SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
NATIONAL BANK OF COMMERCE
Master Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
_________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2003
_________________________________________
Mortgage Pass-Through Certificates
Series 2003-NBC1
i
TABLE OF CONTENTS
-----------------
DEFINITIONS..............................................................................................4
1.01. Defined Terms...................................................................................4
1.02. Allocation of Certain Interest Shortfalls......................................................58
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES............................................................................................59
2.01. Conveyance of Mortgage Loans...................................................................59
2.02. Acceptance of REMIC I by the Trustee...........................................................62
2.03. Repurchase or Substitution of Mortgage Loans by the Seller or the
Depositor......................................................................................63
2.04. Reserved.......................................................................................65
2.05. Representations, Warranties and Covenants of the Master Servicer...............................65
2.06. Issuance of the Certificates...................................................................67
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS......................................................69
3.01. Master Servicer to Act as Master Servicer......................................................69
3.02. Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers.........................70
3.03. Successor Sub-Servicers........................................................................71
3.04. Liability of the Master Servicer...............................................................72
3.05. No Contractual Relationship Between Sub-Servicers, Trustee or
Certificateholders.............................................................................72
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee...............................72
3.07. Collection of Certain Mortgage Loan Payments...................................................73
3.08. Sub-Servicing Accounts.........................................................................73
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................74
3.10. Collection Account and Distribution Account....................................................74
3.11. Withdrawals from the Collection Account and Distribution Account...............................77
3.12. Investment of Funds in the Collection Account and the Distribution Account.....................79
3.13. Maintenance of the Primary Mortgage Insurance Policies; Collections
Thereunder.....................................................................................81
3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.......................................................................................81
3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................82
3.16. Realization Upon Defaulted Mortgage Loans......................................................83
3.17. Trustee to Cooperate; Release of Mortgage Files................................................85
3.18. Servicing Compensation.........................................................................86
3.19. Reports to the Trustee; Collection Account Statements..........................................86
3.20. Statement as to Compliance.....................................................................87
3.21. Independent Public Accountants' Servicing Report...............................................87
3.22. Access to Certain Documentation................................................................88
3.23. Title, Management and Disposition of REO Property..............................................88
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3.24. Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls.....................................................................................91
3.25. Obligations of the Master Servicer in Respect of Monthly Payments..............................91
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS..........................................................................93
4.01. Distributions..................................................................................93
4.02. Statements to Certificateholders...............................................................98
4.03. Remittance Reports; P&I Advances..............................................................102
4.04. Allocation of Extraordinary Trust Fund Expenses and Realized Losses...........................103
4.05. Compliance with Withholding Requirements......................................................105
4.06. Reserved......................................................................................105
4.07. Commission Reporting..........................................................................106
4.08. Distributions and Realized Losses on the REMIC I Regular Interests............................107
4.09. Excess Diverted Interest Reserve Account......................................................107
ARTICLE V
THE CERTIFICATES.......................................................................................109
5.01. The Certificates..............................................................................109
5.02. Registration of Transfer and Exchange of Certificates.........................................111
5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................115
5.04. Persons Deemed Owners.........................................................................115
5.05. Certain Available Information.................................................................115
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER..................................................................117
6.01. Liability of the Depositor and the Master Servicer............................................117
6.02. Merger or Consolidation of the Depositor or the Master Servicer...............................117
6.03. Limitation on Liability of the Depositor, the Master Servicer and Others......................117
6.04. Limitation on Resignation of the Master Servicer..............................................118
6.05. Rights of the Depositor in Respect of the Master Servicer.....................................119
ARTICLE VII
DEFAULT ..............................................................................................120
7.01. Master Servicer Events of Default.............................................................120
7.02. Trustee to Act; Appointment of Successor......................................................122
7.03. Notification to Certificateholders............................................................123
7.04. Waiver of Master Servicer Events of Default...................................................124
ARTICLE VIII
CONCERNING THE TRUSTEE.................................................................................125
8.01. Duties of Trustee.............................................................................125
8.02. Certain Matters Affecting the Trustee.........................................................126
8.04. Trustee May Own Certificates. ................................................................127
8.05. Trustee's Fees and Expenses. .................................................................127
8.06. Eligibility Requirements for Trustee..........................................................128
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8.07. Resignation and Removal of the Trustee .......................................................128
8.08. Successor Trustee.............................................................................129
8.09. Merger or Consolidation of Trustee............................................................129
8.10. Appointment of Co-Trustee or Separate Trustee.................................................130
8.11. Appointment of Office or Agency...............................................................131
8.12. Representations and Warranties................................................................131
ARTICLE IX
TERMINATION............................................................................................133
9.01 Termination Upon Repurchase or Liquidation of the REMIC I Regular
Interests.....................................................................................133
9.02 Additional Termination Requirements...........................................................134
ARTICLE X
REMIC PROVISIONS.......................................................................................136
10.01. REMIC Administration..........................................................................136
10.02. Prohibited Transactions and Activities........................................................138
10.03. Master Servicer and Trustee Indemnification...................................................138
ARTICLE XI
MISCELLANEOUS PROVISIONS...............................................................................140
11.01. Amendment.....................................................................................140
11.02. Recordation of Agreement; Counterparts........................................................141
11.03. Limitation on Rights of Certificateholders....................................................141
11.04. Governing Law.................................................................................142
11.05. Notices.......................................................................................142
11.06. Severability of Provisions....................................................................143
11.07. Notice to Rating Agencies.....................................................................143
11.08. Article and Section References................................................................144
11.09. Grant of Security Interest....................................................................144
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Exhibits
--------
Exhibit A-1 Form of Class AV-1 Certificate
Exhibit A-2 Form of Class AV-2 Certificate
Exhibit A-3 Form of Class AV-3 Certificate
Exhibit A-4 Form of Class AV-4 Certificate
Exhibit A-5 Form of Class AF Certificate
Exhibit A-6 Form of Class IO Certificate
Exhibit A-7 Form of Class PO Certificate
Exhibit A-8 Form of Class BV-1 Certificate
Exhibit A-9 Form of Class BV-2 Certificate
Exhibit A-10 Form of Class BV-3 Certificate
Exhibit A-11 Form of Class BV-4 Certificate
Exhibit A-12 Form of Class BV-5 Certificate
Exhibit A-13 Form of Class BV-6 Certificate
Exhibit A-14 Form of Class BF-1 Certificate
Exhibit A-15 Form of Class BF-2 Certificate
Exhibit A-16 Form of Class BF-3 Certificate
Exhibit A-17 Form of Class BF-4 Certificate
Exhibit A-18 Form of Class BF-5 Certificate
Exhibit A-19 Form of Class BF-6 Certificate
Exhibit A-20 Form of Class R-I Certificate
Exhibit A-21 Form of Class R-II Certificate
Exhibit A-22 Form of Class R-III Certificate
Exhibit B [Reserved]
Exhibit C-1 Form of Trustee's/Custodian's Receipt of Mortgage Note
Exhibit C-2 Form of Trustee's/Custodian's Initial Certification
Exhibit C-3 Form of Trustee's/Custodian's Final Certification
Exhibit D 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 Private 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-1 Form of Certification to be Provided by the Master Servicer with Form 10-K
Exhibit H-2 Form of Certification to be Provided to the Master Servicer by the Trustee
Exhibit I Form of Custodial Agreement
Schedule 1 Mortgage Loan Schedule
Schedule 2 Mortgage Loans that have Primary Mortgage Insurance
v
This Pooling and Servicing Agreement, is dated and effective
as of March 1, 2003, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as
Depositor, NATIONAL BANK OF COMMERCE, as Master Servicer, and XXXXX FARGO 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 created hereunder.
REMIC I
-------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Group I/IV Mortgage Loans and
certain other related assets subject to this Agreement as a REMIC (as defined
herein) for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC I". The Class R-I Certificate 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 Regular Initial Uncertificated Principal Latest Possible
Interest REMIC I Remittance Rate Balance Maturity Date(1)
-------- ----------------------- ------- ----------------
LT-1A Variable(2) $ 1,890.65 March 25, 2033
LT-1B Variable(2) $ 16,440.65 March 25, 2033
LT-2A Variable(2) $ 716.69 March 25, 2033
LT-2B Variable(2) $ 6,231.59 March 25, 2033
LT-3A Variable(2) $ 953.87 March 25, 2033
LT-3B Variable(2) $ 8,294.47 March 25, 2033
LT-4A Variable(2) $ 1,364.58 March 25, 2033
LT-4B Variable(2) $ 11,866.19 March 25, 2033
LT-1/4ZZ Variable(2) $ 428,281,119.89 Xxxxx 00, 0000
XX-X-X N/A $ 100.00 March 25, 2033
_______________
(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.
REMIC II
--------
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the Group V Mortgage Loans and certain other related
assets subject to this Agreement as a REMIC (as defined herein) for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC II". The Class R-II Certificate will be the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions (as defined herein).
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 I Regular Interests (as defined herein).
None of the REMIC II Regular Interests will be certificated.
REMIC II Regular Initial Uncertificated Principal Latest Possible
Interest REMIC II Remittance Rate Balance Maturity Date(1)
-------- ------------------------ ------- ----------------
LT-5 6.25% per annum $ 210,110,125.60 Xxxxx 00, 0000
XX-XX Variable(2) (3) Xxxxx 00, 0000
XX-XX 0.00% $ 7,970,879.00 Xxxxx 00, 0000
XX-X-X N/A $ 100.00 March 25, 2033
_______________
(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) Initial Notional Amount. As provided herein, the Class IO Certificates
entitle the Holders thereof solely to distributions of interest accrued on
the related Notional Amount of such Certificates.
2
REMIC III
---------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests and REMIC
II Regular Interests as a REMIC (as defined herein) for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC III".
The Class R-III Certificate will be the sole class of "residual interests" in
REMIC III for purposes of the REMIC Provisions (as defined herein). 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 each Class of Certificates (as defined herein).
Initial Aggregate Certificate Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
Class AV-1 Variable(2) $ 145,500,000.00 March 25, 2033
Class AV-2 Variable(2) $ 55,149,000.00 March 25, 2033
Class AV-3 Variable(2) $ 73,406,000.00 March 25, 2033
Class AV-4 Variable(2) $ 105,016,000.00 March 25, 2033
Class A-F 6.25% per annum $ 197,025,121.00 March 25, 2033
Class PO 0.000%(3) $ 7,970,879.00 March 25, 2033
Class IO Variable(2) (4) March 25, 2033
Class BV-1 Variable(2) $ 18,204,000.00 March 25, 2033
Class BV-2 Variable(2) $ 9,637,000.00 March 25, 2033
Class BV-3 Variable(2) $ 7,282,000.00 March 25, 2033
Class BV-4 Variable(2) $ 5,139,000.00 March 25, 2033
Class BV-5 Variable(2) $ 4,070,000.00 March 25, 2033
Class BV-6 Variable(2) $ 4,925,879.00 March 25, 2033
Class BF-1 6.25% per annum $ 4,361,000.00 March 25, 2033
Class BF-2 6.25% per annum $ 3,053,000.00 March 25, 2033
Class BF-3 6.25% per annum $ 1,854,000.00 March 25, 2033
Class BF-4 6.25% per annum $ 1,309,000.00 March 25, 2033
Class BF-5 6.25% per annum $ 872,000.00 March 25, 2033
Class BF-6 6.25% per annum $ 1,636,005.00 March 25, 2033
Class R-I N/A $ 100.00 March 25, 2033
Class R-II N/A $ 100.00 March 25, 2033
_______________
3
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class PO Certificates are not entitled to distributions of interest.
(4) Initial Notional Amount. As provided herein, the Class IO Certificates
entitle the Holders thereof solely to distributions of interest accrued on
the related Notional Amount of such Certificates.
As of the Cut-off Date, the Original Group I Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $164,406,481, the Original
Group II Mortgage Loans had an aggregate Scheduled Principal Balance equal to
$62,315,902, the Original Group III Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $82,944,736, the Original Group IV Mortgage Loans had
an aggregate Scheduled Principal Balance equal to $118,661,859 and the Original
Group V Mortgage Loans had an aggregate Scheduled Principal Balance equal to
$218,081,105.
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.
"Adjustment Date": With respect to each Group I Mortgage Loan,
Group II Mortgage Loan, Group III Mortgage Loan and Group IV 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 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, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Bankruptcy 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].
"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 institutions in the Commonwealth of
Pennsylvania, the State of Tennessee, the State of New York, the State of
Maryland, the State of Minnesota 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.
5
"Cash-out Refinancing": A Refinanced Mortgage Loan the
proceeds of which were in excess of the principal balance of any existing first
mortgage on the related Mortgaged Property and related closing costs, and were
used to pay any such existing first mortgage, related closing costs and
subordinate mortgages on the related Mortgaged Property.
"Certificate": Any one of the Salomon Mortgage Loan Trust,
Series 2003-NBC1 Mortgage Pass-Through Certificates, issued under this
Agreement.
"Certificate Factor": With respect to any Class of
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to at least six places, the numerator of which is the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates
on such Distribution Date (after giving effect to any distributions of principal
and allocations of Realized Losses and Extraordinary Trust Fund Expenses in
reduction of the Certificate Principal Balance or 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 or 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.
"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 any
Certificate, other than a Class IO Certificates, as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, reduced by
the aggregate of (a) all distributions of principal made thereon on such
immediately prior Distribution Date and (b) without duplication of amounts
described in clause (a) above, reductions in the Certificate Principal Balance
thereof in connection with allocations thereto of Realized Losses on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the initial Distribution Date, the initial Certificate Principal
Balance of such Certificate, as stated on the face thereof); provided, however,
6
that the Certificate Principal Balance of each Group I/IV Subordinate
Certificate or Group V Subordinate Certificate, as applicable, outstanding with
the highest numerical designation at any given time shall not be greater than
the Percentage Interest evidenced by such Certificate multiplied by the excess,
if any, of (A) the then aggregate Stated Principal Balance of the Group I/IV
Mortgage Loans or the Group V Mortgage Loans, as applicable, over (B) the then
aggregate Certificate Principal Balances of all other related Classes of
Certificates then outstanding. The Class IO Certificates shall not have
Certificate Principal Balances and shall not be entitled to any distributions of
principal.
"Certificate Register": The register maintained pursuant to
Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificates": The Class AV-1 Certificates, the Class
AV-2 Certificates, the Class AV-3 Certificates, the Class AV-4 Certificates and
the Class AF Certificates.
"Class AF Certificates": Any one of the Class AF Certificates
executed, authenticated and delivered by the Trustee, 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 AV Certificates": The Class AV-1 Certificates, the
Class AV-2 Certificates, the Class AV-3 Certificates and the Class AV-4
Certificates.
"Class AV-1 Certificates": Any one of the Class AV-1
Certificates executed, authenticated and delivered by the Trustee, 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 AV-2 Certificates": Any one of the Class AV-2
Certificates executed, authenticated and delivered by the Trustee, 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 AV-3 Certificates": Any one of the Class AV-3
Certificates executed, authenticated and delivered by the Trustee, 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 AV-4 Certificates": Any one of the Class AV-4
Certificates executed, authenticated and delivered by the Trustee, 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 AV Principal Adjustment Amount": As to any Distribution
Date on which there is an Undercollateralized Loan Group or Loan Groups and the
Certificate Principal Balance of the Class AV Certificates in the
Overcollateralized Loan Group or Loan Groups will be reduced to zero, the
remaining Group I/IV Senior Principal Distribution Amount for the
Overcollateralized Loan Group or Loan Groups after reducing the Certificate
Principal Balance of the Class AV Certificates in the Overcollateralized Loan
Group(s) to zero.
7
"Class B Percentage": Any one of the Class BF-1 Percentage,
the Class BF-2 Percentage, the Class BF-3 Percentage, the Class BF-4 Percentage,
the Class BF-5 Percentage, the Class BF-6 Percentage, the Class BV-1 Percentage,
the Class BV-2 Percentage, the Class BV-3 Percentage, the Class BV-4 Percentage,
the Class BV-5 Percentage or the Class BV-6 Percentage.
"Class BF-1 Certificate": Any one of the Class BF-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-14 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-1 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-1
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-1 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BF-2 Certificate": Any one of the Class BF-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-15 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-2 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-2
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-2 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BF-3 Certificate": Any one of the Class BF-3
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-16 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-3 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-3
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-3 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
8
"Class BF-4 Certificate": Any one of the Class BF-4
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-17 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-4 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-4
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-4 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BF-5 Certificate": Any one of the Class BF-5
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-18 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-5 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-5
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-5 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BF-6 Certificate": Any one of the Class BF-6
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-19 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BF-6 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BF-6
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BF-6 Certificates on such date pursuant to
Section 4.01(c)(i)(Z), and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Group V Mortgage Loans, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BV-1 Certificate": Any one of the Class BV-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-8 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
9
"Class BV-1 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-1
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-1 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group I,
Loan Group II, Loan Group III and Loan Group IV, in each case before reduction
for any Realized Losses on such Distribution Date.
"Class BV-2 Certificate": Any one of the Class BV-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-9 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BV-2 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-2
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-2 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group I,
Loan Group II, Loan Group III and Loan Group IV, in each case before reduction
for any Realized Losses on such Distribution Date.
"Class BV-3 Certificate": Any one of the Class BV-3
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-10 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BV-3 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-3
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-3 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group I,
Loan Group II, Loan Group III and Loan Group IV, in each case before reduction
for any Realized Losses on such Distribution Date.
"Class BV-4 Certificate": Any one of the Class BV-4
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-11 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BV-4 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-4
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-4 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each
10
of the REO Properties in Loan Group I, Loan Group II, Loan Group III and Loan
Group IV, in each case before reduction for any Realized Losses on such
Distribution Date.
"Class BV-5 Certificate": Any one of the Class BV-5
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-12 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BV-5 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-5
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-5 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group I,
Loan Group II, Loan Group III and Loan Group IV, in each case before reduction
for any Realized Losses on such Distribution Date.
"Class BV-6 Certificate": Any one of the Class BV-6
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-13 and evidencing a Regular Interest in
REMIC III for purposes of the REMIC Provisions.
"Class BV-6 Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
excess, if any, of the aggregate Certificate Principal Balance of the Class BV-6
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class BV-6 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group I/IV Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group I,
Loan Group II, Loan Group III and Loan Group IV, in each case before reduction
for any Realized Losses on such Distribution Date.
"Class IO Certificate": Any one of the Class IO Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions. The Class IO Certificates shall not have a
Certificate Principal Balance and shall not be entitled to any distributions of
principal.
"Class IO Mortgage Loan": Each Group V Mortgage Loan with a
Net Mortgage Rate equal to or greater than 6.25% per annum.
"Class PO Certificate": Any one of the Class PO Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-7 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions. The Class PO Certificates shall have a
Pass-Through Rate of 0.000% per annum and shall not be entitled to any
distributions of interest.
"Class PO Mortgage Loan": Each Group V Mortgage Loan with a
Net Mortgage Rate below 6.25% per annum.
11
"Class PO Percentage": With respect to each Class PO Mortgage
Loan, the quotient of (i) 6.25% per annum minus the related Net Mortgage Rate
divided by (ii) 6.25% per annum. With respect to each Class IO Mortgage Loan,
0.000% per annum.
"Class PO Principal Distribution Amount": For any Distribution
Date, an amount equal to the aggregate of:
(a) the sum of the following:
(i) the related Class PO Percentage of the principal
portion of each Monthly Payment due during the related Due
Period in respect of each Class PO Mortgage Loan whether or
not received;
(ii) the related Class PO Percentage of the principal
portion of all Insurance Proceeds and Liquidation Proceeds
(other than amounts described in clause (c) below) received in
respect of each Class PO Mortgage Loan during the related
Prepayment Period (other than any such Class PO Mortgage Loan
that was purchased, sold or replaced pursuant to or as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01
during the related Prepayment Period), net of any portion
thereof that represents a recovery of principal for which an
advance was made by the Master Servicer pursuant to Section
4.03 in respect of a preceding Distribution Date;
(iii) the related Class PO Percentage of the Stated
Principal Balance (calculated immediately prior to such
Distribution Date) of each Class PO Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the
related Prepayment Period;
(iv) the related Class PO Percentage of all REO
Principal Amortization collected in respect of any REO
Property during the related Prepayment Period; and
(v) in connection with the substitution of one or
more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans which were Class PO Mortgage Loans
pursuant to Section 2.03 during the related Prepayment Period,
the excess, if any, of (A) the related Class PO Percentage of
the aggregate of the Stated Principal Balances (calculated as
of the respective dates of substitution) of such Deleted
Mortgage Loans, net of the aggregate of the related Class PO
Percentage of the principal portions of the Monthly Payments
due during the related Prepayment Period (to the extent
received from the related Mortgagor or advanced by the Master
Servicer and distributed pursuant to Section 4.01 on the
Distribution Date in the related Prepayment Period) in respect
of each such Deleted Mortgage Loan that was replaced prior to
the Distribution Date in the related Prepayment Period, over
(B) the related Class PO Percentage of the Stated Principal
Balances (calculated as of the respective dates of
substitution) of such Qualified Substitute Mortgage Loans;
(b) the related Class PO Percentage of all Principal
Prepayments received in respect of each Class PO Mortgage Loan during
the related Prepayment Period;
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(c) with respect to any Class PO Mortgage Loan which was the
subject of a Final Recovery Determination in the related Prepayment
Period, the related Class PO Percentage of the Stated Principal Balance
of such Mortgage Loan at the time of such Final Recovery Determination
(net of the principal portion of any Realized Loss allocated to the
Class PO Certificates) to the extent of the principal portion of all
Liquidation Proceeds with respect to such Class PO Mortgage Loan; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Class PO Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Class PO Certificates on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
which were allocated to the Subordinate Certificates pursuant to
Section 4.04.
