misconduct on
the part of such party or any of its directors, officers, agents or employees.
Such indemnification shall survive the termination or discharge of this
Agreement, and the resignation or removal of the Custodian hereunder.
In the event that the Custodian fails to produce any document contained
in the Mortgage File or any other document related to a Mortgage Loan that was
in its possession pursuant to Section 2.1 within five (5) Business Days after
written request therefor by the Trustee, the Master Servicer or the Depositor in
accordance with the terms and conditions of this Agreement; provided that (i)
the Custodian previously delivered to the Trustee, the Master Servicer and the
Depositor a certification in the form attached hereto as Exhibit Two and/or
Exhibit Three which did not list such document as an exception on the date of
such certification; (ii) such document is not outstanding pursuant to a Request
for Release in the form attached hereto as Exhibit Four; and (iii) such document
was held by the Custodian on behalf of the Trustee, the Master Servicer or the
Depositor, as applicable (a "Custodial Delivery Failure"), then the Custodian
shall (a) with respect to any missing Mortgage
8
Note, promptly deliver to the Trustee, the Master Servicer or the Depositor,
upon request, a Lost Note Affidavit in the form of Exhibit Nine hereto and (b)
with respect to any missing document related to such Mortgage Loan, including
but not limited to a missing Mortgage Note, indemnify the Trustee, the Master
Servicer or the Depositor in the same manner as set forth in the preceding
paragraph of this Section 3.2. In the event that such original Mortgage Note is
subsequently found and delivered to the Trustee, the Master Servicer or the
Depositor, as applicable, such party shall return the Lost Note Affidavit to the
Custodian.
The Trustee agrees to indemnify and hold the Custodian and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Custodial
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements were imposed on, incurred by or asserted
against the Custodian because of the Custodian's negligence, lack of good faith
or willful misconduct on the part of the Custodian or any of its directors,
officers, agents or employees. The Master Servicer agrees to indemnify and hold
the Custodian and its directors, officers, agents and employees harmless against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including reasonable attorney's fees, that may be imposed on,
incurred by, or asserted against it or them in any way relating to or arising
out of this Custodial Agreement or any action taken or not taken by it or them
hereunder unless such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements were imposed on,
incurred by or asserted against the Custodian because of a Custodial Delivery
Failure or the Custodian's gross negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees. The foregoing indemnification shall survive any termination
or assignment of this Custodial Agreement.
Section 3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. TRUSTEE TO PAY CUSTODIAN'S FEES AND EXPENSES. The
Trustee covenants and agrees to pay to the Custodian monthly on each
Distribution Date, and the Custodian shall be entitled to, a fee of 1/12 of
0.0035% per annum multiplied by the aggregate Scheduled Principal Balance of the
Mortgage Loans and any REO Properties as of the second preceding Due Date (or,
in the case of the first Distribution Date, as of the Cut-off Date) as
compensation for all services rendered by it in the exercise and performance of
any of the powers and duties hereunder of the Custodian, and the Trustee will
pay or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
9
Section 3.5. CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans by giving written notice thereof to the Depositor, the
Master Servicer and the Trustee. Upon receiving such notice of resignation, the
Trustee shall either: (1) take custody of the Mortgage Files itself and give
prompt notice thereof to the Depositor, the Master Servicer, and the Custodian
or (2) promptly appoint a successor Custodian by written instrument, in
duplicate, which instrument shall be delivered to the resigning Custodian and to
the successor Custodian. If the Trustee shall not have taken custody of the Xxxx
xxxx Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time. In such
event, the Trustee shall appoint, or petition a court of competent jurisdiction
to appoint, a successor Custodian hereunder. Any successor Custodian shall be a
depository institution or a trust company subject to supervision by federal or
state authority and shall be able to satisfy the other requirements contained in
Section 3.7.
Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Depositor.
In the event of the removal or resignation of the Custodian,
the Custodian shall transfer all files to the successor Custodian within 60 days
after receipt of tender of notice of removal or resignation.
Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, provided such Person shall be able to satisfy the requirements in
Section 3.7, 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 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution or a trust company subject
to supervision by a federal or state authority, has a combined capital and
surplus of at least $10,000,000 and is qualified to do business
in the jurisdiction in which it will hold any Mortgage File.