"Class R Certificate": Any one of the Class R-I Certificates,
Class R-II Certificates or Class R-III Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto as Exhibit
A-20 through A-22, respectively.
"Class R-I Certificate": The Residual Interest in REMIC I for
purposes of the REMIC Provisions.
"Class R-II Certificate": The Residual Interest in REMIC II
for purposes of the REMIC Provisions.
"Class R-III Certificate": The Residual Interest in REMIC III
for purposes of the REMIC Provisions.
"Closing Date": March 25, 2003.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled, "Xxxxx Fargo Bank Minnesota, National Association, as Trustee, in
trust for the registered holders of Salomon Mortgage Loan Trust, Mortgage
Pass-Through Certificates, Series 2003-NBC1." 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 for Certificate transfer purposes
at Sixth and Marquette Avenue, Minneapolis, Minnesota 55479-0113, Attention:
Corporate Trust Services - SBMS VII, Series 2003-NBC1, and for all other
purposes at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention:
Corporate Trust Services - SBMS VII,
13
Series 2003-NBC1, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer.
"Cross-Collateralization Date": With respect to the Class AV
Certificates and any Distribution Date on which there exists an
Undercollateralizated Loan Group or Loan Groups and an Overcollateralized Loan
Group or Loan Groups for the period preceding such distribution date.
"Custodial Agreement": The Custodial Agreement, dated as of
March 1, 2003 among the Master Servicer, the Trustee and Wachovia Bank, N.A. a
form of which is attached hereto as Exhibit I.
"Custodian": Wachovia Bank, N.A, or its successor in interest,
or any successor custodian appointed under the Custodial Agreement.
"Cut-off Date": With respect to each original Mortgage Loan,
March 1, 2003. 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.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.
"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,
14
(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 A-1 by S&P, F-1 by Fitch
and P-1 by Xxxxx'x (or a comparable rating if S&P, Fitch and Xxxxx'x are not the
Rating Agencies).
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by 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 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" within the meaning of Section 775 of the Code 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 REMIC I 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 "Xxxxx Fargo Bank Minnesota, National Association as Trustee, in trust
for the registered holders of Salomon Mortgage Loan Trust, Mortgage Pass-Through
Certificates, Series 2003-NBC1." The Distribution Account must be an Eligible
Account.
15
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in April 2003.
"Diverted Interest Amount": With respect to the Class AV
Certificates and any Distribution Date, one month's interest accrued during the
related Interest Accrual Period on the Overcollateralized Amount at the
Pass-Through Rate for Class AV Certificates related to the Undercollateralized
Loan Group or Loan Groups and any other unpaid interest shortfalls on the Class
AV Certificates related to the Undercollateralized Loan Group(s), to the extent
available.
"DOL": The United States Department of Labor or any successor
in interest.
"DOL Regulations": The regulations promulgated by the DOL at
29 C.F.R.ss.2510.3- 101.
"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 calendar month preceding the calendar
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, (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.
"ERISA Qualifying Underwriting": With respect to the Class IO
Certificates, the Class PO Certificates, the Class BV-1 Certificates, the Class
BV-2 Certificates, the Class BV-3 Certificates, the Class BF-1 Certificates, the
Class BF-2 Certificates and the Class BF-3 Certificates, a best efforts or firm
commitment underwriting or private placement that meets the requirements of
Prohibited Transaction Exemption 2000-58, 65 Fed. Reg. 67765 (2000), as amended
(or any successor thereto), or any substantially similar administrative
exemption granted by the DOL (an "Underwriter's Exemption").
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the Group I/IV Bankruptcy Amount or the Group V
Bankruptcy Amount, as applicable.
"Excess Diverted Interest Reserve Account": The account
established and maintained pursuant to Section 4.09.
16
"Excess Diverted Interest Reserve Amount": With respect to the
Class AV Certificates and any Distribution Date, an amount equal to the excess,
if any, of (i) one month's interest accrued during the related Interest Accrual
Period on the Overcollateralized Amount at the Pass-Through Rate for the Class
AV Certificates relating to the Overcollateralized Loan Group(s) over (ii) the
Diverted Interest Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the Group I/IV Fraud Loss Amount or the Group V Fraud Loss Amount, as
applicable.
"Excess Loss": Any Excess Bankruptcy Loss, Excess Special
Hazard Loss, Excess Fraud Loss or Extraordinary Loss.
"Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the Group I/IV Special Hazard Amount or the Group
V Special Hazard Amount, as applicable.
"Expense Adjusted Mortgage Rate": With respect to any Group I
Mortgage Loan, Group II Mortgage Loan, Group III Mortgage Loan or Group IV
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Mortgage Rate thereon as of
the first day of the month preceding the month in which the Distribution Date
occurs minus the sum of (i) the Trustee Fee Rate and (ii) the applicable
Servicing Fee Rate.
"Extraordinary Loss": Any Realized Loss or portion thereof
caused by or resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(ii) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an
actual, impending or expected attack by any government or sovereign
power, DE JURE or DE FACTO, or by any authority maintaining or using
military, naval or air forces, or by military, naval or air forces, or
by an agent of any such government, power, authority or forces;
(iii) any weapon of war employing atomic fission or
radioactive forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority, or risks of contraband or illegal
transactions or trade.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable
to the Master Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the Distribution
17
Account in respect of taxes pursuant to Section 10.01(g)(iv), any amounts
reimbursable to the Trustee from the Trust Fund pursuant to Section 2.01,
Section 7.01, Section 7.02, Section 8.05 and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Trustee, shall not, obtain reimbursement or indemnification from any other
Person.
"Xxxxxx Xxx": Xxxxxx Xxx, formerly 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 Seller, the Depositor 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 Liquidation Proceeds have been recovered.
The Master Servicer shall maintain records of each Final Recovery Determination
made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Fraud Loss": Any Realized Loss or portion thereof sustained
by reason of a default arising from intentional fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including by
reason of the denial of coverage under any related Primary Mortgage Insurance
Policy.
"Xxxxxxx Mac": Xxxxxxx Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Group I Mortgage Loans,
Group II Mortgage Loans, Group III Mortgage Loans or Group IV Mortgage Loans,
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.
"Group I/IV Available Distribution Amount": The Group I
Available Distribution Amount, the Group II Available Distribution Amount, the
Group III Available Distribution Amount and/or the Group IV Available
Distribution Amount, as the context requires.
"Group I/IV Bankruptcy Amount": As of any date of
determination, an amount equal to the excess, if any, of (A) $104,195 over (B)
the aggregate amount of Bankruptcy Losses allocated solely to the Group I/IV
Subordinate Certificates in accordance with Section 4.04.
"Group I/IV Certificates": The Class AV-1 Certificates, Class
AV-2 Certificates, Class AV-3 Certificates, Class AV-4, Class BV-1 Certificates,
Class BV-2 Certificates, Class BV-3 Certificates, Class BV-4 Certificates, Class
BV-5 Certificates and Class BV-6 Certificates.
18
"Group I/IV Fraud Loss Amount": As of any date of
determination after the Cut-off Date, prior to the third anniversary of the
Cut-off Date, an amount equal to 1.00% of the aggregate principal balance of the
Group I/IV Mortgage Loans as of the Cut-off Date minus the aggregate amount of
Fraud Losses on the Group I/IV Mortgage Loans allocated solely to the Group I/IV
Subordinate Certificates in accordance with Section 4.04 since the Cut-off Date
up to such date of determination. In addition, after the Certificate Principal
Balances of the Group I/IV Subordinate Certificates are reduced to zero, the
Group I/IV Fraud Loss Amount will be zero.
"Group I/IV Mortgage Loans": The Group I Mortgage Loans, the
Group II Mortgage Loans, the Group III Mortgage Loans and the Group IV Mortgage
Loans.
"Group I/IV Senior Interest Distribution Amount": With respect
to any Distribution Date, an amount equal to the aggregate of the Interest
Distribution Amounts for such Distribution Date for each Class of Class AV
Certificates.
"Group I/IV Senior Percentage": With respect to the Group I/IV
Senior Certificates, the weighted average of the Group I Senior Percentage, the
Group II Senior Percentage, the Group III Senior Percentage and the Group IV
Senior Percentage weighted based on the aggregate Scheduled Principal Balance of
the related Mortgage Loans immediately prior to the Distribution Date.
"Group I/IV Senior Prepayment Percentage": The Group I Senior
Prepayment Percentage, the Group II Senior Prepayment Percentage, the Group III
Senior Prepayment Percentage or the Group IV Senior Prepayment Percentage, as
the context requires.
"Group I/IV Senior Principal Distribution Amount": For any
Distribution Date and any Class of Class A Certificates, an amount equal to the
sum of:
(a) the product of (x) the then-applicable Group I Senior
Percentage, Group II Senior Percentage, Group III Senior Percentage or
Group IV Senior Percentage, as applicable and (y) the sum of the
following:
(i) the aggregate of the principal portions of all
Monthly Payments due during the related Due Period in respect
of the related Mortgage Loans whether or not received;
(ii) the principal portion of all Insurance Proceeds
and Liquidation Proceeds (other than amounts described in
clause (c) below) received in respect of the related Mortgage
Loans during the related Prepayment Period (other than any
such related Mortgage Loan that was purchased, sold or
replaced pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 during the related Prepayment
Period), net of any portion thereof that represents a recovery
of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date;
19
(iii) the Stated Principal Balance (calculated
immediately prior to such Distribution Date) of each related
Mortgage Loan that was purchased, sold or replaced pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01 during the related Prepayment Period;
(iv) all REO Principal Amortization collected in
respect of any REO Property in respect of a related Mortgage
Loan during the related Prepayment Period; and
(v) in connection with the substitution of one or
more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans in the related Loan Group pursuant to
Section 2.03 during the related Prepayment Period, the excess,
if any, of (A) the aggregate of the Stated Principal Balances
(calculated as of the respective dates of substitution) of
such Deleted Mortgage Loans, net of the aggregate of the
principal portions of the Monthly Payments due during the
related Prepayment Period (to the extent received from the
related Mortgagor or advanced by the Master Servicer and
distributed pursuant to Section 4.01 on the Distribution Date
in the related Prepayment Period) in respect of each such
Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B)
the aggregate of the Stated Principal Balances (calculated as
of the respective dates of substitution) of such Qualified
Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Group I Senior
Prepayment Percentage, Group II Senior Prepayment Percentage, Group III
Senior Prepayment Percentage or Group IV Senior Prepayment Percentage,
as applicable, and (y) all Principal Prepayments received in respect of
the related Mortgage Loans during the related Prepayment Period;
(c) with respect to any related Mortgage Loan which was the
subject of a Final Recovery Determination in the related Prepayment
Period, the lesser of (a) the then- applicable Group I/IV Senior
Prepayment Percentage multiplied by the net Liquidation Proceeds and
Insurance Proceeds allocable to principal in respect of such related
Mortgage Loans and (b) the then-applicable Group I Senior Percentage,
Group II Senior Percentage, Group III Senior Percentage or Group IV
Senior Percentage, as applicable, multiplied by the Scheduled Principal
Balance of the related Mortgage Loan at the time of such Final Recovery
Determination; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the related Group I/IV Senior Principal Distribution Amount for the
immediately preceding Distribution Date, over the aggregate
distributions of principal made in respect of the related Class of
Class AV Certificates on such immediately preceding Distribution Date
pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses which were allocated to the Subordinate
Certificates pursuant to Section 4.04.
Notwithstanding the foregoing, on any Distribution Date on
which the Certificate Principal Balance of the Class A Certificates in the
Overcollateralized Loan Group or Loan Groups
20
has been reduced to zero, the Group I/IV Senior Principal Distribution Amount
for the Class AV Certificates in the Undercollateralized Loan Group or Loan
Groups will be increased by the Class AV Principal Adjustment Amount.
"Group I/IV Special Hazard Amount": Initially, an amount equal
to $2,141,645. As of each anniversary of the Cut-off Date, the Special Hazard
Amount shall equal the lesser of (i) the related Group I/IV Special Hazard
Amount on the immediately preceding anniversary of the Cut-off Date less the sum
of all amounts allocated to the Group I/IV Subordinate Certificates in respect
of Special Hazard Losses on the Group I/IV Mortgage Loans during such year and
(ii) the Adjustment Amount for such anniversary. The "Adjustment Amount" with
respect to each anniversary of the Cut-off Date will be equal to the greatest of
(i) 1.00% multiplied by the aggregate outstanding principal balance of the Group
I/IV Mortgage Loans on the Distribution Date immediately preceding such
anniversary, (ii) the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of the Group I/IV Mortgage Loans
secured by Mortgaged Properties located in the California postal zip code area
in which the highest percentage of related Group I/IV Mortgage Loans based on
outstanding principal balance are located and (iii) two times the outstanding
principal balance of the Group I/IV Mortgage Loan having the largest outstanding
principal balance, in each case as of such anniversary of the Cut-off Date.
After the Certificate Principal Balances of the Group I/IV Subordinate
Certificates are reduced to zero, the Group I/IV Special Hazard Amount will be
zero.
"Group I/IV Subordinate Certificate": Any Class BV-1
Certificate, Class BV-2 Certificate, Class BV-3 Certificate, Class BV-4
Certificate, Class BV-5 Certificate or Class BV-6 Certificate.
"Group I/IV Subordinate Percentage": With respect to the Group
I/IV Subordinate Certificates, the weighted average of the Group I Subordinate
Percentage, the Group II Subordinate Percentage, the Group III Subordinate
Percentage and the Group IV Subordinate Percentage, weighted based on the
aggregate principal balance of the Scheduled Principal Balances of the related
Mortgage Loans immediately prior to the Distribution Date. On any Distribution
Date after the reduction of the Certificate Principal Balance of all but one
Class of Class AV Certificates to zero, the Subordinate Percentage on such a
Distribution Date will be 100% minus the Group I/IV Senior Percentage for the
remaining Class of Class AV Certificates for such Distribution Date.
"Group I/IV Subordinate Principal Distribution Amount": For
any Distribution Date, an amount equal to the sum of:
(a) the product of (x) the then-applicable Group I Subordinate
Percentage, the Group II Subordinate Percentage, the Group III
Subordinate Percentage or the Group IV Subordinate Percentage, as
applicable, and (y) the sum of the following:
(i) the aggregate of the principal portions of all
Monthly Payments due during the related Due Period in respect
of the related Mortgage Loans whether or not received;
21
(ii) the principal portion of all Insurance Proceeds
and Liquidation Proceeds (other than amounts described in
clause (c) below) received in respect of the related Mortgage
Loans during the related Prepayment Period (other than any
such Mortgage Loan that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01 during the related Prepayment Period),
net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer
pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the Stated Principal Balance (calculated
immediately prior to such Distribution Date) of each related
Mortgage Loan that was purchased, sold or replaced pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01 during the related Prepayment Period;
(iv) all REO Principal Amortization collected in
respect of any related REO Property during the related
Prepayment Period; and
(v) in connection with the substitution of one or
more related Qualified Substitute Mortgage Loans for one or
more related Deleted Mortgage Loans in the related Loan Group
pursuant to Section 2.03 during the related Prepayment Period,
the excess, if any, of (A) the aggregate of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Deleted Mortgage Loans, net of the
aggregate of the principal portions of the Monthly Payments
due during the related Prepayment Period (to the extent
received from the related Mortgagor or advanced by the Master
Servicer and distributed pursuant to Section 4.01 on the
Distribution Date in the related Prepayment Period) in respect
of each such Deleted Mortgage Loan that was replaced prior to
the Distribution Date in the related Prepayment Period, over
(B) the aggregate of the Stated Principal Balances (calculated
as of the respective dates of substitution) of such Qualified
Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Group I Subordinate
Prepayment Percentage, Group II Subordinate Prepayment Percentage,
Group III Subordinate Prepayment Percentage or Group IV Subordinate
Prepayment Percentage, as applicable, and (y) all Principal Prepayments
received in respect of the related Mortgage Loans during the related
Prepayment Period;
(c) with respect to any related Mortgage Loans which were the
subject of a Final Recovery Determination in the related Prepayment
Period, the amount, if any, by which the net Liquidation Proceeds and
Insurance Proceeds allocable to principal in respect of such Mortgage
Loans exceed the amount distributable to the Class AV Certificates
pursuant to clause (c) of the definition of "Group I/IV Senior
Principal Distribution Amount"; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Group I/IV Subordinate Principal Distribution Amount for the
immediately preceding Distribution Date, over the aggregate
distributions of principal made in respect of the Group I/IV
Subordinate Certificates on such
22
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
that were allocated to the Group I/IV Subordinate Certificates pursuant
to Section 4.04.
"Group I/IV Trigger Amount": With respect to any Class of
Class AV Certificates and any Distribution Date, the Group I/IV Trigger Amount
occurring after the first ten years will be as follows: for any Distribution
Date during the eleventh year after the Closing Date, 30% of the initial
aggregate Certificate Principal Balances of the Group I/IV Subordinate
Certificates; for any Distribution Date during the twelfth year after the
Closing Date, 35% of the initial aggregate Certificate Principal Balances of the
Group I/IV Subordinate Certificates; for any Distribution Date during the
thirteenth year after the Closing Date, 40% of the initial aggregate Certificate
Principal Balances of the Group I/IV Subordinate Certificates; for any
Distribution Date during the fourteenth year after the Closing Date, 45% of the
initial aggregate Certificate Principal Balances of the Group I/IV Subordinate
Certificates; and for any Distribution Date during the fifteenth year (or any
year thereafter) after the Closing Date, 50% of the initial aggregate
Certificate Principal Balances of the Group I/IV Subordinate Certificates.
"Group I 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 with
respect to the Group I Mortgage Loans as of the close of business on the related
Determination Date, (b) the aggregate of any amounts received in respect of an
REO Property relating to a Group I Mortgage Loan 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 on
the Group I Mortgage Loans 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 with respect to the Group I Mortgage Loans pursuant to Section
4.03, (e) [reserved] and (f) any Group I Excess Diverted Interest Reserve
Deposit, reduced (to not less than zero) by (2) the portion of the amount
described in clause (1)(a) above that represents (i) Monthly Payments on the
Group I 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 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 Group I
Mortgage Loans during a period subsequent to the related Prepayment Period),
(iii) Liquidation Proceeds and Insurance Proceeds received in respect of the
Group I Mortgage Loans after the related Prepayment Period, (iv) amounts
reimbursable or payable with respect to the Group I Mortgage Loans to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.11(a)(ii)-(ix) or Section 3.12 or otherwise payable in
respect of Extraordinary Trust Fund Expenses, (v) [reserved], (vi) the Trustee
Fee attributable to the Group I Mortgage Loans payable from the Distribution
Account pursuant to Section 8.05 and (vii) amounts deposited in the Collection
Account or the Distribution Account in error with respect to the Group I
Mortgage Loans. Notwithstanding the foregoing, the Group I Available
Distribution Amount for any Distribution Date shall be increased (in the case of
an Undercollateralized Loan Group with respect to Loan Group I) or decreased (in
the case of an Overcollateralized Loan Group with respect to Loan Group I) by
any applicable Diverted Interest Amount or Class AV Principal Adjustment Amount,
in each case for such Distribution Date.
23
"Group I Excess Diverted Interest Reserve Deposit": An amount
withdrawn from the Excess Diverted Interest Reserve Account equal to the lesser
of (i) the amount on deposit in the Excess Diverted Interest Reserve Account and
(ii) the sum of (a) any interest shortfalls on the Class AV-1 Certificates and
(b) the aggregate amount of Realized Losses on the Group I Mortgage Loans on
such Distribution Date.
"Group I Mortgage Loan": A first lien adjustable-rate Mortgage
Loan whose next Adjustment Date will occur within 18 months following the
Closing Date. The Group I Mortgage Loans are identified as such on the Mortgage
Loan Schedule.
"Group I Senior Percentage": With respect to any Distribution
Date and the Class AV-1 Certificates, the lesser of (a) 100% and (b) a fraction,
expressed as a percentage, the numerator of which is the excess, if any, of the
aggregate Certificate Principal Balance of the Class AV-1 Certificates for such
Distribution Date over the aggregate amount, if any, payable to the Holders of
the Class AV-1 Certificates on such date pursuant to clause (d) of the
definition of "Group I/IV Senior Principal Distribution Amount," and the
denominator of which is the sum of (i) the Scheduled Principal Balance of each
of the Group I Mortgage Loans, plus (ii) the Scheduled Principal Balance of each
of the REO Properties in Loan Group I, in each case before reduction for any
Realized Losses on such Distribution Date.
Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the Group I Mortgage Loans exceed the Certificate Principal
Balance of the Class AV-1 Certificates, the Group I Senior Percentage will equal
the lesser of (i) 100% and (ii) the sum of the Certificate Principal Balance of
the Class AV-1 Certificates immediately prior to such Distribution Date plus the
Overcollateralized Amount divided by the Scheduled Principal Balances of the
Group I Mortgage Loans immediately prior to such Distribution Date. On any
Distribution Date after the reduction of the Certificate Principal Balance of
the Class AV-2 Certificates, the Class AV-3 Certificates and the Class AV-4
Certificates to zero, the Group I Senior Percentage will be a percentage equal
to the Certificate Principal Balance of the Class AV-1 Certificates immediately
prior to such Distribution Date divided by the Scheduled Principal Balances of
the Mortgage Loans immediately prior to such Distribution Date.
"Group I Senior Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
April 2003 through March 2013 100%
April 2013 through March 2014 Group I Senior Percentage, plus 70% of the Group I
Subordinate Percentage
April 2014 through March 2015 Group I Senior Percentage, plus 60% of the Group I
Subordinate Percentage
April 2015 through March 2016 Group I Senior Percentage, plus 40% of the Group I
Subordinate Percentage
24
April 2016 through March 2017 Group I Senior Percentage, plus 20% of the Group I
Subordinate Percentage
April 2017 and thereafter Group I Senior Percentage;
provided, however, no reduction to the Group I Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Group I/IV Mortgage Loans delinquent 60
days or more (including REO Properties and Group I/IV Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group I/IV Subordinate
Certificates and (ii) Realized Losses on the Group I/IV Mortgage Loans to date
are less than the then applicable Group I/IV Trigger Amount.
Notwithstanding the above, if on any Distribution Date (a) the
Group I/IV Subordinate Percentage, prior to giving effect to any distributions
on such Distribution Date, equals or exceeds two times the initial Group I/IV
Subordinate Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding paragraph are met, then the Group I Senior Prepayment
Percentage for such Distribution Date will equal 100%, if such Distribution Date
is prior to April 2006, and will equal the Group I Senior Percentage for such
Distribution Date, if such Distribution Date occurs on or after April 2006.
On any Distribution Date on which the Group I/IV Senior
Percentage exceeds the initial Group I/IV Senior Percentage, the Group I Senior
Prepayment Percentage shall be 100%.
"Group I Subordinate Percentage": With respect to the Group
I/IV Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group I Senior Percentage.
"Group I Subordinate Prepayment Percentage": With respect to
the Group I/IV Subordinate Certificates and any Distribution Date, a percentage
equal to 100% minus the Group I Senior Prepayment Percentage.
"Group II 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 with
respect to the Group II Mortgage Loans as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property relating to a Group II Mortgage Loan 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 on the Group II Mortgage Loans 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 with respect to the Group II Mortgage Loans pursuant
to Section 4.03, (e) [reserved] and (f) any Group II Excess Diverted Interest
Reserve Deposit, reduced (to not less than zero) by (2) the portion of the
amount described in clause (1)(a) above that represents (i) Monthly Payments on
the Group II 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)
25
Principal Prepayments 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 Group II Mortgage
Loans during a period subsequent to the related Prepayment Period), (iii)
Liquidation Proceeds and Insurance Proceeds received in respect of the Group II
Mortgage Loans after the related Prepayment Period, (iv) amounts reimbursable or
payable with respect to the Group II Mortgage Loans to the Depositor, the Master
Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section
3.11(a)(ii)-(ix) or Section 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) [reserved], (vi) the Trustee Fee
attributable to the Group II Mortgage Loans payable from the Distribution
Account pursuant to Section 8.05 and (vii) amounts deposited in the Collection
Account or the Distribution Account in error with respect to the Group II
Mortgage Loans. Notwithstanding the foregoing, the Group II Available
Distribution Amount for any Distribution Date shall be increased (in the case of
an Undercollateralized Loan Group with respect to Loan Group II) or decreased
(in the case of an Overcollateralized Loan Group with respect to Loan Group II)
by any applicable Diverted Interest Amount or Class AV Principal Adjustment
Amount, in each case for such Distribution Date.
"Group II Excess Diverted Interest Reserve Deposit": An amount
withdrawn from the Excess Diverted Interest Reserve Account equal to the lesser
of (i) the amount on deposit in the Excess Diverted Interest Reserve Account and
(ii) the sum of (a) any interest shortfalls on the Class AV-2 Certificates and
(b) the aggregate amount of Realized Losses on the Group II Mortgage Loans on
such Distribution Date.
"Group II Mortgage Loan": A first lien adjustable-rate
Mortgage Loan whose next Adjustment Date will occur between 19 and 36 months
following the Closing Date. The Group II Mortgage Loans are identified as such
on the Mortgage Loan Schedule.
"Group II Senior Percentage": With respect to any Distribution
Date and the Class AV-2 Certificates, the lesser of (a) 100% and (b) a fraction,
expressed as a percentage, the numerator of which is the excess, if any, of the
aggregate Certificate Principal Balance of the Class AV-2 Certificates for such
Distribution Date over the aggregate amount, if any, payable to the Holders of
the Class AV-2 Certificates on such date pursuant to clause (d) of the
definition of "Group I/IV Senior Principal Distribution Amount," and the
denominator of which is the sum of (i) the Scheduled Principal Balance of each
of the Group II Mortgage Loans, plus (ii) the Scheduled Principal Balance of
each of the REO Properties in Loan Group II, in each case before reduction for
any Realized Losses on such Distribution Date.
Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the Group II Mortgage Loans exceed the Certificate Principal
Balance of the Class AV-2 Certificates, the Group II Senior Percentage will
equal the lesser of (i) 100% and (ii) the sum of the Certificate Principal
Balance of the Class AV-2 Certificates immediately prior to such Distribution
Date plus the Overcollateralized Amount divided by the Scheduled Principal
Balances of the Group II Mortgage Loans immediately prior to such Distribution
Date. On any Distribution Date after the reduction of the Certificate Principal
Balance of the Class AV-1 Certificates, the Class AV-3 Certificates and the
Class AV-4 Certificates to zero, the Group II Senior Percentage will be a
percentage equal to the Certificate Principal Balance of the Class AV-2
Certificates immediately
26
prior to such Distribution Date divided by the Scheduled Principal Balances of
the Mortgage Loans immediately prior to such Distribution Date.
"Group II Senior Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
April 2003 through March 2013 100%
April 2013 through March 2014 Group II Senior Percentage, plus 70% of the Group II
Subordinate Percentage
April 2014 through March 2015 Group II Senior Percentage, plus 60% of the Group II
Subordinate Percentage
April 2015 through March 2016 Group II Senior Percentage, plus 40% of the Group II
Subordinate Percentage
April 2016 through March 2017 Group II Senior Percentage, plus 20% of the Group II
Subordinate Percentage
April 2017 and thereafter Group II Senior Percentage;
provided, however, no reduction to the Group II Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Group I/IV Mortgage Loans delinquent 60
days or more (including REO Properties and Group I/IV Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group I/IV Subordinate
Certificates and (ii) Realized Losses on the Group I/IV Mortgage Loans to date
are less than the then applicable Group I/IV Trigger Amount.
Notwithstanding the above, if on any Distribution Date (a) the
Group I/IV Subordinate Percentage, prior to giving effect to any distributions
on such Distribution Date, equals or exceeds two times the initial Group I/IV
Subordinate Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding paragraph are met, then the Group II Senior Prepayment
Percentage for such Distribution Date will equal 100%, if such Distribution Date
is prior to April 2006, and will equal the Group II Senior Percentage for such
Distribution Date, if such Distribution Date occurs on or after April 2006.
On any Distribution Date on which the Group I/IV Senior
Percentage exceeds the initial Group I/IV Senior Percentage, the Group II Senior
Prepayment Percentage shall be 100%.
"Group II Subordinate Percentage": With respect to the Group
I/IV Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group II Senior Percentage.
27
"Group II Subordinate Prepayment Percentage": With respect to
the Group I/IV Subordinate Certificates and any Distribution Date, a percentage
equal to 100% minus the Group II Senior Prepayment Percentage.
"Group III 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 with
respect to the Group III Mortgage Loans as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property relating to a Group III Mortgage Loan 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 remitted by the
Master Servicer to the Trustee for deposit in the Distribution Account in
respect of Prepayment Interest Shortfalls on the Group III Mortgage Loans 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 with respect to
the Group III Mortgage Loans pursuant to Section 4.03, (e) [reserved] and (f)
any Group III Excess Diverted Interest Reserve Deposit, reduced (to not less
than zero) by (2) the portion of the amount described in clause (1)(a) above
that represents (i) Monthly Payments on the Group III 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 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 Group III Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Group III Mortgage Loans after the
related Prepayment Period, (iv) amounts reimbursable or payable with respect to
the Group III Mortgage Loans to the Depositor, the Master Servicer, the Trustee,
the Seller or any Sub-Servicer pursuant to Section 3.11(a)(ii)-(ix) or Section
3.12 or otherwise payable in respect of Extraordinary Trust Fund Expenses, (v)
[reserved], (vi) the Trustee Fee attributable to the Group III Mortgage Loans
payable from the Distribution Account pursuant to Section 8.05 and (vii) amounts
deposited in the Collection Account or the Distribution Account in error with
respect to the Group III Mortgage Loans. Notwithstanding the foregoing, the
Group III Available Distribution Amount for any Distribution Date shall be
increased (in the case of an Undercollateralized Loan Group with respect to Loan
Group III) or decreased (in the case of an Overcollateralized Loan Group with
respect to Loan Group III) by any applicable Diverted Interest Amount or Class
AV Principal Adjustment Amount, in each case for such Distribution Date.
"Group III Excess Diverted Interest Reserve Deposit": An
amount withdrawn from the Excess Diverted Interest Reserve Account equal to the
lesser of (i) the amount on deposit in the Excess Diverted Interest Reserve
Account and (ii) the sum of (a) any interest shortfalls on the Class AV-3
Certificates and (b) the aggregate amount of Realized Losses on the Group III
Mortgage Loans on such Distribution Date.
"Group III Mortgage Loan": A first lien adjustable-rate
Mortgage Loan whose next Adjustment Date will occur between 37 and 72 months or
more following the Closing Date. The Group III Mortgage Loans are identified as
such on the Mortgage Loan Schedule.
"Group III Senior Percentage": With respect to any
Distribution Date and the Class AV-3 Certificates, the lesser of (a) 100% and
(b) a fraction, expressed as a percentage, the numerator
28
of which is the excess, if any, of the aggregate Certificate Principal Balance
of the Class AV-3 Certificates for such Distribution Date over the aggregate
amount, if any, payable to the Holders of the Class AV-3 Certificates on such
date pursuant to clause (d) of the definition of "Group I/IV Senior Principal
Distribution Amount," and the denominator of which is the sum of (i) the
Scheduled Principal Balance of each of the Group III Mortgage Loans, plus (ii)
the Scheduled Principal Balance of each of the REO Properties in Loan Group III,
in each case before reduction for any Realized Losses on such Distribution Date.
Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the Group III Mortgage Loans exceed the Certificate Principal
Balance of the Class AV-3 Certificates, the Group III Senior Percentage will
equal the lesser of (i) 100% and (ii) the sum of the Certificate Principal
Balance of the Class AV-3 Certificates immediately prior to such Distribution
Date plus the Overcollateralized Amount divided by the Scheduled Principal
Balances of the Group III Mortgage Loans immediately prior to such Distribution
Date. On any Distribution Date after the reduction of the Certificate Principal
Balance of the Class AV-1 Certificates, the Class AV-2 Certificates and the
Class AV-4 Certificates to zero, the Group III Senior Percentage will be a
percentage equal to the Certificate Principal Balance of the Class AV-3
Certificates immediately prior to such Distribution Date divided by the
Scheduled Principal Balances of the Mortgage Loans immediately prior to such
Distribution Date.
"Group III Senior Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
April 2003 through March 2013 100%
April 2013 through March 2014 Group III Senior Percentage, plus 70% of the Group III
Subordinate Percentage
April 2014 through March 2015 Group III Senior Percentage, plus 60% of the Group III
Subordinate Percentage
April 2015 through March 2016 Group III Senior Percentage, plus 40% of the Group III
Subordinate Percentage
April 2016 through March 2017 Group III Senior Percentage, plus 20% of the Group III
Subordinate Percentage
April 2017 and thereafter Group III Senior Percentage;
provided, however, no reduction to the Group III Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Group I/IV Mortgage Loans delinquent 60
days or more (including REO Properties and Group I/IV Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group I/IV Subordinate
Certificates and (ii) Realized Losses on the Group I/IV Mortgage Loans to date
are less than the then applicable Group I/IV Trigger Amount.
29
Notwithstanding the above, if on any Distribution Date (a) the
Group I/IV Subordinate Percentage, prior to giving effect to any distributions
on such Distribution Date, equals or exceeds two times the initial Group I/IV
Subordinate Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding paragraph are met, then the Group III Senior Prepayment
Percentage for such Distribution Date will equal 100%, if such Distribution Date
is prior to April 2006, and will equal the Group III Senior Percentage for such
Distribution Date, if such Distribution Date occurs on or after April 2006.
On any Distribution Date on which the Group I/IV Senior
Percentage exceeds the initial Group I/IV Senior Percentage, the Group III
Senior Prepayment Percentage shall be 100%.
"Group III Subordinate Percentage": With respect to the Group
I/IV Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group III Senior Percentage.
"Group III Subordinate Prepayment Percentage": With respect to
the Group I/IV Subordinate Certificates and any Distribution Date, a percentage
equal to 100% minus the Group III Senior Prepayment Percentage.
"Group IV 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 with
respect to the Group IV Mortgage Loans as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property relating to a Group IV Mortgage Loan 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 on the Group IV Mortgage Loans 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 with respect to the Group IV Mortgage Loans pursuant
to Section 4.03, (e) [reserved] and (f) any Group IV Excess Diverted Interest
Reserve Deposit, reduced (to not less than zero) by (2) the portion of the
amount described in clause (1)(a) above that represents (i) Monthly Payments on
the Group IV 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 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 Group IV
Mortgage Loans during a period subsequent to the related Prepayment Period),
(iii) Liquidation Proceeds and Insurance Proceeds received in respect of the
Group IV Mortgage Loans after the related Prepayment Period, (iv) amounts
reimbursable or payable with respect to the Group IV Mortgage Loans to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.11(a)(ii)-(ix) or Section 3.12 or otherwise payable in
respect of Extraordinary Trust Fund Expenses, (v) [reserved], (vi) the Trustee
Fee attributable to the Group IV Mortgage Loans payable from the Distribution
Account pursuant to Section 8.05 and (vii) amounts deposited in the Collection
Account or the Distribution Account in error with respect to the Group IV
Mortgage Loans. Notwithstanding the foregoing, the Group IV Available
Distribution Amount for any Distribution Date shall be increased (in the case of
an Undercollateralized Loan Group with respect to Loan Group IV) or decreased
(in the case of an
30
Overcollateralized Loan Group with respect to Loan Group IV) by any applicable
Diverted Interest Amount or Class AV Principal Adjustment Amount, in each case
for such Distribution Date.
"Group IV Excess Diverted Interest Reserve Deposit": An amount
withdrawn from the Excess Diverted Interest Reserve Account equal to the lesser
of (i) the amount on deposit in the Excess Diverted Interest Reserve Account and
(ii) the sum of (a) any interest shortfalls on the Class AV-4 Certificates and
(b) the aggregate amount of Realized Losses on the Group IV Mortgage Loans on
such Distribution Date.
"Group IV Mortgage Loan": A first lien adjustable-rate
Mortgage Loan whose next Adjustment Date will occur more than 72 months
following the Closing Date. The Group III Mortgage Loans are identified as such
on the Mortgage Loan Schedule.
"Group IV Senior Percentage": With respect to any Distribution
Date and the Class AV-4 Certificates, the lesser of (a) 100% and (b) a fraction,
expressed as a percentage, the numerator of which is the excess, if any, of the
aggregate Certificate Principal Balance of the Class AV-4 Certificates and the
Class R-I Certificates for such Distribution Date over the aggregate amount, if
any, payable to the Holders of the Class AV-4 Certificates on such date pursuant
to clause (d) of the definition of "Group I/IV Senior Principal Distribution
Amount," and the denominator of which is the sum of (i) the Scheduled Principal
Balance of each of the Group IV Mortgage Loans, plus (ii) the Scheduled
Principal Balance of each of the REO Properties in Loan Group IV, in each case
before reduction for any Realized Losses on such Distribution Date.
Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the Group IV Mortgage Loans exceed the Certificate Principal
Balance of the Class AV-4 Certificates, the Group IV Senior Percentage will
equal the lesser of (i) 100% and (ii) the sum of the Certificate Principal
Balance of the Class AV-4 Certificates immediately prior to such Distribution
Date plus the Overcollateralized Amount divided by the Scheduled Principal
Balances of the Group IV Mortgage Loans immediately prior to such Distribution
Date. On any Distribution Date after the reduction of the Certificate Principal
Balance of the Class AV-1 Certificates, the Class AV-2 Certificates and the
Class AV-3 Certificates to zero, the Group IV Senior Percentage will be a
percentage equal to the Certificate Principal Balance of the Class AV-4
Certificates immediately prior to such Distribution Date divided by the
Scheduled Principal Balances of the Mortgage Loans immediately prior to such
Distribution Date.
"Group IV Senior Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
April 2003 through March 2013 100%
April 2013 through March 2014 Group IV Senior Percentage, plus 70% of the Group IV
Subordinate Percentage
April 2014 through March 2015 Group IV Senior Percentage, plus 60% of the Group IV
Subordinate Percentage
31
April 2015 through March 2016 Group IV Senior Percentage, plus 40% of the Group IV
Subordinate Percentage
April 2016 through March 2017 Group IV Senior Percentage, plus 20% of the Group IV
Subordinate Percentage
April 2017 and thereafter Group IV Senior Percentage;
provided, however, no reduction to the Group IV Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Group I/IV Mortgage Loans delinquent 60
days or more (including REO Properties and Group I/IV Mortgage Loans in
foreclosure) averaged over the last six months does not exceed 50% of the sum of
the then current Certificate Principal Balances of the Group I/IV Subordinate
Certificates and (ii) Realized Losses on the Group I/IV Mortgage Loans to date
are less than the then applicable Group I/IV Trigger Amount.
Notwithstanding the above, if on any Distribution Date (a) the
Group I/IV Subordinate Percentage, prior to giving effect to any distributions
on such Distribution Date, equals or exceeds two times the initial Group I/IV
Subordinate Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding paragraph are met, then the Group IV Senior Prepayment
Percentage for such Distribution Date will equal 100%, if such Distribution Date
is prior to April 2006, and will equal the Group IV Senior Percentage for such
Distribution Date, if such Distribution Date occurs on or after April 2006.
On any Distribution Date on which the Group I/IV Senior
Percentage exceeds the initial Group I/IV Senior Percentage, the Group IV Senior
Prepayment Percentage shall be 100%.
"Group IV Subordinate Percentage": With respect to the Group
I/IV Subordinate Certificates and any Distribution Date, a percentage equal to
100% minus the Group IV Senior Percentage.
"Group IV Subordinate Prepayment Percentage": With respect to
the Group I/IV Subordinate Certificates and any Distribution Date, a percentage
equal to 100% minus the Group IV Senior Prepayment Percentage.
"Group V 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 with
respect to the Group V Mortgage Loans as of the close of business on the related
Determination Date, (b) the aggregate of any amounts received in respect of an
REO Property relating to a Group V Mortgage Loan 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 on
the Group V Mortgage Loans 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 with respect to the Group V Mortgage Loans pursuant to Section
4.03 and (e) [reserved], reduced (to not less than zero) by (2) the portion of
the amount described in clause (1)(a) above that represents (i) Monthly Payments
on the Group V Mortgage Loans received from
32
a Mortgagor on or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments 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 Group V Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Group V Mortgage Loans after the related Prepayment Period,
(iv) amounts reimbursable or payable with respect to the Group V Mortgage Loans
to the Depositor, the Master Servicer, the Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11(a)(ii)-(ix) or Section 3.12 or otherwise
payable in respect of Extraordinary Trust Fund Expenses, (v) [reserved], (vi)
the Trustee Fee attributable to the Group V Mortgage Loans payable from the
Distribution Account pursuant to Section 8.05 and (vii) amounts deposited in the
Collection Account or the Distribution Account in error with respect to the
Group V Mortgage Loans.
"Group V Bankruptcy Amount": As of any date of determination,
an amount equal to the excess, if any, of (A) $50,000 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Group V Subordinate
Certificates in accordance with Section 4.04.
"Group V Certificates": The Class AF Certificates, Class IO
Certificates, Class PO Certificates, Class BF-1 Certificates, Class BF-1
Certificates, Class BF-3 Certificates, Class BF-4 Certificates, Class BF-5
Certificates and Class BF-6 Certificates.
"Group V Fraud Loss Amount": As of any date of determination
after the Cut-off Date, prior to the third anniversary of the Cut-off Date, an
amount equal to 1.00% of the aggregate principal balance of the Group V Mortgage
Loans as of the Cut-off Date minus the aggregate amount of Fraud Losses on the
Group V Mortgage Loans allocated solely to the Group V Subordinate Certificates
in accordance with Section 4.04 since the Cut-off Date up to such date of
determination. In addition, after the Certificate Principal Balances of the
Group V Subordinate Certificates are reduced to zero, the Group V Fraud Loss
Amount will be zero.
"Group V Mortgage Loan": A first lien fixed-rate Mortgage
Loan. The Group V Mortgage Loans are identified as such on the Mortgage Loan
Schedule.
"Group V Senior Interest Distribution Amount": With respect to
any Distribution Date, an amount equal to the aggregate of the Interest
Distribution Amounts for the Distribution Date on the Class AF Certificates and
the Class IO Certificates.
"Group V Senior Percentage": With respect to any Distribution
Date and the Class AF Certificates, the lesser of (a) 100% and (b) a fraction,
expressed as a percentage, the numerator of which is the excess, if any, of the
aggregate Certificate Principal Balance of the Class AF Certificates and the
Class R-II Certificates for such Distribution Date over the aggregate amount, if
any, payable to the Holders of the Class AF Certificates on such date pursuant
to clause (d) of the definition of "Group V Senior Principal Distribution
Amount," and the denominator of which is the sum of (i) the Non-Class PO
Percentages of the Scheduled Principal Balance of each of the Group V Mortgage
Loans, plus (ii) the Scheduled Principal Balance of each of the REO Properties
in Loan Group V, in each case before reduction for any Realized Losses on such
Distribution Date.