Section 3.8. LIABILITY OF THE CUSTODIAN. In the absence of bad
faith on the part of the Custodian, the Custodian may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any request, instructions, certificate, opinion or
10
other document furnished to the Custodian, reasonably believed by the Custodian
to be genuine and to have been signed or presented by the proper party or
parties and conforming to the requirements of this Custodial Agreement; but in
the case of any loan document or other request, instruction, document or
certificate which by any provision hereof is specifically required to be
furnished to the Custodian, the Custodian shall be under a duty to examine the
same in accordance with the requirements of this Custodial Agreement.
Neither the Custodian nor any of its directors, officers,
agents or employees, shall be liable for any action taken or omitted to be taken
by it or them hereunder or in connection herewith in good faith and believed by
it or them to be within the purview of this Custodial Agreement, except for its
or their breach of its or their obligations hereunder, or by its or their own
negligence, lack of good faith or willful misconduct. In no event shall the
Custodian or its directors, officers, agents and employees be held liable for
any special, indirect or consequential damages resulting from any action taken
or omitted to be taken by it or them hereunder or in connection herewith in good
faith and reasonably believed by it or them to be within the purview of this
Custodial Agreement, even if advised of the possibility of such damages.
Section 3.9. INSURANCE. The Custodian shall, at its own
expense, maintain in full force and effect at all times during the existence of
this Agreement the following:
(a) fidelity insurance;
(b) theft of documents insurance; and
(c) errors and omissions insurance.
All such insurance shall be in amounts with standard coverage and subject to
deductibles as is customary for insurance typically maintained by depository
institutions or trust companies which act as custodians, which insurance may be
self-insurance. The minimum coverage under any such insurance shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Mortgage-Backed
Securities Selling and Servicing Guide or by FHLMC in the FHLMC Sellers' &
Servicers' Guide. The Custodian shall, upon written request, provide to the
Depositor or the Trustee a copy of any policy or certificate of insurance
required to be maintained by the Custodian pursuant to this Agreement.
ARTICLE IV
Miscellaneous Provisions
Section 4.1. NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by first class mail, postage prepaid, or by express delivery ser
vice, at the addresses shown on the signature page hereof, or such other address
as may hereafter be furnished to the other parties by like notice. Any such
demand, notice or communication hereunder
11
shall be deemed to have been received on the date delivered to or received at
the premises of the addressee.
Section 4.2. AUTHORIZED REPRESENTATIVES. Each representative
of the Trustee, the Depositor, the Master Servicer, the Custodian who is named
on Exhibit Five, Exhibit Six, Exhibit Seven and Exhibit Eight hereto,
respectively (each, an "Authorized Representative"), is authorized to give and
receive notices, requests and instructions and to deliver certificates and
documents in connection with this Agreement on behalf of the Depositor, the
Trustee, the Master Servicer and the Custodian, as the case may be. From time to
time, the Depositor, the Trustee, the Master Servicer and the Custodian may, by
delivering to the others a revised exhibit, change the information previously
given, but each of the other parties hereto shall be entitled to rely
conclusively on the last exhibit until receipt of a superseding exhibit.
Section 4.2. AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and none of the Depositor, the Master
Servicer nor the Trustee shall enter into any amendment hereof except as
permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt
notice to the Custodian of any amendment or supplement to the Pooling and
Servicing Agreement and furnish the Custodian with written copies thereof.
Section 4.3. GOVERNING LAW. This Agreement shall be deemed a
contract made under the laws of the State of New York and shall be construed and
enforced in accordance with and governed by the laws of the State of New York.
Section 4.4. COUNTERPARTS. For purpose of facilitating the
recordation of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
Section 4.5. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
12
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
Address:
By:
----------------------------
Norwest Center Name:
Sixth & Marquette Title:
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION,
as Custodian
Address:
000 Xxxx Xxxxxx Xxxx
Xxxxx 000 By:
Xxxxxxx, Xxxxx 00000 ----------------------------
Name:
Title:
AMERIQUEST MORTGAGE COMPANY
as Master Servicer
Address:
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000 By:
Xxxxxx, Xxxxxxxxxx 00000 ----------------------------
Attention: General Counsel Name:
Title:
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
Address:
By:
----------------------------
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx Name: Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Title: Assistant Vice President
Attention: Mortgage Finance
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of November, 1999 before me, a notary public in
and for said State, personally appeared ____________, known to me to be an
_________________ of Salomon Brothers Mortgage Securities VII, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
[Notarial Seal]
STATE OF _______________ )
) ss.:
COUNTY OF ______________ )
On the ___ day of November, 1999 before me, a notary public in
and for said State, personally appeared __________________, known to me to be a
____________________ of Ameriquest Mortgage Company, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of November, 1999 before me, a notary public in
and for said State, personally appeared ___________________, known to me to be
an Officer of Norwest Bank Minnesota, N.A., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____th day of November, 1999 before me, a notary public
in and for said State, personally appeared Xxxxx Xxxxx, known to me to be a Vice
President of Chase Bank of Texas, National Association, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
EXHIBIT ONE TO THE CUSTODIAL AGREEMENT
FORM OF CUSTODIAN'S INITIAL CERTIFICATION
November 10, 1999
Salomon Brothers Mortgage Ameriquest Mortgage Company
Securities VII, Inc. 0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Norwest Bank Minnesota, N.A.