33
"Group V Senior Prepayment Percentage": With respect to any
Distribution Date within the range indicated below, the percentage as indicated
below:
Distribution Date Senior Prepayment Percentage
----------------- ----------------------------
April 2003 through March 2008 100%
April 2008 through March 2009 Group V Senior Percentage, plus 70% of the Group V
Subordinate Percentage
April 2009 through March 2010 Group V Senior Percentage, plus 60% of the Group V
Subordinate Percentage
April 2010 through March 2011 Group V Senior Percentage, plus 40% of the Group V
Subordinate Percentage
April 2011 through March 2012 Group V Senior Percentage, plus 20% of the Group V
Subordinate Percentage
April 2012 and thereafter Group V Senior Percentage;
provided, however, no reduction to the Group V Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Group V Mortgage Loans delinquent 60 days
or more (including REO Properties and Group V Mortgage Loans in foreclosure)
averaged over the last six months does not exceed 50% of the sum of the then
current Certificate Principal Balances of the Group V Subordinate Certificates
and (ii) Realized Losses on the Group V Mortgage Loans to date are less than the
then applicable Group V Trigger Amount.
On any Distribution Date on which the Group V Senior
Percentage exceeds the initial Group V Senior Percentage, the Group V Senior
Prepayment Percentage shall be 100%.
"Group V Senior Principal Distribution Amount": For any
Distribution Date and the Group V Senior Certificates, an amount equal to the
sum of:
(a) the product of (x) the then-applicable related Group V
Senior Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the
aggregate of the principal portions of all Monthly Payments
due during the related Due Period in respect of the related
Group V Mortgage Loans whether or not received;
(ii) the related Non-Class PO Percentage of the
principal portion of all Insurance Proceeds and Liquidation
Proceeds (other than amounts described in clause (c) below)
received in respect of the related Group V Mortgage Loans
during the related Prepayment Period (other than any related
Group V Mortgage Loan that was purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01 during the related Prepayment Period),
net of any portion
34
thereof that represents a recovery of principal for which an
advance was made by the Master Servicer pursuant to Section
4.03 in respect of a preceding Distribution Date;
(iii) the related Non-Class PO Percentage of the
Stated Principal Balance (calculated immediately prior to such
Distribution Date) of each related Group V Mortgage Loan that
was purchased, sold or replaced pursuant to or as contemplated
by Section 2.03, Section 3.16(c) or Section 9.01 during the
related Prepayment Period;
(iv) the related Non-PO Percentage of all REO
Principal Amortization collected in respect of any REO
Property during the related Prepayment Period; and
(v) in connection with the substitution of one or
more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans in Loan Group V pursuant to Section
2.03 during the related Prepayment Period, the excess, if any,
of (A) the aggregate of the related Non-Class PO Percentage of
the Stated Principal Balances (calculated as of the respective
dates of substitution) of such Deleted Mortgage Loans, net of
the aggregate of the related Non-Class PO Percentage of the
principal portions of the Monthly Payments due during the
related Prepayment Period (to the extent received from the
related Mortgagor or advanced by the Master Servicer and
distributed pursuant to Section 4.01 on the Distribution Date
in the related Prepayment Period) in respect of each such
Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B)
the aggregate of the related Non-Class PO Percentage of the
Stated Principal Balances (calculated as of the respective
dates of substitution) of such Qualified Substitute Mortgage
Loans;
(b) the product of (x) the then-applicable related Group V
Senior Prepayment Percentage and (y) the related Non-Class PO Percentage of all
Principal Prepayments received in respect of the related Group V Mortgage Loans
during the related Prepayment Period;
(c) with respect to any related Group V Mortgage Loan which
was the subject of a Final Recovery Determination in the related Prepayment
Period, the least of (a) the then-applicable related Group V Senior Prepayment
Percentage of the Non-Class PO Percentage multiplied by the net Liquidation
Proceeds and Insurance Proceeds allocable to principal in respect of the related
Group V Mortgage Loans, (b) the then-applicable related Group V Senior
Percentage of the Non-Class PO Percentage multiplied by the Scheduled Principal
Balance of the related Group V Mortgage Loan at the time of such Final Recovery
Determination; and (c) the principal portion of all amounts collected in
connection with such a Final Recovery Determination to the extent not
distributed to the Class PO Certificates; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the related
Group V Senior Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Group V Senior Certificates on such immediately preceding Distribution
Date
35
pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses which were allocated to the Group V Subordinate
Certificates pursuant to Section 4.04.
"Group V Special Hazard Amount": Initially, an amount equal to
$1,090,406. As of each anniversary of the Cut-off Date, the Special Hazard
Amount shall equal the lesser of (i) the related Group V Special Hazard Amount
on the immediately preceding anniversary of the Cut-off Date less the sum of all
amounts allocated to the Group V Subordinate Certificates in respect of Special
Hazard Losses on the Group V Mortgage Loans during such year and (ii) the
Adjustment Amount for such anniversary. The "Adjustment Amount" with respect to
each anniversary of the Cut-off Date will be equal to the greatest of (i) 1.00%
multiplied by the aggregate outstanding principal balance of the Group V
Mortgage Loans on the Distribution Date immediately preceding such anniversary,
(ii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans secured by Mortgaged
Properties located in the California postal zip code area in which the highest
percentage of related Group V Mortgage Loans based on outstanding principal
balance are located and (iii) two times the outstanding principal balance of the
Group V Mortgage Loan having the largest outstanding principal balance, in each
case as of such anniversary of the Cut-off Date. After the Certificate Principal
Balances of the Group V Subordinate Certificates are reduced to zero, the Group
V Special Hazard Amount will be zero.
"Group V Subordinate Percentage": With respect to the Group V
Subordinate Certificates and any Distribution Date, a percentage equal to 100%
minus the Group V Senior Percentage.
"Group V Subordinate Prepayment Percentage": With respect to
the Group V Subordinate Certificates and any Distribution Date, a percentage
equal to 100% minus the Group V Senior Prepayment Percentage.
"Group V Subordinate Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:
(a) the product of (x) the then-applicable Group V Subordinate
Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the
aggregate of the principal portions of all Monthly Payments
due during the related Due Period in respect of the Group V
Mortgage Loans whether or not received;
(ii) the related Non-Class PO Percentage of the
principal portion of all Insurance Proceeds and Liquidation
Proceeds (other than amounts described in clause (c) below)
received in respect of the Group V Mortgage Loans during the
related Prepayment Period (other than any such Group V
Mortgage Loan that was purchased, sold or replaced pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01 during the related Prepayment Period), net of any portion
thereof that represents a recovery of principal for which an
advance was made by the Master Servicer pursuant to Section
4.03 in respect of a preceding Distribution Date;
36
(iii) the related Non-Class PO Percentage of the
Stated Principal Balance (calculated immediately prior to such
Distribution Date) of each Group V Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the
related Prepayment Period;
(iv) the related Non-PO Percentage of all REO
Principal Amortization collected in respect of any REO
Property during the related Prepayment Period; and
(v) in connection with the substitution of one or
more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans in Loan Group V pursuant to Section
2.03 during the related Prepayment Period, the excess, if any,
of (A) the aggregate of the related Non-Class PO Percentage of
the Stated Principal Balances (calculated as of the respective
dates of substitution) of such Deleted Mortgage Loans, net of
the aggregate of the related Non-Class PO Percentage of the
principal portions of the Monthly Payments due during the
related Prepayment Period (to the extent received from the
related Mortgagor or advanced by the Master Servicer and
distributed pursuant to Section 4.01 on the Distribution Date
in the related Prepayment Period) in respect of each such
Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B)
the aggregate of the related Non-Class PO Percentage of the
Stated Principal Balances (calculated as of the respective
dates of substitution) of such Qualified Substitute Mortgage
Loans;
(b) the product of (x) the then-applicable Group V Subordinate
Prepayment Percentage and (y) related Non-Class PO Percentage of all Principal
Prepayments received in respect of the Group V Mortgage Loans during the related
Prepayment Period;
(c) with respect to any Group V Mortgage Loans which were the
subject of a Final Recovery Determination in the related Prepayment Period, the
amount, if any, by which the net Liquidation Proceeds and Insurance Proceeds
allocable to principal in respect of such Group V Mortgage Loans exceed the
amount distributable to the Class AF Certificates and the Class PO Certificates
pursuant to clause (c) of the definition of "Group V Senior Principal
Distribution Amount" and clause (c) of the definition of "Class PO Principal
Distribution Amount"; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the Group V
Subordinate Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Group V Subordinate Certificates on such immediately preceding
Distribution Date pursuant to Section 4.01 to the extent that any such amounts
are not attributable to Realized Losses that were allocated to the Group V
Subordinate Certificates pursuant to Section 4.04.
"Group V Subordinate Certificate": Any Class BF-1 Certificate,
Class BF-2 Certificate, Class BF-3 Certificate, Class BF-4 Certificate, Class
BF-5 Certificate or Class BF-6 Certificate.
37
"Group V Trigger Amount": With respect to the Class AF
Certificates and any Distribution Date, the Group V Trigger Amount occurring
after the first five years will be as follows: for any Distribution Date during
the sixth year after the Closing Date, 30% of the initial aggregate Certificate
Principal Balances of the Group V Subordinate Certificates; for any Distribution
Date during the seventh year after the Closing Date, 35% of the initial
aggregate Certificate Principal Balances of the Group V Subordinate
Certificates; for any Distribution Date during the eighth year after the Closing
Date, 40% of the initial aggregate Certificate Principal Balances of the Group V
Subordinate Certificates; for any Distribution Date during the ninth year after
the Closing Date, 45% of the initial aggregate Certificate Principal Balances of
the Group V Subordinate Certificates; and for any Distribution Date during the
tenth year (or any year thereafter) after the Closing Date, 50% of the initial
aggregate Certificate Principal Balances of the Group V Subordinate
Certificates.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor, the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor, the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, 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 have 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 any Group I Mortgage Loan, Group II
Mortgage Loan, Group III Mortgage Loan or Group IV Mortgage Loan, the index for
the adjustment of the Mortgage Rate set forth as such on the related Mortgage
Note.
"Initial Periodic Rate Cap": With respect to each Group I
Mortgage Loan, Group II Mortgage Loan, Group III Mortgage Loan and Group IV
Mortgage Loan, the maximum increase or decrease in the Mortgage Rate on the
first Adjustment Date as provided in the related Mortgage Note.
38
"Insurance Proceeds": Proceeds of any Primary Mortgage
Insurance Policy, title policy, hazard policy or other insurance policy covering
a Mortgage Loan, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and any Class of Regular Certificates (other than the Class PO
Certificates), the one-month period ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs.
"Interest Distribution Amount": With respect to any Class of
Regular Certificates (other than the Class PO Certificates) for any Distribution
Date, an amount equal to one month's interest accrued during the most recently
ended Interest Accrual Period at the applicable Pass- Through Rate on the
Certificate Principal Balance thereof immediately prior to such Distribution
Date. The Class PO Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. The Interest Distribution
Amount for any Class of Regular Certificates (a) will also include, in the case
of any Distribution Date subsequent to the initial Distribution Date, the
excess, if any, of the Interest Distribution Amount in respect of such Class of
Certificates for the immediately preceding Distribution Date, over the aggregate
distributions of interest made in respect of such Class of Certificates pursuant
to Section 4.01(a)(1) on such immediately preceding Distribution Date and (b)
will be reduced, in the case of any Distribution Date, by the 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
that were allocated to such Certificates on such Distribution Date pursuant to
Section 1.02. The Interest Distribution Amount for any Class of Certificates
will be based on a 360 day year consisting of twelve 30 day Interest Accrual
Periods.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent for
such Due Period and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from 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 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 (including any 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
39
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 Group": Any of Loan Group I, Loan Group II, Loan Group
III, Loan Group IV or Loan Group V.
"Loan Group I": The Loan Group consisting of the Group I
Mortgage Loans. With respect to the Class AV-1 Certificates, Loan Group I is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.
"Loan Group II": The Loan Group consisting of the Group II
Mortgage Loans. With respect to the Class AV-2 Certificates, Loan Group II is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.
"Loan Group III": The Loan Group consisting of the Group III
Mortgage Loans. With respect to the Class AV-3 Certificates, Loan Group III is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.
"Loan Group IV": The Loan Group consisting of the Group IV
Mortgage Loans. With respect to the Class AV-4 Certificates, Loan Group IV is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.
"Loan Group V": The Loan Group consisting of the Group V
Mortgage Loans. With respect to the Class AF Certificates, Loan Group V is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"Master Servicer": National Bank of Commerce or any successor
master servicer appointed as herein provided, in its capacity as Master Servicer
hereunder.
"Master Servicer Event of Default": One or more of the events
described in Section 7.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, 12:00 p.m. New York City time on the Business Day preceding
the Distribution Date.
40
"Maximum Mortgage Rate": With respect to each Group I Mortgage
Loan, Group II Mortgage Loan, Group III Mortgage Loan and Group IV Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Minimum Mortgage Rate": With respect to each Group I Mortgage
Loan, Group II Mortgage Loan, Group III Mortgage Loan and Group IV 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, Inc., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
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 between the
Depositor and the Seller 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 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. The
Mortgage Loan Schedule shall set forth the following information with respect to
each Mortgage Loan:
(i) the Master Servicer'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;
41
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the original date of the mortgage;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) the date on which the first Monthly Payment was due
on the Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment as of the Cut-off
Date;
(xiii) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal
Balance;
(xiv) the original principal amount of the Mortgage Loan;
(xv) the Scheduled Principal Balance of the Mortgage Loan
as of the close of business on the Cut-off Date;
(xvi) a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, Rate/Term Refinancing,
Cash-Out Refinancing);
(xvii) a code indicating the documentation style (i.e., full
documentation or no documentation);
(xviii) the Value of the Mortgaged Property;
(xix) the actual unpaid principal balance of the Mortgage
Loan as of the Cut-off Date;
(xx) with respect to the Group I/IV Mortgage Loans the
Gross Margin, the Maximum Mortgage Rate, the Minimum
Mortgage Rate, the Initial Periodic Rate Cap and the
Periodic Rate Cap and the next Adjustment Date
following the Cut-off Date;
(xxi) a code indicating if the Mortgage Loan is subject to
a Primary Mortgage Insurance Policy;
(xxii) the Loan Group; and
(xxiii) the Class PO Percentage.
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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; (4) the weighted average maturity of the Mortgage Loans; (5) the
Scheduled Principal Balance of the Mortgage Loans as of the close of business on
the Cut-off Date (not taking into account any Principal Prepayments received on
the Cut-off Date); and (6) the amount of the Monthly Payment as of the Cut-off
Date. The Seller shall amend the Mortgage Loan Schedule or cause the Mortgage
Loan Schedule to be amended from time to time in accordance with the provisions
of this Agreement. With respect to any Qualified Substitute Mortgage Loan,
Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan, which may, subject to
Section 2.01, be in the form of a lost note affidavit and indemnity with a copy
of such Note.
"Mortgage Pool": The pool of Mortgage Loans, consisting of
Loan Group I, Loan Group II, Loan Group III, Loan Group IV and Loan Group V,
identified on Schedule 1, as amended, from time to time and any REO Properties
acquired in respect thereof.
"Mortgage Rate": With respect to each Group V 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, without
regard to any reduction thereof as a result of a Debt Service Reduction or
operation of the Relief Act. With respect to each Group I Mortgage Loan, Group
II Mortgage Loan, Group III Mortgage Loan and Group IV 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, without regard to
any reduction thereof as a result of a Debt Service Reduction or operation of
the Relief Act, which rate (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, 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.
43
"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 applicable Servicing Fee Rate.
"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.
"Non-Class PO Percentage": With respect to each Class IO
Mortgage Loan, 100%. With respect to each Class PO Mortgage Loan, 100% less the
Class PO Percentage.
"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.
"Notional Amount": For any Distribution Date, with respect to
the Class IO Certificates, the aggregate Stated Principal Balance of the Group V
Mortgage Loans for such Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Seller or the Depositor, as
applicable; with respect to 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.
"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 REMIC I, REMIC II and REMIC III as a REMIC or (b)
compliance with the REMIC Provisions must be an opinion of Independent counsel.
"Original Group I Mortgage Loan": Any of the Mortgage Loans
included in Loan Group I as of the Closing Date.
"Original Group II Mortgage Loan": Any of the Mortgage Loans
included in Loan Group II as of the Closing Date.
"Original Group III Mortgage Loan": Any of the Mortgage Loans
included in Loan Group III as of the Closing Date.
44
"Original Group IV Mortgage Loan": Any of the Mortgage Loans
included in Loan Group IV as of the Closing Date.
"Original Group V Mortgage Loan": Any of the Mortgage Loans
included in Loan Group V as of the Closing Date.
"Overcollateralized Amount": As to any Distribution Date and
Group I/IV Mortgage Loans, an amount equal to the Undercollateralized Amount for
the unrelated Class or Classes of Class AV Certificates.
"Overcollateralized Loan Group": As to any Distribution Date,
any such Loan Group for which an Overcollateralized Amount greater than zero is
calculated.
"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 AV-1
Certificates and any Distribution Date, a rate per annum equal to the weighted
average of the Expense Adjusted Mortgage Rates of the Group I Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date; provided, however, for federal income tax purposes, such
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the REMIC I Remittance Rate on REMIC I Regular
Interest LT-1A, weighted on the basis of such REMIC I Regular Interest's
Uncertificated Balance.
With respect to the Class AV-2 Certificates and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of
the outstanding Stated Principal Balances of the Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date; provided,
however, for federal income tax purposes, such Certificates will bear interest
at a rate equivalent to the foregoing, expressed as the weighted average of the
REMIC I Remittance Rate on REMIC I Regular Interest LT-2A, weighted on the basis
of such REMIC I Regular Interest's Uncertificated Balance.
With respect to the Class AV-3 Certificates and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates of the Group III Mortgage Loans, weighted on the basis
of the outstanding Stated Principal Balances of the Mortgage Loans as of the
first day of the month preceding the month of such Distribution Date; provided,
however, for federal income tax purposes, such Certificates will bear interest
at a rate equivalent to the foregoing, expressed as the weighted average of the
REMIC I Remittance Rate on REMIC I Regular Interest LT-3A, weighted on the basis
of such REMIC I Regular Interest's Uncertificated Balance.
With respect to the Class AV-4 Certificates and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates of the Group IV
45
Mortgage Loans, weighted on the basis of the outstanding Stated Principal
Balances of the Mortgage Loans as of the first day of the month preceding the
month of such Distribution Date; provided, however, for federal income tax
purposes, such Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the REMIC I Remittance Rate on
REMIC I Regular Interest LT-4A, weighted on the basis of such REMIC I Regular
Interest's Uncertificated Balance.
With respect to the Group I/IV Subordinate Certificates and
any Distribution Date, a rate per annum equal to the weighted average of the
Pass-Through Rates on the Class AV Certificates, weighted on the basis of the
outstanding Stated Principal Balances of the Group I/IV Mortgage Loans less the
Certificate Principal Balance of the Class AV Certificates as of the first day
of the month preceding the month of such Distribution Date; provided, however,
for federal income tax purposes, such Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the REMIC I
Remittance Rates on REMIC I Regular Interest LT-1B, REMIC I Regular Interest
LT-2B, REMIC I Regular Interest LT-3B and REMIC I Regular Interest LT-4B,
weighted on the basis of each such REMIC I Regular Interest's Uncertificated
Balance.
With respect to any Group V Certificate (other than the Class
IO Certificates and the Class PO Certificates) for any Distribution Date, 6.250%
per annum. With respect to the Class IO Certificates, for any Distribution Date,
the Weighted Average Stripped Mortgage Rate for such Distribution Date;
provided, however, for federal income tax purposes, the Class IO Certificates
will be entitled to 100% of the amount distributed to REMIC I Regular Interest
LT-IO. The Class PO Certificates shall have a Pass-Through Rate of 0.000% per
annum and shall not be entitled to any distributions of interest.
"Periodic Rate Cap": With respect to each Group I/IV Mortgage
Loans 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.
"Percentage Interest": With respect to a Certificate and the
related Class, a fraction, expressed as a percentage, the numerator of which is
the initial Certificate Principal Balance or Notional Amount represented by such
Certificate, and the denominator of which is the initial aggregate Certificate
Principal Balance or Notional Amount of all of the Certificates of such Class.
The Certificates are issuable only in Percentage Interests corresponding to
initial Certificate Principal Balances or Notional Amounts of $100,000 and
integral multiples of $1.00 in excess thereof. The Class PO Certificates, Class
IO Certificates and the Subordinate Certificates are issuable only in Percentage
Interests corresponding to the initial Certificate Principal Balances or
Notional Amounts of $100,000 and integral multiples of $1,000 in excess thereof;
provided, however, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. The Residual
Certificates are issuable only in Percentage Interests of 20% and multiples
thereof.
46
"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, advised or managed 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 the Rating
Agencies in its highest long-term unsecured rating category at the time
of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by the Rating Agencies 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 or managed by the Trustee or an Affiliate thereof, that have
been rated "AAA" by S&P, "AAA" by Fitch and "Aaa" by Xxxxx'x if so
rated by such Rating Agency; and
(vii) 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;
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.
47
"Person": Any individual, corporation, partnership, limited
liability company, 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 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.
"Prepayment Assumption": With respect to the Group I Mortgage
Loans, the Group I/IV Mortgage Loans, a prepayment rate for the Mortgage Loans
of 40% CPR. With respect to the Group V Mortgage Loans, a prepayment rate of 25%
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 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.
"Primary Mortgage Insurance Policy": Each primary policy of
mortgage guaranty insurance in effect as represented in the Mortgage Loan
Purchase Agreement and as so indicated on the Mortgage Loan Schedule, or any
replacement policy therefor obtained by the Master Servicer or any Sub-Servicer
pursuant to Section 3.13. Any Mortgage Loan which has a Primary Mortgage
Insurance Policy is set forth on Schedule 2 attached hereto.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Private Certificates": As defined in Section 5.02(b).
48
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.01, 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 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, minus 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(a)(ix) and Section 3.16(b); and
(v) in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Master Servicer or
the Trustee in respect of the breach or defect giving rise to the purchase
obligation.
"Qualified Insurer": Any insurer which meets the requirements
of Xxxxxx Xxx and Xxxxxxx Mac.
"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) with respect to the Group I/IV Mortgage
Loans have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on
the Deleted Mortgage Loan, (iv) with respect to the Group I/IV Mortgage Loans
have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the
Deleted Mortgage Loan, (v) with respect to the Group I/IV Mortgage Loans have a
Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi) with
respect to the Group I/IV Mortgage Loans have a next Adjustment Date not more
than two months later than the next Adjustment Date on the Deleted Mortgage
Loan, (vii) be covered under a Primary Mortgage Insurance Policy if such
Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%
and the Deleted Mortgage Loan was covered by a Primary Mortgage Insurance
Policy, (viii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan, (ix) have the same
Due Date as the Due Date on the Deleted Mortgage Loan, (x) have a Loan-to-Value
Ratio as of the date of
49
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (xi) [intentionally omitted]; and (xii) 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 terms described in clause (viii) shall be determined on the basis of
weighted average remaining terms to maturity, the Loan-to-Value Ratios described
in clause (x) 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 (xii) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not in excess of the existing first mortgage loan on the
related Mortgaged Property and related closing costs, and were used exclusively
to satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
"Rating Agencies": S&P, Fitch and Xxxxx'x or their successors.
If such agencies or their successors are no longer in existence, the "Rating
Agencies" shall be such nationally recognized statistical rating agencies, or
other comparable Persons, designated by the Depositor, written 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 prior to the
date 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)(A) and (B).
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, REMIC II or REMIC III,
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 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 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
50
(iii) 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 (iv) the aggregate of all P&I Advances and Servicing Advances made by the
Master Servicer in respect of such REO Property or the related Mortgage Loan and
any unpaid Servicing Fees for which the Master Servicer has been or, in
connection with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.11(a)(iii)(A) or (B) or Section 3.23 out of rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property, minus (v) 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.
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
Certificate, the last Business Day of the month immediately preceding the month
in which such Distribution Date occurs.
"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, Class IO
Certificate, Class PO Certificate or Subordinate 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 with the assets of REMIC II, 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 Group I/IV Mortgage Loans as from
51
time to time are subject to this Agreement, together with the Group I/IV
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 Group I/IV
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof; (iv) the Depositor's rights with
respect to the Group I/IV Mortgage Loans under the Mortgage Loan Purchase
Agreement (including any security interests created thereby and excluding
Section 17 thereof); and (v) the Collection Account, the Distribution Account
and any REO Account and such assets that are deposited therein from time to time
with respect to the Group I/IV Mortgage Loans and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, REMIC I specifically excludes all
payments and other collections of principal and interest due on the Group I/IV
Mortgage Loans on or before the Cut-off Date.
"REMIC I Regular Interests": The REMIC I Regular Interests, as
defined in the Preliminary Statement.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest LT-1A, REMIC I Regular Interest LT-2A, REMIC I Regular Interest LT-3A,
REMIC I Regular Interest LT-4A and REMIC I Regular Interest LT-1/4ZZ and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates of the Group I Mortgage Loans, Group II Mortgage Loans,
Group III Mortgage Loans and the Group IV Mortgage Loans, weighted on the basis
of the outstanding Stated Principal Balances of the Group I Mortgage Loans,
Group II Mortgage Loans, Group III Mortgage Loans and the Group IV Mortgage
Loans as of the first day of the month preceding the month of such Distribution
Date. With respect to REMIC I Regular Interest LT-1B, REMIC I Regular Interest
LT-2B, REMIC I Regular Interest LT-3B and REMIC I Regular Interest LT-4B and any
Distribution Date, a rate per annum equal to the weighted average of the Expense
Adjusted Mortgage Rates of the Group I Mortgage Loans, Group II Mortgage Loans,
Group III Mortgage Loans and Group IV Mortgage Loans, respectively, weighted on
the basis of the outstanding Stated Principal Balances of the Mortgage Loans as
of the first day of the month preceding the month of such Distribution Date.
"REMIC I Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Group I/IV Mortgage Loans in the related Loan Group over (y) the current
Principal Balance of the Class AV Certificates in the related Loan Group.
"REMIC II": The segregated pool of assets subject hereto,
constituting, with the assets of REMIC I, 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 Group V Mortgage Loans as from time to time are
subject to this Agreement, together with the Mortgage Files relating thereto,
and together with all collections thereon and proceeds thereof; (ii) any REO
Property, together with all collections thereon and proceeds thereof; (iii) the
Trustee's rights with respect to the Group V Mortgage Loans under all insurance
policies required to be maintained pursuant to this Agreement and any proceeds
thereof; (iv) the Depositor's rights with respect to the Group V Mortgage Loans
under the Mortgage Loan Purchase Agreement (including any security interests
created thereby and
52
excluding Section 17 thereof); and (v) the Collection Account, the Distribution
Account and any REO Account and such assets that are deposited therein from time
to time with respect to the Group V Mortgage Loans and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, REMIC II specifically excludes all
payments and other collections of principal and interest due on the Group V
Mortgage Loans on or before the Cut-off Date.
"REMIC II Regular Interests": The REMIC II Regular Interests,
as defined in the Preliminary Statement.
"REMIC II Remittance Rate": With respect to REMIC II Regular
Interest LT-5, 6.25% per annum. With respect to REMIC II Regular Interest LT-IO,
the Weighted Average Stripped Mortgage Rate for such Distribution Date. With
respect to REMIC II Regular Interest LT-PO, 0.00% per annum.
"REMIC II Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each of the REMIC II Regular Interests ending with
the designation "A," equal to the ratio among, with respect to each such REMIC
II Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance
of the Group V Mortgage Loans over (y) the current Principal Balance of the
Class AF Certificates.
"REMIC III": That group of assets contained in the Trust Fund
designated as a REMIC consisting of the REMIC I Regular Interests and REMIC II
Regular Interests.
"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 acceptable
to the Trustee prepared by the Master Servicer pursuant to Section 4.03 with
such reasonable 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": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of 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,
30 days' interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such
53
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 the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.
"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 Xxxxxx Xxx eligible condominium
project, or (iv) a detached one-family dwelling in a planned unit development,
none of which is a co-operative, mobile or manufactured home (as defined in 00
Xxxxxx Xxxxxx Code, Section 5402(6)).
"Residual Certificate": Any one of the Class R 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 President, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer, 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 Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of
54
each Monthly Payment due on or before such Due Date but subsequent to the
Cut-off Date, whether or not received, (ii) all Principal Prepayments received
before such Due Date but after the Cut-off Date, (iii) the principal portion of
all Liquidation Proceeds and Insurance Proceeds received before such Due Date
but after the Cut-off Date, net of any portion thereof that represents principal
due (without regard to any acceleration of payments under the related Mortgage
and Mortgage Note) on a Due Date occurring on or before the date on which such
proceeds were received and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation occurring before such Due Date, but only to
the extent such Realized Loss represents a reduction in the portion of principal
of such Mortgage Loan not yet due (without regard to any acceleration of
payments under the related Mortgage and Mortgage Note) as of the date of such
Deficient Valuation; and (c) as of any Due Date subsequent to the occurrence of
a Liquidation Event with respect to such Mortgage Loan, zero. With respect to
any REO Property: (a) as of any Due Date subsequent to the date of its
acquisition on behalf of the Trust Fund up to and including the Due Date in the
calendar month in which a Liquidation Event occurs with respect to such REO
Property, an amount (not less than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan as of the Due Date in the calendar month in
which such REO Property was acquired, minus the aggregate amount of REO
Principal Amortization, if any, in respect of such REO Property for all
previously ended calendar months; and (b) as of any Due Date subsequent to the
occurrence of a Liquidation Event with respect to such REO Property, zero.
"Seller": National Bank of Commerce, 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 3.13, 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 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.
55
"Servicing Fee Rate": With respect to the Group I/IV Mortgage
Loans, 0.375% per annum. With respect to the Group V Mortgage Loans, 0.25% per
annum.
"Servicing Officer": Any employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name appear on a list of Servicing Officers furnished by
the Master Servicer to the Trustee and the Depositor on the Closing Date, as
such list may from time to time be amended.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance or Notional Amount of $1,000. With
respect to the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in such Class.
"Special Hazard Loss": Any Realized Loss or portion thereof
not in excess of the lesser of the cost of repair or replacement of a Mortgaged
Property suffered by such Mortgaged Property by reason of damage caused by
certain hazards (including earthquakes, mudflows, and, to a limited extent,
floods) not insured against under the hazard insurance policies or fire or flood
insurance policies required to be maintained in respect of such Mortgaged
Property pursuant to Section 3.14, or by reason of the application of any
co-insurance provision. Special Hazard Losses shall not include any
Extraordinary Loss or any of the following:
(i) wear and tear, deterioration, rust or corrosion, mold, wet
or dry rot; inherent vice or latent defect; animals, birds, vermin,
insects;
(ii) smog, smoke, vapor, liquid or dust discharge from
agricultural or industrial operations; pollution; contamination;
(iii) settling, subsidence, cracking, shrinkage, bulging or
expansion of pavements, foundations, walls, floors, roofs or ceilings;
and
(iv) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then
only for the ensuing loss.
"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 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, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer
56
and distributed pursuant to Section 4.01 on or before such date of
determination, (ii) all Principal Prepayments received after the Cut-off Date,
to the extent distributed pursuant to Section 4.01 on or before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the Master Servicer as recoveries of principal in accordance with the provisions
of Section 3.16, to the extent distributed pursuant to Section 4.01 on or before
such date of determination, and (iv) any Realized Loss incurred with respect
thereto as a result of a Deficient Valuation made during or prior to the
Prepayment Period for the most recent Distribution Date coinciding with or
preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the sum of (I) if such REO
Property was acquired before the Distribution Date in any calendar month, the
principal portion of the Monthly Payment due on the Due Date in the calendar
month of acquisition, to the extent advanced by the Master Servicer and
distributed pursuant to Section 4.01 on or before such date of determination, to
the extent 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.
"Stripped Mortgage Rate": With respect to any Group V Mortgage
Loan or related REO Property, the excess, if any, of the Net Mortgage Rate minus
6.25% per annum.
"Subordinate Certificates": Together, the Group I/IV
Subordinate Certificates and the Group V Subordinate Certificates.
"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of REMIC I, REMIC II and REMIC III 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
57
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 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.
"Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and REMIC III.
"Trust REMIC": REMIC I, REMIC II and REMIC III.
"Trustee": Xxxxx Fargo Bank Minnesota, National Association,
or its successor in interest, or any successor trustee appointed as herein
provided.
"Trustee 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 the product of (i) the Trustee Fee Rate, multiplied by (ii)
the aggregate Stated Principal Balance of the Mortgage Loans and any REO
Properties as of the first day of the related Due Period.
"Trustee Fee Rate": 0.00475% per annum.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest and REMIC II Regular Interest (other than REMIC II Regular Interest
LT-IO) outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC I Regular Interest and 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 REMIC II Regular
Interest (other than REMIC II Regular Interest LT- IO) shall be reduced by all
distributions of principal made on such REMIC I Regular Interest or REMIC II
Regular Interest, as applicable, on such Distribution Date pursuant to Section
4.08 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.
"Undercollateralized Amount": As to any Distribution Date and
Loan Group I, the excess, if any, of the Certificate Principal Balance of the
Class AV-1 Certificates immediately following the distribution of the Group I/IV
Senior Principal Distribution Amount for such Distribution Date over the sum of
(i) the Scheduled Principal Balance of each of the Group I Mortgage Loans plus
(ii) the Scheduled Principal Balance of each of the REO Properties in Loan
58
Group I, in each case before reduction for any Realized Losses on such
Distribution Date. As to any Distribution Date and Loan Group II, the excess, if
any, of the Certificate Principal Balance of the Class AV-2 Certificates
immediately following the distribution of the Group I/IV Senior Principal
Distribution Amount for such Distribution Date over the sum of (i) the Scheduled
Principal Balance of each of the Group II Mortgage Loans plus (ii) the Scheduled
Principal Balance of each of the REO Properties in Loan Group II, in each case
before reduction for any Realized Losses on such Distribution Date. As to any
Distribution Date and Loan Group III, the excess, if any, of the Certificate
Principal Balance of the Class AV-3 Certificates immediately following the
distribution of the Group I/IV Senior Principal Distribution Amount for such
Distribution Date over the sum of (i) the Scheduled Principal Balance of each of
the Group III Mortgage Loans plus (ii) the Scheduled Principal Balance of each
of the REO Properties in Loan Group III, in each case before reduction for any
Realized Losses on such Distribution Date. As to any Distribution Date and Loan
Group IV, the excess, if any, of the Certificate Principal Balance of the Class
AV-4 Certificates immediately following the distribution of the Group I/IV
Senior Principal Distribution Amount for such Distribution Date over the sum of
(i) the Scheduled Principal Balance of each of the Group IV Mortgage Loans plus
(ii) the Scheduled Principal Balance of each of the REO Properties in Loan Group
IV, in each case before reduction for any Realized Losses on such Distribution
Date.
"Undercollateralized Loan Group": As to any Distribution Date
and Loan Group I, Loan Group II, Loan Group III and Loan Group IV, any such Loan
Group for which an Undercollateralized Amount greater than zero is calculated.
"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, any State thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations); provided that, for purposes solely of the restrictions on the
transfer of the Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, 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
59
of the Mortgage Loan 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 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.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, (i) 98% of all of the Voting Rights shall be allocated
to the Regular Certificates, other than the Class IO Certificates, in proportion
to their then outstanding Certificate Principal Balances, (ii) 1% of all of the
Voting Rights shall be allocated to the Class IO Certificates, in proportion to
their then outstanding Notional Amounts, and (iii) 1/2 of 1% of all Voting
Rights will be allocated among the holders of each Class of Residual
Certificates, in proportion to their Percentage Interests in each such Class.
All Voting Rights allocated to any Class of Certificates shall be allocated
among such Certificates PRO RATA in accordance with the respective Percentage
Interests evidenced thereby. In applying the Voting Rights to any significant
change to the provisions of this Agreement, only the approval of the holders of
at least a majority of the beneficial interests in the Certificates held by
entities other than the Master Servicer or any affiliates thereof shall be
considered.
"Weighted Average Stripped Mortgage Rate": With respect to any
Distribution Date, the weighted average of the Stripped Mortgage Rates in effect
during the most recently ended calendar month for the Group V Mortgage Loans and
REO Properties based on the respective Scheduled Principal Balances thereof as
of the Due Date in such most recently ended calendar month (or, in the case of
the initial Distribution Date, as of the Cut-off Date).
SECTION 1.02. Allocation of Certain Interest
Shortfalls.
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 Group
I/IV Mortgage Loans for any Distribution Date shall be allocated among the Group
I/IV Certificates, PRO RATA in accordance with, and to the extent of one month's
interest at the Pass-Through Rate on the respective Certificate Principal
Balance of such Certificate immediately prior to such Distribution Date. For
purposes of calculating the amount of Uncertificated Interest for the REMIC I
Regular Interests for any Distribution Date, he 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 Group I/IV Mortgage Loans for any Distribution Date
shall be allocated among REMIC I Regular Interest LT-1A, REMIC I Regular
Interest LT-1B, REMIC I Regular Interest LT-2A, REMIC I Regular Interest LT-2B,
REMIC I Regular Interest LT-3A, REMIC I Regular Interest LT-3B, REMIC I Regular
Interest LT-4A, REMIC I Regular Interest LT-4B and REMIC I Regular Interest
LT-1/4ZZ, PRO RATA in accordance with, and to the extent of one month's interest
at the REMIC I Remittance Rate on the respective Uncertificated Balance of such
REMIC I Regular Interest immediately prior to such 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 any Relief Act Interest Shortfalls
60
incurred in respect of the Group V Mortgage Loans for any Distribution Date
shall be allocated among the Group V Certificates (other than the Class PO
Certificates), PRO RATA in accordance with, and to the extent of one month's
interest at the Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount of such Certificate immediately prior to such
Distribution Date. For purposes of calculating the amount of Uncertificated
Interest for the REMIC II Regular Interests for any Distribution Date, he
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 Group V Mortgage Loans
for any Distribution Date shall be allocated among REMIC II Regular Interest
LT-5 and REMIC II Regular Interest LT-IO, PRO RATA in accordance with, and to
the extent of one month's interest at the REMIC II Remittance Rate on the
respective Uncertificated Balance of such REMIC II Regular Interest immediately
prior to such Distribution Date.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) 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 11 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.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee or the Custodian on behalf
of the Trustee, the following documents or instruments with respect to each
Mortgage Loan so transferred and assigned (a "Mortgage File"):
(i) The Mortgage Note, endorsed by manual or facsimile
signature without recourse by the Seller or an Affiliate of the Seller
in blank or to the Trustee showing a complete chain of endorsements
from the named payee to the Trustee or from the named payee to the
Affiliate of the Seller and from such Affiliate to the Trustee;
(ii) The original recorded Mortgage, with evidence of
recording thereon or a copy of the Mortgage certified by the public
recording office in those jurisdictions where the public recording
office retains the original and the original recorded power of attorney
or a copy of the power of attorney certified by the public recording
office, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon or a copy of the power of attorney
certified by the public recording office in those jurisdictions where
the public recording office retains the original;
(iii) An assignment of the Mortgage from the Seller or an
Affiliate of the Seller to the Trustee in recordable form which may be
included, where permitted by local law, in a blanket assignment or
assignments of the Mortgage to the Trustee, together with any
intervening assignments and showing a complete chain of title from the
original mortgagee named under the Mortgage to the Seller or an
Affiliate of the Seller and to the Trustee;
(iv) Any original assumption, modification or buydown
agreement applicable to the Mortgage Loan; and
(v) The original or a copy of the title insurance policy
(which may be a certificate or a short form policy relating to a master
policy of title insurance) pertaining to the
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Mortgaged Property, or in the event such original title policy is
unavailable, a copy of the preliminary title report, if available, and
the lender's recording instructions, with the original or a copy to be
delivered within 365 days of the Closing Date or an attorney's opinion
of title in jurisdictions where such is the customary evidence of
title.
In instances where an original recorded Mortgage or power of
attorney cannot be delivered by the Depositor to the Trustee (or a custodian on
behalf of the Trustee) prior to or concurrently with the execution and delivery
of this Agreement, due to a delay in connection with the recording of such
Mortgage or power of attorney, the Depositor may, (a) in lieu of delivering such
original recorded Mortgage or power of attorney referred to in clause (ii)
above, deliver to the Trustee (or a custodian on behalf of the Trustee) a copy
thereof, provided that the Depositor certifies that the original Mortgage or
power of attorney has been delivered to a title insurance company for
recordation after receipt of its policy of title insurance or binder therefor
(which may be a certificate relating to a master policy of title insurance), and
(b) in lieu of delivering the completed Assignment in recordable form referred
to in clause (iii) above to the Trustee (or a custodian on behalf of the
Trustee), deliver such Assignment to the Trustee (or a custodian on behalf of
the Trustee) completed except for recording information. In all such instances,
the Depositor will deliver the original recorded Mortgage or power of attorney
and completed Assignment (if applicable) to the Trustee (or a custodian on
behalf of the Trustee) promptly upon receipt of such Mortgage or power of
attorney.
In instances where an original recorded Mortgage or power of
attorney has been lost or misplaced, the Depositor or the related title
insurance company may deliver, in lieu of such Mortgage or power of attorney, a
copy of such Mortgage or power of attorney bearing recordation information and
certified as true and correct by the office in which recordation thereof was
made.
In instances where the original or a copy of the title
insurance policy referred to in clause (v) above (which may be a certificate
relating to a master policy of title insurance) pertaining to the Mortgaged
Property relating to a Mortgage Loan cannot be delivered by the Depositor to the
Trustee (or a custodian on behalf of the Trustee) prior to or concurrently with
the execution and delivery of this Agreement because such policy is not yet
available, the Depositor may, in lieu of delivering the original or a copy of
such title insurance, deliver to the Trustee (or a custodian on behalf of the
Trustee) a binder, if available, with respect to such policy (which may be a
certificate relating to a master policy of title insurance) and deliver the
original or a copy of such policy (which may be a certificate relating to a
master policy of title insurance) to the Trustee (or a custodian on behalf of
the Trustee) within 365 days of the Closing Date. In instances where an original
assumption, modification or buydown agreement referred to in clause (iv) above
cannot be delivered by the Depositor to the Trustee (or a custodian on behalf of
the Trustee) prior to or concurrently with the execution and delivery of this
Agreement, the Depositor may, in lieu of delivering the original of such
agreement, deliver a certified copy thereof.