Norwest Center
Sixth & Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Custodial Agreement, dated as of November 10, 1999, among
Salomon Brothers Mortgage VII, Securities Inc., Ameriquest
Mortgage Company, Norwest Bank Minnesota, National Association
and Chase Bank of Texas, National Association, Floating Rate
Mortgage Pass-Through Certificates, Series 1999-AQ2
--------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2 of the above-referenced
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
reviewed the Mortgage File and determined that each Mortgage Note required to be
delivered to it pursuant to the Custodial Agreement is in its possession and the
Mortgage Notes have been reviewed by it and appear regular on their face and
relate to the Mortgage Loans.
The Custodian has made no independent examination of any
documents contained in any Mortgage File beyond the review specifically required
in the above-referenced Custodial Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan, or (iii) whether any Mortgage File included any of the documents specified
in clause (e) of Section 2.1 of the Custodial Agreement.
Capitalized words and phrases used herein shall have the
meanings assigned to them in the above-captioned Custodial Agreement.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
---------------------------------
Name:
Title:
EXHIBIT TWO TO THE CUSTODIAL AGREEMENT
--------------------------------------
FORM OF CUSTODIAN INTERIM CERTIFICATION
November __, 1999
Salomon Brothers Mortgage
Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Norwest Bank Minnesota, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Custodial Agreement, dated as of November 1, 1999, among Salomon
Brothers Mortgage Securities VII, Inc., Ameriquest Mortgage Company,
Norwest Bank Minnesota, N.A. and Chase Bank of Texas, National
Association Floating Rate Mortgage Pass-Through Certificates, Series
1999-AQ2
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2 of the above-referenced
Custodial Agreement, the undersigned, as Custodian, hereby certifies, subject to
the exceptions noted on the attached report, that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report as not
being covered by this certification), it has reviewed the Mortgage File and
determined that (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.1(e)) required to be delivered to it
pursuant to the Custodial Agreement are in its possession, (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Mortgage Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii), (vi), (ix), (x), (xiii), (xv), and (xvii) through (xx) of the
definition of "Mortgage Loan Schedule" in the Pooling and Servicing Agreement
accurately reflects information set forth in the Mortgage File.
2
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Custodial Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan, or (iii) whether any Mortgage File included any of the documents specified
in clause (e) of Section 2.1 of the Custodial Agreement.
Capitalized words and phrases used herein shall have the
meanings assigned to them in the above-captioned Custodial Agreement.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
Title:
EXHIBIT THREE TO THE CUSTODIAL AGREEMENT
----------------------------------------
FORM OF CUSTODIAN FINAL CERTIFICATION
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Ameriquest Mortgage Company
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Norwest Bank Minnesota, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Custodial Agreement, dated as of November 1, 1999, among Salomon
Brothers Mortgage Securities VII, Inc., Ameriquest Mortgage Company,
Norwest Bank Minnesota, N.A. and Chase Bank of Texas, National
Association Floating Rate Mortgage Pass-Through Certificates, Series
1999-AQ2
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it has received:
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., under the applicable agreement, without
recourse," with all prior and intervening endorsements showing a
complete chain of endorsement from the Seller to the Person so
endorsing to the Trustee;
2
(ii) the original recorded Mortgage, and the original
recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, or a certified copy thereof in those instances where
the public recording office retains the original or where the original
has been lost; and
(iii) an original recorded Assignment of the Mortgage to
the Trustee together with the original recorded Assignment or
Assignments of the Mortgage showing a complete chain of assignment from
the Seller, or a certified copy of such Assignments in those instances
where the public recording retains the original or where original has
been lost; and
(iv) the original lender's title insurance policy.