To the extent not already recorded, the Master Servicer, at
the expense of the Seller shall promptly (and in no event later than five
Business Days following the later of (i) the Closing Date and (ii) 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 REMIC I, in the
appropriate public office for real property records, each Assignment delivered
to it pursuant to (iii) above. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Master
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Servicer, at the expense of the Seller, 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, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments shall
not be required to be submitted for recording (except with respect to any
Mortgage Loan located in Florida and Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided, however, the Trustee shall enforce the
obligation of the Seller under the Mortgage Loan Purchase Agreement to submit
each Assignment for recording, at the Seller's expense, upon the Trustee gaining
actual knowledge of the earliest to occur of: (i) reasonable direction by
Holders of Certificates entitled to at least 25% of the Voting Rights, (ii) the
occurrence of a Master Servicer Event of Default, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 of this
Agreement and (v) with respect to any one Assignment the occurrence of a
foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Seller fails to pay the cost of recording
the Assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expense as an Extraordinary Trust Fund Expense.
With respect to a maximum of approximately 4.00% of the
original Mortgage Loans, by outstanding principal balance of the original
Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to
in (i) above cannot be located, the obligations of the Depositor to deliver such
documents shall be deemed to be satisfied upon delivery to the Trustee of a lost
note affidavit including an indemnity substantially in the form agreed to
between the Trustee and the Custodian and a photocopy of the related Mortgage
Note; provided, however, that the Depositor may deliver a lost note affidavit
for up to 2.00% of the original Mortgage Loans, by outstanding principal balance
of the original Mortgage Loans as of the Cut-off Date, without attaching a
photocopy of the related Mortgage Note thereto. If any of the original Mortgage
Notes for which a lost note affidavit (including an indemnity) and photocopy
were delivered to the Trustee is subsequently located, such original Mortgage
Note shall be delivered to the Trustee within ten Business Days.
The Depositor shall deliver or cause to be delivered to the
Trustee (or a 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, modification, consolidation or extension of
any Mortgage Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee (or a custodian on behalf of the Trustee) are and
shall be held by or on behalf of 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 a 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.
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Wherever it is provided in this Section 2.01 that any
document, evidence or information relating to a Mortgage Loan be delivered or
supplied to the Trustee, the Depositor shall do so by delivery thereof to the
Trustee (or a custodian on behalf of the Trustee).
Notwithstanding the foregoing, the parties hereto acknowledge
that on or before the Closing Date, the Depositor will deliver to, and deposit
with, the Trustee (or a custodian on behalf of the Trustee), the Mortgage Notes
as required under Section 2.01(a)(i) above and will retain the remaining
contents of each Mortgage File as set forth in Section 2.01(b). The provisions
set forth in this Section 2.01(a) which obligate the Trustee, or the Custodian
on behalf of the Trustee, with respect to the Mortgage Files shall apply to, and
be performed by, the Seller with respect to the contents of each Mortgage File
retained by the Seller.
(b) As set forth in Section 2.01(a) above, the Mortgage Note
shall be the only portion of the Mortgage File that shall be delivered by the
Depositor to the Trustee, or the Custodian on behalf of the Trustee, on or
before the Closing Date. The portion of the Mortgage File constituting items
(ii) through (v) of Section 2.01(a) above (the "Remaining Mortgage File") shall
not be delivered to the Trustee, or the Custodian on behalf of the Trustee, and
shall be retained by the Seller.
If at any time either (a) the short-term senior unsecured debt
rating of the Seller by Fitch is reduced below "F1" or (b) the long-term senior
unsecured debt obligations of the Seller are downgraded below a rating of "A-"
by Fitch (either (a) or (b), a "Seller Downgrade Event") shall occur, the
Seller, at its own expense, shall within 15 days (the "Remaining Mortgage File
Transfer Date") deliver to, and deposit with, the Trustee or the Custodian on
behalf of the Trustee, the Remaining Mortgage File with respect to each Mortgage
Loan in accordance with the provisions of Section 2.01(a), to the extent still
applicable. Notwithstanding the foregoing, if the Seller fails to pay the cost
of recording the Assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expense as an Extraordinary Trust Fund
Expense.
So long as the Seller is an affiliate of the Master Servicer,
upon the occurrence of a Seller Downgrade Event, the failure of the Seller to
deliver to, and deposit with, the Trustee or the Custodian on behalf of the
Trustee, the Remaining Mortgage File with respect to each Mortgage Loan by the
Remaining Mortgage File Transfer Date shall constitute a Master Servicer Event
of Default pursuant to Section 7.01.
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 an exception report delivered by or on behalf of the
Trustee, the Trustee acknowledges receipt of the documents referred to in
Section 2.01 (other than such documents described in Sections 2.01(v) above and
all other assets included in the definition of "REMIC I" to the extent of
amounts deposited into the Distribution Account) and declares that it holds and
will hold such documents and the other documents delivered to it constituting
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.
65
On or prior to the Closing Date, the Trustee or the Custodian
on behalf of the Trustee agrees, for the benefit of the Certificateholders, to
execute and deliver to the Depositor and the Master Servicer an acknowledgment
of receipt of the Mortgage Notes (with any exceptions noted), substantially in
the form attached as Exhibit C-1 hereto.
The Trustee, or the Custodian on behalf of the Trustee,
further agrees, for the benefit of the Certificateholders, to certify in
substantially the form attached hereto as Exhibit C-2, within 30 days following
the Remaining Mortgage File Transfer Date, with respect to each Mortgage Loan
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 required to be delivered to it pursuant to
Section 2.01(a) of this Agreement are in its possession, (ii) such documents
have been reviewed by it and have not been mutilated, damaged or torn 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), (ii), (xi) and (xiv) of the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File. Notwithstanding
the foregoing if the Remaining Mortgage File Transfer Date occurs within one
year of the Closing Date, the Trustee, or the Custodian on behalf of the
Trustee, shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-3 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon. It is herein acknowledged that, in conducting such review, the Trustee
is under no duty or obligation 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.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
The Trustee may, concurrently with the execution and delivery
hereof or at any time thereafter, enter into a custodial agreement with a
custodian pursuant to which the Trustee appoints a custodian to hold the
Mortgage Files on behalf of the Trustee for the benefit of all present and
future Certificateholders, which may provide that the custodian shall, on behalf
of the Trustee, and as the Trustee's agent, conduct the review of each Mortgage
File required under the first paragraph of this Section 2.02, provided that, if
the custodian so appointed is the Depositor or an Affiliate of the Depositor,
the Trustee shall conduct such review.
SECTION 2.03. Repurchase or Substitution of
Mortgage Loans by the Seller or the
Depositor.
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(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by 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, the Trustee shall promptly notify the Seller
and the Master Servicer of such defect, missing document or breach and request
that the Seller deliver such missing document or cure such defect or breach
within 60 days from the date the Seller was notified of such missing document,
defect or breach, and if the Seller does not deliver such missing document or
cure such defect or breach in all material respects during such period, the
Master Servicer shall enforce the obligations of the Seller under the Mortgage
Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I at the
Purchase Price within 60 days after the date on which the Seller was notified
(subject to Section 2.03(e)) of such missing document, defect or breach, if and
to the extent that the Seller is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
furnish to it and as shall be necessary to vest in the Seller 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 Seller 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 Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as
to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or breach available
to the Trustee on behalf of the Certificateholders.
(b) Reserved.
(c) Within 60 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
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) 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 Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the 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
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with such substitution. 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. 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 month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Trustee shall give or cause to be given written notice to the Certificateholders
that such substitution has taken place and the Seller shall amend the Mortgage
Loan Schedule or cause the Mortgage Loan Schedule to be amended to reflect the
removal of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Mortgage Loan Purchase Agreement, including all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement.
For any month in which 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 Seller will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans
and certification by the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on REMIC I,
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) REMIC I to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
(e) Upon discovery by the Depositor, 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 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
60 days of the earlier of discovery or receipt of such notice with respect to
such affected Mortgage Loan. Such repurchase or substitution shall
68
be made by (i) the Seller, 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 Seller 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 no representation or warranty. Any such
repurchase or substitution shall be made in the same manner as set forth in
Sections 2.03(a). The Trustee shall reconvey to the Depositor 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. Reserved.
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 national bank duly organized,
validly existing and in good standing under the laws of the United
States and is duly authorized and qualified (or a Sub-Servicer on
behalf of the Master Servicer 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 (or such Sub-Servicer is) otherwise not
required under applicable law to effect such qualification and, in any
event, is (or such Sub-Servicer 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 other parties
hereto, 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
69
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 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 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; and
(vii) The Master Servicer covenants that its computer and
other systems used in servicing the Mortgage Loans operate in a manner
such that the Master Servicer can service the Mortgage Loans in
accordance with the terms of this Agreement.
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 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 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.
SECTION 2.06. Issuance of the Certificates.
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The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it 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, REMIC II and REMIC III delivered on the date hereof,
receipt of which is hereby acknowledged. Concurrently with such assignment and
delivery of such assets delivered on the date hereof 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 Certificates in authorized denominations. The
interests evidenced by the Certificates constitute the entire beneficial
ownership interest in REMIC III.
SECTION 2.07. Conveyance of the REMIC I Regular
Interests and 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 I Regular Interests and REMIC II Regular Interests for the
benefit of the Class R Certificateholders (as holder of the Class R-I
Certificate, Class R-II Certificate and Class R-III Certificate) and REMIC III
(as holder of the REMIC I Regular Interests and REMIC II Regular Interests). The
Trustee acknowledges receipt of the REMIC I Regular Interests and REMIC II
Regular Interest 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
Certificateholders (as holder of the Class R-I Certificate, Class R-II
Certificate and Class R-III Certificate) and REMIC III (as holder of the REMIC I
Regular Interests and REMIC II Regular Interests). The rights of the Class R
Certificateholders (as holder of the Class R-I Certificate, Class R-II
Certificate and Class R-III Certificate) and REMIC III (as holder of the REMIC I
Regular Interest and REMIC II Regular Interests) to receive distributions from
the proceeds of REMIC III in respect of the Class R-III Certificate and REMIC
III Regular Interests, respectively, and all ownership interests evidenced or
constituted by the Class R-III Certificate and the REMIC I Regular Interests and
REMIC II Regular Interests, shall be as set forth in this Agreement.
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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 each
Primary Mortgage Insurance Policy and any standard hazard insurance policy.
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Subject to Section 3.17, the Trustee shall execute, at the written request of
the Master Servicer any documents and powers of attorney furnished to it by the
Master Servicer and any sub-servicer 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.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall, following consultation with the related Mortgagor,
advance or cause to be advanced funds as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties 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, 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 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
REMIC I or REMIC II 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."
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 the Rating Agencies of the rating 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-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts of
which are insured by the FDIC and
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(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.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans
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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, 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 the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of
Sub-Servicing Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or
75
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, the terms and provisions of any related Primary Mortgage Insurance
Policy and 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, only upon determining that the coverage of such
Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not
be affected, or (ii) extend the due dates for 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 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 and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account(s) 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 two Business Days 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 one Business Day after the deposit of such funds into the clearing
account(s). The Sub-Servicer shall thereafter deposit such
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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 may establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, primary mortgage insurance premiums, fire and hazard
insurance premiums, water charges, sewer rents and comparable items for the
account of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts; provided, however, that Servicing
Accounts need only be established and maintained by the Master Servicer to the
extent that it is collecting Escrow Payments from the Mortgagors. The Master
Servicer shall deposit in the clearing account(s) 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
two Business Days after the Master Servicer's receipt thereof, all 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 one
Business Day after the deposit of such funds in the clearing account(s), 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 Escrow Payments; (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 or the related Mortgage Note 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.
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"), which initially shall be
77
located at National Bank of Commerce, held in trust for the benefit of the
Trustee and the Certificateholders and in the name of the Trustee. On behalf of
the Trust Fund, the Master Servicer shall deposit or cause to be deposited in
the clearing account(s) 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 two Business Days after
the Master Servicer's receipt thereof, and shall thereafter deposit in the
Collection Account, in no event more than one Business Day after the deposit of
such funds into the clearing account(s), as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it from and after the Cut-off Date (other than in respect of principal or
interest on the related Mortgage Loans due on or before the Cut-off Date), or
payments (other than Principal Prepayments) received by it on or prior to the
Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid by the Master Servicer in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 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) without duplication, all proceeds of any Mortgage Loan
repurchased or purchased in accordance with Section 2.03 or Section
9.01; and
(vii) without duplication, all amounts required to be
deposited in connection with shortfalls in principal amount of
Qualified Substitute Mortgage Loans pursuant to Section 2.03.
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 or assumption fees need not be deposited by the Master Servicer in the
Collection Account. 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.
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(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 Trustee and 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 12:00 p.m. New York City time (i) on the
Master Servicer Remittance Date, that portion of the Group I/IV Available
Distribution Amount and Group V 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 (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 12:00 p.m. New York City 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 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 upon written notification from the Master Servicer, 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;
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(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfalls; and
(v) [reserved].
(e) [Reserved].
(f) 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.
(g) If, as of the date set forth in the foregoing paragraphs,
the Master Servicer fails to remit any amount it is required to remit to the
Trustee hereunder, the Master Servicer shall pay the Trustee, for its own
account, interest on such late payment at the prime rate as set forth in the
Wall Street Journal or similar publication from the time such payment was
required to be made (without regard to any grace period) until such late payment
is received by the Trustee.
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 (A) any unpaid Servicing Fees, (B) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Liquidation Proceeds, Insurance Proceeds or
other amounts as may be collected by the Master Servicer from a
Mortgagor, or otherwise received with respect to such Mortgage Loan and
(C) any nonrecoverable Servicing Advances following the final
liquidation of a Mortgage Loan, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Master
Servicer or any Sub-Servicer for such Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation
(in addition to the Servicing Fees) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited in the
Collection Account;
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(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 (if the Trustee is not the Master
Servicer) amounts to which it is entitled pursuant to Section 8.05 and
any other Extraordinary Trust Fund Expenses;
(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 Sections 7.01 and 7.02;
(v) to pay any amounts in respect of taxes pursuant to
10.01(g)(iv);
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(vi) [reserved];
(vii) to reimburse itself for any P&I Advance made by it under
Section 7.01 (if not reimbursed by the Master Servicer) to the same
extent the Master Servicer would be entitled to reimbursement under
Section 3.11(a); and
(viii) to clear and terminate the Distribution Account
pursuant to Section 9.01.
SECTION 3.12. Investment of Funds in the
Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee shall direct any depository institution
maintaining the Distribution Account (for purposes of this Section 3.12, also an
"Investment Account"), to invest the funds in such Investment Account in one or
more Permitted Investments specified in such instruction 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 or an affiliate is the obligor, manager or advisor
thereon. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee (in its capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall be entitled to sole possession (except
with respect to investment direction of funds held in the Collection Account and
any income 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 Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.
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(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 remit to the Distribution Account the amount of any loss
of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
SECTION 3.13. Maintenance of the Primary Mortgage
Insurance Policies; Collections
Thereunder.
The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreement and to the extent available, a Primary
Mortgage Insurance Policy with respect to each Mortgage Loan so insured as of
the Closing Date (or, in the case of a Qualified Substitute Mortgage Loan, on
the date of substitution). Such coverage will be maintained with respect to each
such Mortgage Loan for so long as it is outstanding, subject to any applicable
laws or until the related Loan-to-Value Ratio is reduced to less than or equal
to 80% based on Mortgagor payments. The Master Servicer shall cause the premium
for each Primary Mortgage Insurance Policy to be paid on a timely basis and
shall pay such premium out of its own funds if it is not otherwise paid. The
Master Servicer or the related Sub- Servicer, if any, will not cancel or refuse
to renew any such Primary Mortgage Insurance Policy in effect on the Closing
Date (or, in the case of a Qualified Substitute Mortgage Loan, on the date of
substitution) that is required to be kept in force under this Agreement unless a
replacement Primary Mortgage Insurance Policy for such canceled or non-renewed
policy is obtained from and maintained with a Qualified Insurer.
The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Mortgage Insurance
Policy. In connection with any assumption and modification agreement or
substitution of liability agreement entered into or to be entered into pursuant
to Section 3.15, the Master Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage under
the Primary Mortgage Insurance Policy. If any such Primary Mortgage Insurance
Policy is terminated as a result of such assumption, the Master Servicer or the
related Sub-Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
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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 the Certificateholders, claims to
the insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by
the Master Servicer under any Primary Mortgage Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11; and any amounts collected by the Master Servicer under any Primary
Mortgage Insurance Policy in respect of any REO Property shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 3.23. In those
cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer,
on behalf of itself, the Trustee, and the Certificateholders, will present
claims to the insurer under any Primary Mortgage Insurance Policy and all
collections thereunder shall be deposited initially in the Sub-Servicing
Account.
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 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.
Except with respect to any Mortgage Loan with a Principal Balance in excess of
$1,000,000 which is located in California, 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
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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 or REO
Properties, 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 the
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 would meet the requirements of Xxxxxx Xxx or
Xxxxxxx Mac if it were the purchaser of the Mortgage Loans, other than the
amount of the deductible, unless or to the extent that 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 that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac, other than the amount of the
deductible, 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.
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. If the Master
Servicer
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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. 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 Section 3.14 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 that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage
Loans.
(a) The Master Servicer shall, 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 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
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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, the Master Servicer 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 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of 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.
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(c) [Reserved].
(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)(B);
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)(A).
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 (or a custodian on its behalf) by a 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 a custodian on its behalf) 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.
The Trustee (or a custodian on its behalf) 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.
(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 (or a custodian
on its behalf) shall, upon request of the Master Servicer and delivery to the
Trustee (or a custodian on its behalf) 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. 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 a custodian on
its behalf) when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account or
the Mortgage File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing
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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 (or a custodian on its behalf) 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 a custodian on its behalf) 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.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the related Servicing Fee
with respect to each Group I/IV Mortgage Loan or Group V Mortgage Loan, as
applicable, 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)(A) 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 Fees 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, prepayment charges and other similar fees and
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 and servicing compensation of
each Sub-Servicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
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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, upon the request of the Trustee, a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on the last day of the calendar
month relating to 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 the request and 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 the Rating Agencies (in electronic format) on or before March 15th of each
calendar year commencing in 2004, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon 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 March 15th of each calendar year commencing in
2004, 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
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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 in electronic format to the Trustee and the Rating Agencies.
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 the
Controller of the Currency, 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
required by applicable laws and regulations will be provided to such
Certificateholder, the Trustee and to any Person identified to the Master
Servicer as a prospective transferee of a Certificate, upon reasonable request
during normal business hours at the offices of the Master Servicer designated by
it at the expense of the Person requesting such access.
SECTION 3.23. Title, Management and Disposition of
REO Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund and
consistent with the servicing standard set forth in Section 3.01, shall either
sell any REO Property before the close of the third taxable year following the
year the Trust Fund acquires ownership of such REO Property for purposes of
Section 860G(a)(8) of the Code or request from the Internal Revenue Service, 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 the Trust Fund of such REO Property subsequent to three years after
its acquisition will not result in the imposition on REMIC I or REMIC II of
taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause REMIC I or REMIC II to fail to qualify as a REMIC under Federal
law at any time that any Certificates are outstanding. The Master Servicer
shall, consistent with the servicing standard set forth in Section 3.01, 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 or REMIC II 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.
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(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 servicing standard set forth in Section 3.01 and 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(s) 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 two Business Days after
the Master Servicer's receipt thereof, and shall thereafter deposit in the REO
Account, in no event more than one Business Day after the deposit of such funds
into the clearing account(s), all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall, consistent with the servicing standard set forth in Section
3.01, 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, none of the Master Servicer or
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;
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(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 the Trust Fund, in which case the
Master Servicer may take such actions as are specified in such Opinion
of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its
duties and obligations to the 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:
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(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. Any income from the related REO Property
received during any calendar months prior to a Final Recovery Determination, net
of any withdrawals made pursuant to Section 3.23(c) or this Section 3.23(d),
shall be withdrawn by the Master Servicer from each REO Account maintained by it
and deposited into the Distribution Account in accordance with Section
3.10(d)(ii) on the Master Servicer Remittance Date relating to a Final Recovery
Determination with respect to such Mortgage Loan, for distribution on the
related Distribution Date in accordance with Section 4.01.
(e) Subject to the time constraints set forth in Section
3.23(a) and consistent with the servicing standard set forth in Section 3.01,
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).
(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 12:00 p.m. New York City 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 from full or partial Principal Prepayments during
the related Prepayment Period and (ii) the amount of its aggregate Servicing
Fees for the most recently ended calendar month.
SECTION 3.25. Obligations of the Master Servicer
in Respect of 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 Stated Principal Balances that were
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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.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a)(1) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the sum of the Group I
Available Distribution Amount, the Group II Available Distribution Amount, the
Group III Available Distribution Amount and the Group IV Available Distribution
Amount and distribute the following amounts, in the following order of priority:
(i) concurrently, to distributions of interest in respect of
the Class AV Certificates, on a PRO RATA basis based on the entitlement
of each such Class, in an amount equal to the Group I/IV Senior
Interest Distribution Amount in respect of such Certificates for such
Distribution Date;
(ii) on the first Distribution Date, to the extent of the
Group I/IV Senior Principal Distribution Amount, to distributions of
principal to the Class R-I Certificates, until the Certificate
Principal Balance of the Class R-I Certificates has been reduced to
zero;
(iii) to the extent of the Group I/IV Senior Principal
Distribution Amount, to distributions of principal to the Class AV
Certificates (applied to reduce the Certificate Principal Balance of
such Certificates), until the Certificate Principal Balance of the
Class AV Certificates has been reduced to zero;
(iv) to distributions of interest in respect of the Group I/IV
Subordinate Certificates, in an amount (allocable among such
Certificates PRO RATA in accordance with the respective amounts payable
as to each pursuant to this clause (iii), in the order of priority from
the Class of Group I/IV Subordinate Certificates with the lowest
numerical designation to the Class of Group I/IV Subordinate
Certificates with the highest numerical designation entitled to a
distribution of interest pursuant to this clause (iii)) equal to the
aggregate of the Group V Senior Interest Distribution Amounts in
respect of such Certificates for such Distribution Date;
(v) to the Holders of the Classes of the Group I/IV
Subordinate Certificates, an aggregate amount equal to the Group I/IV
Subordinate Principal Distribution Amount for such Distribution Date
(applied to reduce the Certificate Principal Balances of such
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Certificates), allocable among the Classes of Group I/IV Subordinate
Certificates PRO RATA in accordance with the respective amounts payable
as to each such Class pursuant to the priorities and amounts set forth
in Section 4.01(b)(i);
(vi) to the related Excess Diverted Interest Reserve Account,
the Excess Diverted Interest Reserve Amount, if any, and
(vii) to the Holders of the Class R Certificates, any
remaining amounts.
(2) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the sum of the Group V Available
Distribution Amount and distribute:
(i) concurrently, to distributions of interest in respect of
the Class AF Certificates and the Class IO Certificates, in an amount
(allocable among such Certificates PRO RATA in accordance with the
respective amounts payable as to each pursuant to this clause (i))
equal to the aggregate of the Group V Senior Interest Distribution
Amounts in respect of such Certificates for such Distribution Date;
(ii) to the extent of the Class PO Principal Distribution
Amount, to distributions of principal to the Class PO Certificates
(applied to reduce the Certificate Principal Balances of such
Certificates), until the Certificate Principal Balance of such Class
has been reduced to zero;
(iii) on the first Distribution Date, to the extent of the
Group V Senior Principal Distribution Amount, to distributions of
principal to the Class R-II Certificates, until the Certificate
Principal Balance of the Class R-II Certificates has been reduced to
zero;
(iv) to the extent of the Group V Senior Principal
Distribution Amount, to distributions of principal to the Class AF
Certificates (applied to reduce the Certificate Principal Balance of
such Certificates), until the Certificate Principal Balance of each
Class of the Group V Senior Certificates has been reduced to zero;
(v) to distributions of interest in respect of the Group V
Subordinate Certificates, other than the Class of Group V Subordinate
Certificates with the highest numerical designation then outstanding,
in an amount (allocable among such Certificates PRO RATA in accordance
with the respective amounts payable as to each pursuant to this clause
(iv), in the order of priority from the Class of Group V Subordinate
Certificates with the lowest numerical designation to the Class of
Group V Subordinate Certificates with the highest numerical designation
entitled to a distribution of interest pursuant to this clause (iv))
equal to the aggregate of the Group V Senior Interest Distribution
Amounts in respect of such Certificates for such Distribution Date;
(vi) to distributions of principal to the Class PO
Certificates (applied to reduce the Certificate Principal Balance of
such Certificates) in an amount equal to the excess, if any, of the
Class PO Percentage of the Stated Principal Balance of each Class PO
Mortgage Loan
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as to which a Final Liquidation has occurred, over the amount
distributed in respect of such Class PO Mortgage Loan to the Class PO
Certificates pursuant to clause (ii) above;
(vii) to distributions in respect of the Class of Group V
Subordinate Certificates with the highest numerical designation then
outstanding, in an amount equal to the Grou V Senior Interest
Distribution Amount in respect of such Certificates for such
Distribution Date;
(viii) to the Holders of the Classes of the Group V
Subordinate Certificates, an aggregate amount equal to the Group V
Subordinate Principal Distribution Amount for such Distribution Date
(applied to reduce the Certificate Principal Balances of such
Certificates), allocable among the Classes of Group V Subordinate
Certificates PRO RATA in accordance with the respective amounts payable
as to each such Class pursuant to the priorities and amounts set forth
in Section 4.01(c)(i); and
(ix) to the Holders of the Class R Certificates, any remaining
amounts.
(3) All references above to the Certificate Principal Balance
of any Class of Certificates shall be to the Certificate Principal Balance of
such Class prior to the allocation of Extraordinary Trust Fund Expenses and
Realized Losses, in each case allocated to such Class of Certificates, on such
Distribution Date pursuant to Section 4.04.
(b)(i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Group I/IV Subordinate
Certificates pursuant to Section 4.01(a)(1)(iv) above shall be applied among the
various Classes thereof, in the order of priority from the Class of Group I/IV
Subordinate Certificates with the lowest numerical designation to the Class of
Group I/IV Subordinate Certificates with the highest numerical designation, in
each case to the extent of remaining available funds up to the amount allocable
to such Class for such Distribution Date and in each case until the Certificate
Principal Balance of each such Class is reduced to zero, in an amount with
respect to each such Class equal to the sum of (X) the related Class B
Percentage of the amounts described in clauses (i) through (v) of clause (a) of
the definition of Group I/IV Subordinate Principal Distribution Amount, (Y) the
portion of the amounts described in clauses (b) and (c) of the definition of
Group I/IV Subordinate Principal Distribution Amount allocable to such Class
pursuant to Section 4.01(b)(ii) below and (Z) the excess, if any, of the amount
required to be distributed to such Class pursuant to this Section 4.01(b)(i) for
the immediately preceding Distribution Date, over the aggregate distributions of
principal made in respect of such Class of Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that any such
excess is not attributable to Realized Losses which were allocated to Group I/IV
Subordinate Certificates with a lower priority pursuant to Section 4.04.
(ii) On any Distribution Date, the portion of (a) all net
Liquidation Proceeds and Insurance Proceeds with respect to any Group I/IV
Mortgage Loans that were the subject of a Final Recovery Determination in the
related Prepayment Period and (b) all Principal Prepayments received in respect
of the Group I/IV Mortgage Loans in the related Prepayment Period, allocable to
principal and not included in the Group I/IV Senior Principal Distribution
Amount, will be allocated on a PRO RATA basis among the following Classes of
Group I/IV Subordinate Certificates (each, a "Group I/IV
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Eligible Class") in proportion to the respective outstanding Certificate
Principal Balances thereof: (i) the Class BV-1 Certificates, (ii) the Class BV-2
Certificates, if on such Distribution Date the aggregate percentage interest in
the Trust Fund evidenced by the Class BV-2 Certificates, the Class BV-3
Certificates, the Class BV-4 Certificates, the Class BV-5 Certificates and the
Class BV-6 Certificates equals or exceeds 7.25% before giving effect to
distributions on such Distribution Date, (iii) the Class BV-3 Certificates, if
on such Distribution Date the aggregate percentage interest in the Trust Fund
evidenced by the Class BV-3 Certificates, the Class BV-4 Certificates, the Class
BV-5 Certificates and the Class BV-6 Certificates equals or exceeds 5.00% before
giving effect to distributions on such Distribution Date, (iv) the Class BV-4
Certificates, if on such Distribution Date the aggregate percentage interest in
the Trust Fund evidenced by the Class BV-4 Certificates, the Class BV-5
Certificates and the Class BV-6 Certificates equals or exceeds 3.30% before
giving effect to distributions on such Distribution Date, (v) the Class BV-5
Certificates, if on such Distribution Date the aggregate percentage interest in
the Trust Fund evidenced by the Class BV-5 Certificates and the Class BV-6
Certificates equals or exceeds 2.10% before giving effect to distributions on
such Distribution Date and (vi) the Class BV-6 Certificates, if on such
Distribution Date the percentage interest in the Trust Fund evidenced by the
Class BV-6 Certificates equals or exceeds 1.15% before giving effect to
distributions on such Distribution Date. Notwithstanding the foregoing, if the
application of the foregoing on any Distribution Date as provided in Section
4.01 would result in a distribution in respect of principal to any Class or
Classes of Group I/IV Subordinate Certificates in an amount greater than the
remaining Certificate Principal Balance thereof (any such Class, a "Group I/IV
Maturing Class") then: (a) the amount to be allocated to each Group I/IV
Maturing Class shall be reduced to a level that, when applied as described
above, would exactly reduce the Certificate Principal Balance of such Class to
zero and (b) the total amount of the reductions pursuant to clause (a) above in
the amount to be allocated to the Group I/IV Maturing Class or Classes shall be
allocated among the remaining Group I/IV Eligible Classes on a PRO RATA basis in
proportion to the respective outstanding Certificate Principal Balances thereof
prior to the allocation thereto of any of the amounts described in the preceding
sentence. Furthermore, if a Class of Class B Certificates is not a Group I/IV
Eligible Class, any amounts allocable to principal and distributable pursuant to
this Section 4.01(b)(ii) will be distributed among the Class B Certificates that
are Group I/IV Eligible Classes in the manner set forth above.
(c) (i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Group V Subordinate
Certificates pursuant to Section 4.01(a)(2) (vii) above shall be applied among
the various Classes thereof, in the order of priority from the Class of Group V
Subordinate Certificates with the lowest numerical designation to the Class of
Group V Subordinate Certificates with the highest numerical designation, in each
case to the extent of remaining available funds up to the amount allocable to
such Class for such Distribution Date and in each case until the Certificate
Principal Balance of each such Class is reduced to zero, in an amount with
respect to each such Class equal to the sum of (X) the related Class B
Percentage of the amounts described in clauses (i) through (v) of clause (a) of
the definition of Group V Subordinate Principal Distribution Amount, (Y) the
portion of the amounts described in clauses (b) and (c) of the definition of
Group V Subordinate Principal Distribution Amount allocable to such Class
pursuant to Section 4.01(c)(ii) below and (Z) the excess, if any, of the amount
required to be distributed to such Class pursuant to this Section 4.01(c)(i) for
the immediately preceding Distribution Date, over the aggregate distributions of
principal made in respect of such Class of Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that any such
excess
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is not attributable to Realized Losses which were allocated to Group V
Subordinate Certificates with a lower priority pursuant to Section 4.04.
(ii) On any Distribution Date, with respect to the Group V
Mortgage Loans, the portion of (a) all net Liquidation Proceeds and Insurance
Proceeds with respect to any Group V Mortgage Loans that were the subject of a
Final Recovery Determination in the related Prepayment Period and (b) all
Principal Prepayments received in respect of the Group V Mortgage Loans in the
related Prepayment Period, allocable to principal and not included in the Group
V Senior Principal Distribution Amount and the Class PO Principal Distribution
Amount, will be allocated on a PRO RATA basis among the following Classes of
Group V Subordinate Certificates (each, a "Group V Eligible Class") in
proportion to the respective outstanding Certificate Principal Balances thereof:
(i) the Class BF-1 Certificates, (ii) the Class BF-2 Certificates, if on such
Distribution Date the aggregate percentage interest in the Loan Group V
evidenced by the Class BF-2 Certificates, the Class BF-3 Certificates, the Class
BF-4 Certificates, the Class BF-5 Certificates and the Class BF-6 Certificates
equal or exceeds 4.00% before giving effect to distributions on such
Distribution Date, (iii) the Class BF-3 Certificates, if on such Distribution
Date the aggregate percentage interest in Loan Group V evidenced by the Class
BF-3 Certificates, the Class BF-4 Certificates, the Class BF-5 Certificates and
the Class BF-6 Certificates equal or exceeds 2.60% before giving effect to
distributions on such Distribution Date, (iv) the Class BF-4 Certificates, if on
such Distribution Date the aggregate percentage interest in Loan Group V
evidenced by the Class BF-4 Certificates, the Class BF-5 Certificates and the
Class BF-6 Certificates equal or exceeds 1.75% before giving effect to
distributions on such Distribution Date, (v) the Class BF-5 Certificates, if on
such Distribution Date the aggregate percentage interest in Loan Group V
evidenced by the Class BF-5 Certificates and the Class BF-6 Certificates equal
or exceeds 1.15% before giving effect to distributions on such Distribution Date
and (vi) the Class BF-6 Certificates, if on such Distribution Date the
percentage interest in Loan Group V evidenced by the Class BF-6 Certificates
equals or exceeds 0.75% before giving effect to distributions on such
Distribution Date. Notwithstanding the foregoing, if the application of the
foregoing on any Distribution Date as provided in Section 4.01 would result in a
distribution in respect of principal to any Class or Classes of Group V
Subordinate Certificates in an amount greater than the remaining Certificate
Principal Balance thereof (any such Class, a "Group V Maturing Class") then: (a)
the amount to be allocated to each Group V Maturing Class shall be reduced to a
level that, when applied as described above, would exactly reduce the
Certificate Principal Balance of such Class to zero and (b) the total amount of
the reductions pursuant to clause (a) above in the amount to be allocated to the
Group V Maturing Class or Classes shall be allocated among the remaining Group V
Eligible Classes on a PRO RATA basis in proportion to the respective outstanding
Certificate Principal Balances thereof prior to the allocation thereto of any of
the amounts described in the preceding sentence.
(d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(f) or
Section 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
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so notified the Trustee in writing at least five Business Days prior to the
Record Date immediately prior to such Distribution Date and with respect to any
Class of Certificates other than the Residual Certificates 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 Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee or the
Master Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(f) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five days after the related Determination Date, mail on such date to
each Holder 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(f) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates
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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 and 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(f).
(g) Notwithstanding anything contained in this Section 4.01 to
the contrary, (i) on or after any Distribution Date on which Realized Losses
have been allocated to the Class BV-5 Certificates, amounts of principal and
interest distributable on such Distribution Date to the Class BF-6 Certificates,
shall be distributed to the Class BV-5 Certificates, to the extent available, up
to the amount of such Realized Losses, and (ii) on or after any Distribution
Date on which Realized Losses have been allocated to any Class of Group I/IV
Certificates, other than the Class BV-5 and BV-6 Certificates, amounts
distributable to the Class BF-5 and BF-6 Certificates, shall be distributed to
such Group I/IV Certificates, to the extent available, up to the amount of such
Realized Losses. To the extent that distributions of principal and interest on
such Distribution Date on the Class BF-5 and Class BF-6 Certificates are
insufficient to reimburse the related Realized Losses, such insufficient amounts
shall be carried forward and remain reimbursable on future Distribution Dates
from future distributions of principal and interest on the Class BF-5 and Class
BF-6 Certificates.
Notwithstanding anything contained in this Section 4.01 to the
contrary, (i) on or after any Distribution Date on which Realized Losses have
been allocated to the Class BF-5 Certificates, amounts of principal and interest
distributable on such Distribution Date to the Class BV-6 Certificates, shall be
distributed to the Class BF-5 Certificates, to the extent available, up to the
amount of such Realized Losses, and (ii) on or after any Distribution Date on
which Realized Losses have been allocated to any Class of Group V Certificates,
other than the Class BF-5 and BF-6 Certificates, amounts distributable to the
Class BV-5 and BV-6 Certificates, shall be distributed to such Group V
Certificates, to the extent available, up to the amount of such Realized Losses.
To the extent that distributions of principal and interest on such Distribution
Date on the Class BV-5 and Class BV-6 Certificates are insufficient to reimburse
the related Realized Losses, such insufficient amounts shall be carried forward
and remain reimbursable on future Distribution Dates from future distributions
of principal and interest on the Class BV-5 and Class BV-6 Certificates.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, based solely on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available to each Holder of the Regular Certificates, the Master Servicer and
the Rating Agencies, a statement as to the distributions to be made on such
Distribution Date setting forth the following:
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(i) the amount of the distribution made on such Distribution
Date to the Holders of Certificates of each such Class allocable to
principal;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of Certificates of each such Class allocable to
interest;
(iii) the aggregate amount of servicing compensation 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 each Loan Group
for such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage
Loans and any REO Properties in each Loan Group at 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 in each Loan Group as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans in each Loan Group that are (a) delinquent 31 to 60
days, (b) delinquent 61 to 90 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 in any Loan Group
that was an REO Property at the close of business on the last day of
the the preceding calendar month, the number of such Mortgage Loans and
the unpaid principal balance of such Mortgage Loans;
(ix) [reserved];
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xi) the aggregate amount of Realized Losses with respect to
the Mortgage Loans in each Loan Group 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 Fraud Losses, Special Hazard
Losses or Bankruptcy Losses;
(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account or the Distribution
Account for such Distribution Date;
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(xiii) the aggregate Certificate Principal Balance or Notional
Amount of each such Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses and Extraordinary
Trust Fund Expenses, made on such Distribution Date;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of each such
Class of Certificates (other than the Class PO Certificates) for such
Distribution Date and the respective portions thereof, if any,
remaining unpaid following the distributions made in respect of such
Certificates on such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24;
(xvii) the aggregate amount of Relief Act Interest Shortfalls
for such Distribution Date;
(xviii) the then-applicable Group I/IV Bankruptcy Amount,
Group I Bankruptcy Amount, the Group I/IV Fraud Loss Amount, Group V
Fraud Loss Amount, Group I/IV Special Hazard Amount and the Group V
Special Hazard Amount;
(xix) [reserved];
(xx) [reserved]; and
(xxi) the Weighted Average Stripped Mortgage Rate with respect
to the Group V Mortgage Loans for such Distribution Date.
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.
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. The Trustee's internet website shall initially be
located at "xxx.xxxxxxx.xxx". Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution option 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. As a
condition to access the Trustee's internet website, the Trustee may require
registration and the acceptance of a disclaimer. The Trustee will not be liable
for the dissemination of information in accordance with this Agreement. The
Trustee shall also be entitled to rely on but shall not be responsible for the
content or accuracy of any information
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provided by third parties for purposes of preparing the distribution date
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party thereto).
Within a reasonable period of time after the end of each
calendar year, the Trustee shall forward to each Person, upon written request,
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.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall forward to each Person, upon written request,
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.
Upon request, the Trustee shall forward 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 Business Day following the Determination Date, the
Master Servicer shall deliver to the Trustee electronically a loan level file
(in such format 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, reasonably available to the
Master Servicer, 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
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Trustee shall not be responsible to recompute, recalculate or verify any
information provided to it by the Master Servicer.
(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 Due Period and as to which REO Property an REO Disposition did not occur
during the related Due Period, an amount equal to the excess, if any, of the REO
Imputed Interest on such REO Property for the most recently ended calendar
month, 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 12:00 p.m. New York City 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 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 Group I/IV Available
Distribution Amount and the Group V 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 the Master Servicer
Remittance Date in the event that the amount remitted by the Master Servicer to
the Trustee on such Master Servicer Remittance 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 or REMIC II 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
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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 Extraordinary Trust
Fund Expenses and Realized Losses.
(a) Prior to each Distribution 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 Fraud Losses or Special Hazard
Losses; and (iii) the respective portions of such Realized Losses allocable to
interest and allocable to principal. Prior to each Distribution 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.
(b) With respect to the REMIC I Regular Interests: all
Realized Losses on the Group I/IV Mortgage Loans shall be applied after all
distributions pursuant to Section 4.08 have been made on each Distribution Date
first, so as to keep the Uncertificated Balance of each REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group; second, to
each REMIC I Regular Interest ending with the designation "A," so that the
Uncertificated Balance of each such REMIC I Regular Interest is equal to 0.01%
of the excess of (x) the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the Certificate Principal Balance of
the Senior Certificates in the related Loan Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of Realized Losses shall be applied to such REMIC I Regular Interests
such that the REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining Realized Losses shall be allocated to REMIC I Regular Interest
LT-1/4ZZ;
With respect to REMIC II Regular Interests: all Realized
Losses on the Group V Mortgage Loans shall be applied after all distributions
pursuant to Section 4.08 have been made on each Distribution Date to REMIC II
Regular Interest LT-5 (except that if a Realized Loss is recognized with respect
to a Class PO Mortgage Loan, the Class PO Percentage of such Realized Loss will
be allocated to REMIC II Regular Interest LT-PO).
All Realized Losses on the Group I/IV Mortgage Loans (other
than Excess Losses) shall be allocated by the Trustee on each Distribution Date
as follows: first, to the Class BV-6 Certificates; second, to the Class BV-5
Certificates; third, to the Class BV-4 Certificates; fourth, to the Class BV-3
Certificates; fifth, to the Class BV-2 Certificates; and sixth, to the Class
BV-1 Certificates, in each case until the Certificate Principal Balance thereof
has been reduced to zero.
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Thereafter, upon the reduction of the Certificate Principal Balances of the
Group I/IV Subordinate Certificates to zero, all Realized Losses will be
allocated on any Distribution Date first, to any amounts on deposit in the
related Excess Diverted Interest Reserve Account and second, to the Class AV-1
Certificates, if the Realized Loss is on a Group I Mortgage Loan, to the Class
AV-2 Certificates, if the Realized Loss is on a Group II Mortgage Loan, to the
Class AV-3 Certificates, if the Realized Loss is on a Group III Mortgage Loan
and to the Class AV-4 Certificates, if the Realized Loss is on a Group IV
Mortgage Loan. If a Realized Loss is allocated to the Excess Diverted Interest
Reserve Account, the Trustee shall pay the Group I Excess Diverted Interest
Reserve Deposit, the Group II Excess Diverted Interest Reserve Deposit, the
Group III Excess Diverted Interest Reserve Deposit or the Group IV Excess
Diverted Interest Reserve Deposit, as applicable, to the Group I/IV Available
Distribution Amount to which the Realized Loss relates.