The Custodian 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 Custodian
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the
meanings assigned to them in the above-captioned Custodial Agreement.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
-------------------------------------
Name:
Title:
EXHIBIT FOUR TO THE CUSTODIAL AGREEMENT
---------------------------------------
REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
----------------
Name of Mortgagor: _____________________________
Master Servicer
Loan No.: _____________________________
Trustee/Custodian
-----------------
Name: _________________________
Address: _______________________________________
_______________________________________
Trustee/Custodian
Mortgage File No.: _______________________________________
Depositor
Name: SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
Address: ______________________________________
______________________________________
Certificates: Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2.
4
The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement, dated as of November 1, 1999, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, 19__, in the original principal
sum of $__________, made by _____________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County
Recorder's Office of the County of _______________, State of
_______________________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees
as follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of
attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Collection Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
Dated:
[MASTER SERVICER]
By:
-------------------------------
Name:
Title:
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-AQ2
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: _____________________ BORROWER'S NAME:______________________
COUNTY:___________________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
_____________________________ DATED:_________________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT FIVE TO THE CUSTODIAL AGREEMENT
---------------------------------------
AUTHORIZED REPRESENTATIVES OF DEPOSITOR
---------------------------------------
-------------------- ----------------------
-------------------- ----------------------
-------------------- -----------------------
-------------------- -----------------------
EXHIBIT SIX TO THE CUSTODIAL AGREEMENT
--------------------------------------
AUTHORIZED REPRESENTATIVES OF TRUSTEE
-------------------------------------
-------------------- ----------------------
-------------------- ----------------------
-------------------- -----------------------
-------------------- -----------------------
EXHIBIT SEVEN TO THE CUSTODIAL AGREEMENT
----------------------------------------
AUTHORIZED REPRESENTATIVES OF MASTER SERVICER
---------------------------------------------
-------------------- ----------------------
-------------------- ----------------------
-------------------- -----------------------
-------------------- -----------------------
EXHIBIT EIGHT TO THE CUSTODIAL AGREEMENT
----------------------------------------
AUTHORIZED REPRESENTATIVES OF CUSTODIAN
---------------------------------------
-------------------- ----------------------
-------------------- ----------------------
-------------------- -----------------------
-------------------- -----------------------
EXHIBIT NINE TO THE CUSTODIAL AGREEMENT
---------------------------------------
FORM OF LOST NOTE AFFIDAVIT
I, as ___________________________ (title) (hereinafter called
"Deponent") of _______________________ (the "Custodian"), am authorized to make
this Lost Note Affidavit (this "Affidavit") on behalf of the Custodian. In
connection with the administration of the Mortgage Loans held by the Custodian
on behalf of Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor"),
Deponent being duly sworn, deposes and says that:
1. Custodian's address is:
[CUSTODIAN'S Address]
2. Custodian previously delivered to the Depsotior a certification with
respect to that certain Mortgage Note made by ___________________ in an original
principal balance of $___________, secured by a Mortgage on a property located
at______________________________________________, which did not indicate such
Mortgage Note is missing;
3. Such Mortgage Note was assigned or sold to the Depositor by
[__________] pursuant to the terms and provisions of a Pooling and Servicing
Agreement dated and effective as of November 1, 1999;
4. Such Mortgage Note is not outstanding pursuant to a Request for
Release;
5. Aforesaid Mortgage Note (hereinafter called the "Original") has been
lost;
6. Deponent has made or has caused to be made a diligent search for the
Original and has been unable to find or recover same;
7. The Custodian was the Custodian of the Original at the time of loss;
8. Deponent agrees that, if said Original should ever come into the
Custodian's possession, custody or power, the Custodian will immediately and
without consideration surrender
the Original to the Depositor;
9. Attached hereto is a true and correct copy of (i) the Mortgage Note,
endorsed in blank by the Mortgagee, as provided by _________________________ or
its designee and (ii) the Mortgage which secures the Mortgage Note;
10. Deponent hereby agrees that the Custodian (a) shall indemnify and
hold harmless the Trustee, the Master Servicer and the Depositor, their
successors, and assigns, against any loss, liability or damage, including
reasonable attorney's fees, resulting from the unavailability of any Originals,
including but not limited to any loss, liability or damage arising from (i) any
false
statement contained in this Affidavit, (ii) any claim of any party that it has
already purchased a mortgage loan evidenced by the Originals or any interest in
such mortgage loan, (iii) any claim of any borrower with respect to the
existence of terms of a Mortgage Loan evidenced by the Originals, (iv) the
issuance of a new instrument in lieu thereof and (v) any claim whether or not
based upon or arising from honoring or refusing to honor the Original when
presented by anyone (items (i) through (iv) above are hereinafter referred to as
the "Losses"); and
11. This Affidavit is intended to be relied on by the Trustee, the
Master Servicer and the Depositor, their successors, and assigns and the
Custodian represents and warrants that it has the authority to perform its
obligations under this Affidavit.
EXECUTED THIS ____ day of _______, ____, on behalf of the Custodian by:
-----------------------------------
Signature
-----------------------------------
Typed Name
On this _________ day of _______________________, ______, before me
appeared ____________________________________________, to me personally know,
who being duly sworn did say that she/he is the ______________________________
of ----------------------, and that said Lost Note Affidavit was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
-------------------------------------
Notary Public in and for the
State of ____________________________.
My Commission expires: _______________.
APPENDIX A
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee), which is sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings and loan institutions in the State of California or the
State of New York, or in the city in which the Corporate Trust Office of the
Trustee is located, are authorized or obligated by law or executive order to be
closed.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of a Residual
Certificate for any purposes hereof and, solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be deemed
not to be outstanding and the Voting Rights to which it is entitled shall not be
taken into account in determining whether the requisite percentage of Voting
Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
"Closing Date": November 10, 1999.
"Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.10(a), which shall be entitled
"Ameriquest Mortgage Company, as Master Servicer for Norwest Bank Minnesota,
National Association, as Trustee, in trust for the registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 1999-AQ2." The Collection Account must be an Eligible
Account.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
"Liquidation Proceeds": The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
10
through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
"Master Servicer": Ameriquest Mortgage Company ("Ameriquest") or any
successor master servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.
"Master Servicer Termination Test": With respect to any Distribution
Date, the Master Servicer Termination Test will be failed if the Cumulative Loss
Percentage exceeds ____%.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as held
from time to time held as a part of REMIC I, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC I on such date, attached hereto as Schedule 1. The Mortgage
Loan Schedule shall set forth the following information with respect to each
Mortgage Loan:
(i) the Seller's Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the Loan-to-Value Ratio at origination;
(viii) the Mortgage Rate in effect immediately following the Cut-off
Date;
(ix) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(x) the stated maturity date;
(xi) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
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(xii) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xiii) the original principal amount of the Mortgage Loan;
(xiv) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xv) the Gross Margin;
(xvi) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xvii) the Maximum Mortgage Rate;
(xviii) the Minimum Mortgage Rate;
(xix) the Mortgage Rate at origination;
(xx) the Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment;
(xxi) a code indicating the documentation program (I.E., Full
Documentation, Fast Trac or Stated Income);
(xxii) the first Adjustment Date immediately following the Cut-off
Date;
(xxiii) the risk grade;
(xxiv) the Value of the Mortgaged Property; and
(xxv) the sale price of the Mortgaged Property, if applicable.
The Mortgage Loan Schedule shall set forth the following information
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Depositor in accordance with the
provisions of this Agreement. With respect to any Qualified Substitute Mortgage
Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
12
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Rating Agency or Rating Agencies": DCR, Xxxxx'x and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Master Servicer.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A-1 Certificates, the Class A-2 Certificates, the Mezzanine
Certificates and the Class CE Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective Certificates, 1% of all
Voting Rights will be allocated to the holders of the Class P Certificates and
1/3 of 1% of all Voting Rights will be allocated among the holders of each Class
of Residual Certificates. The Voting Rights allocated to each Class of
Certificate shall be allocated among Holders of each such Class in accordance
with their respective Percentage Interests as of the most recent Record Date.
EXHIBIT I
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FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated January __,
2000 (the "Instrument"), among Salomon Brothers Mortgage Securities VII, Inc. as
seller (the "Depositor") and Norwest Bank Minnesota, National Association as
trustee (the "Trustee") of the Salomon Brothers Mortgage Securities VII, Inc.,
Floating Rate Mortgage Pass-Through Certificates, Series 1999-AQ2, and pursuant
to the Pooling and Servicing Agreement, dated as of November 1, 1999 (the
"Pooling and Servicing Agreement"), among the Depositor as depositor, Ameriquest
Mortgage Company as master servicer and the Trustee as trustee, the Depositor
and the Trustee agree to the sale by the Depositor and the purchase by the
Trustee on behalf of the Trust Fund, of the Mortgage Loans listed on the
attached Schedule of Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee on behalf of the Trust Fund, without recourse, all of its
right, title and interest in and to the Subsequent Mortgage Loans, and including
all amounts due on the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 of the Pooling and Servicing Agreement;
provided, however that the Depositor reserves and retains all right, title and
interest in and to amounts due on the Subsequent Mortgage Loans on or prior to
the related Subsequent Cut-off Date. The Depositor, contemporaneously with the
delivery of this Agreement, has delivered or caused to be delivered to the
Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, among the Depositor as
purchaser, the Master Servicer as originator and Ameriquest Securities L.L.C. as
seller, to the extent of the Subsequent Mortgage Loans, a copy of which
agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.
(a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement
are hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Master
Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. GOVERNING LAW.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. SUCCESSORS AND ASSIGNS.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:_____________________________________
Name: Xxxxx Xxxxx
Title: Assistant Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as trustee
By:_____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
ATTACHMENT A
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ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: January 1, 2000
2. Subsequent Transfer Date: September __, 2000
3. Aggregate Principal Balance of the Subsequent Mortgage Loans
as of the Subsequent Cut-off Date: $______________
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date (except with respect to
1.00% of the Subsequent Mortgage Loans, by aggregate principal balance as of the
related Subsequent Cut-off Date, which may be 30 or more days delinquent but
less than 60 days delinquent as of the related Subsequent Cut-off Date); (ii)
the stated term to maturity of the Subsequent Mortgage Loan will not be less
than 358 months and will not exceed 360 months; (iii) the Subsequent Mortgage
Loan may not provide for negative amortization; (iv) the Subsequent Mortgage
Loan will not have a Loan-to-Value Ratio greater than 90.00% the Subsequent
Mortgage Loans will have as of the Subsequent Cut-off Date, a weighted average
term since origination not in excess of __ months; (vi) no Subsequent Mortgage
Loan shall have a Mortgage Rate less than 7.50% or greater than 16.00%; (vii)
the Subsequent Mortgage Loan will have been serviced by the Master Servicer
since origination or purchased by the Depositor; (viii) the Subsequent Mortgage
Loan must have a first Monthly Payment due on or before [month/year]; and (ix)
the Subsequent Mortgage Loan will be underwritten in accordance with the
criteria set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.
C. Following the purchase of the Subsequent Mortgage Loans by the
Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will,
as of the Subsequent Cut-off Date: (i) have a weighted average original term to
stated maturity of not more than 360 months; (ii) have a weighted average
Mortgage Rate of not less than 9.556% and not more than _______%; (iii) have a
weighted average Loan-to-Value Ratio of not more than 74.265%; (iv) have no
Mortgage Loan with a principal balance in excess of $602,000 and (v) have a
weighted average Gross Margin of not less than 6.467%, in each case, as
applicable, by aggregate principal balance of the Mortgage Loans as of the
Subsequent Cut-off Date. Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by any of the Rating Agencies if the inclusion of such
Subsequent Mortgage Loan would adversely affect the ratings on any class of
Offered Certificates.
EXHIBIT J
FORM OF ADDITION NOTICE
January __, 2000
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November
1, 1999, among Salomon Brothers Mortgage Securities
VII, Inc., Ameriquest Mortgage Company and Norwest Bank
Minnesota, National Association, relating to Salomon
Brothers Mortgage Securities VII, Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 1999-NC4
-------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.11 of the referenced Pooling and Servicing
Agreement, Salomon Brothers Mortgage Securities VII, Inc. has designated
Subsequent Mortgage Loans to be sold to the Trust Fund on January __, 2000 with
an aggregate principal balance of $_______________. Capitalized terms not
otherwise defined herein have the meaning set forth in the Pooling and Servicing
Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:__________________________
Name:
Title:
Acknowledged and Agreed:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:__________________________
Name:
Title:
Schedule 1
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MORTGAGE LOAN SCHEDULE
FILED BY PAPER
Schedule 2
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PREPAYMENT CHARGE SCHEDULE
TO BE PROVIDED UPON REQUEST