All Realized Losses on the Group V Mortgage Loans (other than
Excess Losses) shall be allocated by the Trustee on each Distribution Date as
follows: first, to the Class BF-6 Certificates; second, to the Class BF-5
Certificates; third, to the Class BF-4 Certificates; fourth, to the Class BF-3
Certificates; fifth, to the Class BF-2 Certificates; and sixth, to the Class
BF-1 Certificates, in each case until the Certificate Principal Balance thereof
has been reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balances of the Group V Subordinate Certificates to zero, if Realized
Losses are on a Class IO Mortgage Loan, such Realized Losses will be allocated
on any Distribution Date to the Class AF Certificates. If Realized Losses are on
a Class PO Mortgage Loan, such Realized Losses will be allocated to the Class PO
Certificates in an amount equal to the Class PO Percentage of the Realized
Losses and the remainder of the Realized Losses will be allocated on any
Distribution Date to the Class AF.
With respect to the Mortgage Loans in any Loan Group I, Loan
Group II, Loan Group III or Loan Group IV, Excess Losses will be allocated on
any Distribution Date among all the related Classes of Regular Certificates on a
PRO RATA basis.
With respect to the Group V Mortgage Loans, Excess Losses on a
Class IO Mortgage Loan will be allocated on any Distribution Date by allocating
the related Group V Senior Percentage of the Excess Loss to the Class AF
Certificates and the Group V Subordinate Percentage of the Excess Loss to the
Group V Subordinate Certificates.
With respect to the Group V Mortgage Loans, Excess Losses on a
Class PO Mortgage Loan will be allocated to the Class PO Certificates in an
amount equal to the related Class PO Percentage of the Excess Losses and the
remainder of the Excess Losses will be allocated on any Distribution Date to the
Group V Senior Certificates by allocating the related Group V Senior Percentage
of the Excess Loss to the related Group V Senior Certificates and the Group V
Subordinate Percentage of the Excess Loss to the Group V Subordinate
Certificates.
Extraordinary Trust Fund Expenses relating to Loan Group I,
Loan Group II, Loan Group III and Loan Group IV shall be allocated by the
Trustee on each Distribution Date as follows: first, to the Class BV-6
Certificates; second, to the Class BV-5 Certificates; third, to the Class BV-4
Certificates; fourth, to the Class BV-3 Certificates; fifth, to the Class BV-2
Certificates; and sixth, to the Class BV-1 Certificates, in each case until the
Certificate Principal Balance thereof has been reduced to zero. Thereafter, upon
the reduction of the Certificate Principal Balances of the Group
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I/IV Subordinate Certificates to zero, such Extraordinary Trust Fund Expenses
shall be allocated among the Class A Certificates on a PRO RATA basis.
Extraordinary Trust Fund Expenses relating to Loan Group I
will be allocated on any Distribution Date as follows: first, to the Class BF-6
Certificates; second, to the Class BF-5 Certificates; third, to the Class BF-4
Certificates; fourth, to the Class BF-3 Certificates; fifth, to the Class BF-2
Certificates; and sixth, to the Class BF-1 Certificates, in each case until the
Certificate Principal Balance of the related Class has been reduced to zero.
Thereafter, the Extraordinary Trust Fund Expenses will be allocated on any
Distribution Date among the Group V Senior Certificates on a PRO RATA basis.
As used herein, an allocation of a Realized Loss or
Extraordinary Trust Fund Expense 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) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate be
reduced more than once in respect of any particular amount both (i) allocable to
such Certificate in respect of Realized Losses or Extraordinary Trust Fund
Expenses pursuant to Section 4.04 and (ii) payable to the Holder of such
Certificate pursuant to Section 4.01(a) as a portion of the Senior Principal
Distribution Amount.
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. Reserved.
SECTION 4.07. Commission Reporting.
(i) The Trustee and the Master Servicer shall reasonably
cooperate with the Depositor in connection with satisfying the reporting
requirements (as such requirements may be revised from time to time by law or
regulation) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Trustee shall prepare and sign on behalf of the Trust Fund any Form
8-K customary for similar securities as required by the Exchange Act and the
Rules and Regulations of the Commission thereunder and shall file (via the
Commission's Electronic Data Gathering and Retrieval System) such Form 8-K on
behalf of the Depositor. The Trustee shall
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prepare and the party signing the Certification referenced below shall sign on
behalf of the Trust Fund any Form 10-K customary for similar securities as
required by the Exchange Act and the Rules and Regulations of the Commission
thereunder, and shall file (via the Commission's Electronic Data Gathering and
Retrieval System) such Form 10-K on behalf of the Depositor. With respect to any
Form 8-K (except for the initial Form 8-K which is filed by the Depositor) the
Depositor hereby grants to the Trustee a limited power of attorney to execute
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.
(ii) Each Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Commission), the Trustee shall file a
Form 10- K, in substance as required by applicable law or applicable Commission
staff's interpretations. Such Form 10-K shall include as exhibits the Master
Servicer's annual statement of compliance described under Section 3.20 and the
accountant's report described under Section 3.21, in each case to the extent
they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits reasonably promptly after they are delivered to the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit H-1 (or such other form as
may be permitted under the Exchange Act and the Rules and Regulations of the
Commission thereunder) (the "Certification"), with any necessary exceptions
noted therein, which shall be signed by a Servicing Officer of the Master
Servicer.
(iii) In addition, for so long as a Form 10-K is filed
pursuant to this Section 4.07, the Trustee shall sign and deliver to the Master
Servicer by March 15th of each calendar year a certification (in the form
attached hereto as Exhibit H-2) for the benefit of the Master Servicer and its
officers, directors and Affiliates regarding certain aspects of the
Certification (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K). If
the Master Servicer does not receive the Trustee's certification by March 15th
of each calendar year, the Master Servicer shall inform the Depositor of such
non-delivery and the Depositor shall cause the Trustee to deliver its
certification to the Master Servicer promptly.
(iv) In addition, (a) the Trustee shall indemnify and hold
harmless the Depositor, the Master Servicer and their respective officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Trustee's obligations under this Section 4.07 or the Trustee's negligence, bad
faith or willful misconduct in connection therewith and (b) the Master Servicer
shall indemnify and hold harmless the Depositor, the Trustee and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Master Servicer's obligations under this Section 4.07 or
the Master Servicer's negligence, bad faith or
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willful misconduct in connection therewith. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Depositor, then (x)
the Trustee agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 4.07 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (y) the
Master Servicer agrees that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Master Servicer on the other in connection
with a breach of the Master Servicer's obligations under this Section 4.07 or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith.
(v) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.
(vi) Prior to January 30 of the first year in which the
Trustee is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust Fund.
(vii) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.07 comply with the reporting requirements under
the Exchange Act, the Trustee and the Master Servicer hereby agree that they
will reasonably cooperate to amend the provisions of this Section 4.07 in order
to comply with such amended reporting requirements and such amendment of this
Section 4.07. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange Act.
SECTION 4.08. Distributions on the REMIC I Regular
Interests and REMIC II Regular
Interests
Distributions from the Group I/IV Mortgage Loans shall be
deemed to be made to the REMIC I Regular Interests first, so that the
Uncertificated Balance of each REMIC I Regular Interest ending with the
designation "B" is equal to 0.01% of the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular
Interest ending with the designation "A," so that the Uncertificated Balance of
each such REMIC I Regular Interest is equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the Certificate Principal Balance of the Class A Certificate in
the related Loan Group (except that if any such excess is a larger number than
in the preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular Interests such that the REMIC I Subordinated
Balance Ratio is maintained); and third, any remaining principal to REMIC I
Regular Interest LT-ZZ.
Distributions from the Group V Mortgage Loans shall be deemed
to be made to REMIC II Regular Interest LT-5 (except that rincipal received with
respect to a Class PO Mortgage Loan, the Class PO Percentage of such principal
will be deemed distributed to REMIC II Regular Interest LT-PO).
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SECTION 4.09. Excess Diverted Interest Reserve
Account
(a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, a separate, segregated trust account titled,
"Excess Diverted Interest Reserve Account, Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered holders of Salomon Mortgage
Loan Trust, Mortgage Pass-Through Certificates, Series 2003-NBC1."
(b) On each Distribution Date as to which there is an Excess
Diverted Interest Reserve Amount payable to a Class of Class A Certificates, the
Trustee shall deposit into the Excess Diverted Interest Reserve Account the
amount of such Excess Diverted Interest Reserve Amount, rather than distributing
such amounts to the Class R Certificateholders. On each such Distribution Date,
the Trustee shall hold all such amounts for the benefit of the Holders of the
Class A Certificates, and will distribute such amounts to the Holders of the
Class A Certificates, in the amounts and priorities set forth in Section 4.01.
(c) For federal and state income tax purposes, the Excess
Diverted Interest Reserve Account will be a "qualified reserve fund" within the
meaning of Code Section 860(G)(7)(B).
(d) At the written direction of the Holders of a majority in
Percentage Interest in the Class R Certificates, the Trustee shall direct any
depository institution maintaining the Excess Diverted Interest Reserve Account
to invest the funds in such 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 or an Affiliate manages or advises such
investment, 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 or an
Affiliate manages or advises such investment. Interest earned on such investment
shall be deposited into the Excess Diverted Interest Reserve Account.
(f) For federal tax return and information reporting, the
right of the Holders of the Class A Certificates to receive payments from the
Excess Diverted Interest Reserve Account in respect of any Excess Diverted
Interest Reserve Amount shall be assigned a value of zero.
(g) On the final Distribution Date, all Excess Diverted
Interest Reserve Amounts remaining in the Excess Diverted Interest Reserve
Account, if any, shall be paid to the Holders of the Class R Certificates.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
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(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 and REMIC II. 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-8. 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,
authenticated and delivered by the Trustee 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 Trustee 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, the Class BV-1 Certificates, the
Class BV-2 Certificates and the Class BV-3 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 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
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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
$100,000, except that any beneficial ownership that was represented by a
Book-Entry Certificate in an amount less than $100,000 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 nor 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 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
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provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
(b) No transfer of any Class IO Certificate, Class PO
Certificate, Subordinate Certificate or Residual Certificate (the "Private
Certificates") 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 Private Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor), 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 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. Neither the Depositor nor the Trustee is obligated to register or
qualify the Private 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 Private Certificate
shall, and does hereby agree 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.
(c) No transfer of a Class IO Certificate, Class PO
Certificate, Private 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 DOL
Regulations ("Plan Assets"), as certified by such transferee in the form of
Exhibit G, unless (i) the Depositor, the Trustee and the Master Servicer 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 or (ii) in the case of a Class IO
Certificate, Class PO Certificate, Class BF-1 Certificate, Class BF-2
Certificate, Class BF-3 Certificate, Class BV-1 Certificate, Class BV-2
Certificate and Class BV-3 Certificate, such Certificate has been the subject of
an ERISA Qualifying Underwriting. 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 (in which case, the Depositor
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.
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If any Subordinate Certificate or Residual Certificate or any
interest therein is acquired or held in violation of the provisions of the
preceding paragraph, the next preceding permitted beneficial owner will be
treated as the beneficial owner of that Certificate retroactive to the date of
transfer to the purported beneficial owner. Any purported beneficial owner whose
acquisition or holding of any such Certificate or interest therein was effected
in violation of the provisions of the preceding paragraph shall indemnify and
hold harmless the Depositor, the Master Servicer, the Trustee and the Trust Fund
from and against any and all liabilities, claims, costs or expenses incurred by
those parties as a result of that acquisition or holding.
(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
(a "Transferor Affidavit"), in the form attached
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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.
(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.
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(iv) The Trustee shall make available to the Internal
Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax
imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate 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
required 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 the Rating
Agencies to the effect that the modification, addition to or
elimination of such provisions will not cause the Rating
Agencies 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 REMIC I, REMIC II or REMIC III to cease to
qualify as a REMIC and will not cause (x) REMIC I or REMIC II
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, 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, 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
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accompanied by a written instrument of transfer in the form satisfactory to the
Trustee 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 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 Trustee in accordance with its customary
procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receive evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Trustee
such security or indemnity as may be required by them to save the Trustee
harmless, then, in the absence of actual knowledge by the Trustee 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
Trustee) 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 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 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 Private
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 in connection with the offer and sale of the
Private 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
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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 Private Certificate, the private placement
memorandum or other disclosure document relating to such Certificates in the
form most recently provided to the Trustee; and (ii) in all cases, (A) this
Agreement and any amendments hereof entered into pursuant to Section 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, the Class BV-1 Certificates, the Class BV-2
Certificates and the Class BV-3 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 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. The Depositor and the Master
Servicer shall be obligated to appear in, prosecute or defend any legal action
that is related to its respective duties under this Agreement; provided in its
opinion, it does not involve any expense or liability. Without limiting the
foregoing, the Master Servicer shall undertake to defend any claims against the
Trust Fund, the Trustee and/or itself initiated by a Borrower or otherwise
related to the servicing of any Mortgage Loan. 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 (subject to the limitations set forth above) 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, which consent may not be unreasonably withheld,
with written confirmation from the Rating Agencies (which confirmation shall be
furnished to the Depositor and the Trustee) that such resignation will not cause
the Rating Agencies to reduce the then current rating of the Class A
Certificates and provided that a qualified successor has agreed to assume the
duties and obligations of the Master Servicer hereunder. 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.
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Except as expressly provided herein, the Master Servicer shall
not assign nor transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, 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 Fees 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 of the parent company of the Master Servicer 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 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) (a) 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 (b) for so long as the Seller is
an affiliate of the Master Servicer, the Seller fails to observe or
perform in any material respect any of the covenants or agreements set
forth in Section 2.01(b) herein which continues unremedied for a period
of 30 days after the earlier of (i) the date on which written notice of
such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the Voting Rights and (ii)
actual knowledge of such failure by a Servicing Officer of the Master
Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and 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 consecutive 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 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 for a
period of one Business Day after the date upon which written notice of
such failure (which notice the Trustee must provide by 3:00 p.m. New
York City time on the Master Servicer Remittance Date), requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee.
If a Master Servicer Event of Default described in clauses (i)
through (v) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Master Servicer (and to the Depositor and 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 a Master Servicer under
this Agreement, to the extent permitted by law, and in and to the Mortgage Loans
and the proceeds thereof. If a Master Servicer Event of Default described in
clause (vi) hereof shall occur, then so long as such Master Servicer Event of
Default shall not have been remedied during the applicable time period set forth
in clause (vi) above, 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 a 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, subject to Section 7.02, 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
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prior to such termination). The Trustee shall be entitled to be reimbursed by
the Master Servicer (or by the Trust Fund if the Master Servicer fails to
fulfill its obligations hereunder within a commercially reasonable period of
time) for all costs associated with the transfer of servicing from the Master
Servicer to a successor master 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. For purposes of this Section 7.01, the Trustee shall
not be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
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, the Trust Fund or
this Agreement.
SECTION 7.02. Trustee to Act; Appointment of
Successor.
(a) From time the Master Servicer receives a notice of
termination, the Trustee (or such other successor Master Servicer approved in
accordance with this Agreement) shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement, the
Master Servicer shall not have the right to withdraw any funds from the
Collection Account without the consent of the Trustee and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto and arising thereafter placed on the
Master Servicer (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03(c) and its obligation to deposit amounts in respect of
losses pursuant to Section 3.12) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make 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. It is
understood and acknowledged by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the transition of servicing
obligations is fully effective. As compensation therefor, the Trustee shall be
entitled to the Servicing Fees and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (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 the
Rating Agencies 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
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assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer as such hereunder. The Depositor,
the Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement or the
Trustee, as applicable, 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 related 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) [Reserved].
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.
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Subject to Section 11.09(d), the Holders representing at least
66% of the Voting Rights evidenced by all Classes of Certificates affected by
any default or Master Servicer Event of Default hereunder may waive such default
or Master Servicer Event of Default; provided, however, that a default or Master
Servicer Event of Default under clause (i) or (vi) of Section 7.01 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 it, 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, it shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to its satisfaction, it 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 it unless it shall be proved that it 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,
method and place of conducting any proceeding for any remedy available
to it or exercising any trust or power conferred upon it under this
Agreement.
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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 not be under any 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. The 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 Trustee 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
its 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 Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall no 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 related portion of the Trustee
Fee and any income and gain realized from the investment of funds deposited in
the Distribution Account.
The Trustee and any director, officer, employee or agent of
the Trustee shall be indemnified by the Trust Fund 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 or otherwise arising out of or in connection
with the acceptance or administration of its obligations and
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duties under this Agreement, other than any loss, liability or expense (i)
resulting from any breach of the Master Servicer's obligations in connection
with this Agreement for which the Master Servicer shall indemnify the Trustee
pursuant to Section 10.03(c), (ii) that constitutes a specific liability of the
Trustee pursuant to Section 10.01(g) 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 in the case of the Trustee, as a result of a
breach of the Trustee's obligations under Article X hereof. The Master Servicer
agrees to indemnify the Trustee, from, and hold it harmless against, any loss,
liability or expense arising in respect of any breach by the Master Servicer of
its obligations in connection with 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 REMIC
I or REMIC II therefor.
(b) The Depositor shall pay any annual rating agency fees of
the Rating Agencies 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 Master Servicer or, in
the case of the Trustee, 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 (or a member of a bank holding company whose
capital and surplus is 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 to 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, the Trustee and the Master Servicer by the
Depositor. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any
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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 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, the Trustee 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 or the Trustee and 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 to the extent
held by it hereunder, as well as all moneys, held by it hereunder, and the
Depositor and the predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
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.
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.
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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 REMIC II or property securing the same may at the time be
located, the Trustee 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 or REMIC II, and to vest in
such Person or Persons, in such capacity, such title to REMIC I or REMIC II, or
any part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. 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 a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or REMIC II or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any
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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 or co-trustee.
SECTION 8.11. Appointment of Office or Agency.
The Trustee hereby appoints its Corporate Trust Office as the
office or agency 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 8.12. Representations and Warranties.
The Trustee hereby represents and warrants to the Master
Servicer and the Depositor as of the Closing Date, that:
(i) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association 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) It 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 other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it 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) It 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 its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement or its financial condition.
(vi) No litigation is pending or, to the best of its
knowledge, threatened against it, which would prohibit it from entering
into this Agreement or, in its good faith reasonable
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judgment, is likely to materially and adversely affect either the
ability of it to perform its obligations under this Agreement or its
financial condition.
ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or
Liquidation of the REMIC I Regular
Interests or REMIC II Regular
Interests.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee with respect to the Mortgage Loans (other than the obligations of
the Master Servicer to provide for and the Trustee to make payments to the
Holders of the related Class(es) of the 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 Master Servicer of all Mortgage Loans and
each REO Property remaining in the related Loan Groups and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in the related Loan Groups; provided,
however, that in no event shall the Trust Fund 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 Master
Servicer of all Mortgage Loans and each REO Property remaining in the related
Loan Groups 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, as applicable, plus the appraised value of each REO Property, if any,
included in REMIC I, as applicable, such appraisal to be conducted by an
appraiser mutually agreed upon by the Master Servicer and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of such Loan Groups (as determined 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 by (i) the Master Servicer or (ii) if the Certificates
(other than the Class R Certificates) will not receive all amounts owed to it as
a result of the termination, an Independent appraiser mutually agreed upon by
the Master Servicer and the Trustee on behalf of the Certificateholders);
provided, however, such option may only be exercised if the fair market value of
the assets of such Loan Groups described above is at least equal to the Stated
Principal Balance of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period and any outstanding Extraordinary Trust Fund Expenses)
and the appraised value of the REO Properties. If the determination of the fair
market value of the Mortgage Loans and REO Properties shall be required to be
made by the Master Servicer or an Independent appraiser as provided above, (A)
such appraisal shall be obtained at no expense to the Trustee and (B) the
Trustee may conclusively rely on, and shall be protected in relying on, such
appraisal.
(b) The Master Servicer shall have the right to purchase all
of the Group I/IV Mortgage Loans and each REO Property remaining in REMIC I
pursuant to clause (i) of the
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preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Master Servicer, as provided above, may
elect to purchase all of the Group I/IV Mortgage Loans and each REO Property
remaining in REMIC I pursuant to clause (i) above only if the aggregate Stated
Principal Balance of the Group I/IV Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is reduced to less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The Master Servicer shall have the right to purchase all of the
Group V Mortgage Loans and each REO Property remaining in REMIC II pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Master Servicer, as provided above,
may elect to purchase all of the Group V Mortgage Loans and each REO Property
remaining in REMIC II pursuant to clause (i) above only if the aggregate Stated
Principal Balance of the Group V Mortgage Loans and each REO Property remaining
in the Trust Fund at the time of such election is reduced to less than 10% of
the aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off
Date. For federal income tax purposes, the purchase by the Master Servicer of
all Mortgage Loans and all REO Properties underlying the Certificates is
intended to facilitate a redemption of such Certificates pursuant to a "cleanup
call" within the meaning of Treasury regulation section 1.860G-2(j).
Notwithstanding the foregoing, the Master Servicer shall have the right to
transfer, sell or assign its rights to purchase all of the Mortgage Loans and
each REO Property remaining in any Loan Group.
(c) Notice of the liquidation of the Certificates 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 remaining in REMIC I or REMIC II, as applicable, by the
Master Servicer, not earlier than the 15th day and not later than the 25th day
of the month next preceding the month of the final distribution on the
Certificates or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which the Trust Fund will terminate and final payment of
the Certificates will be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
Certificates from and after the Interest Accrual Period relating to the final
Distribution Date therefor and (iv) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee. 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 or REMIC II, as
applicable, by the Master Servicer, the Master Servicer shall deliver to the
Trustee for deposit in the Distribution Account not later than the last Business
Day of the month next preceding the month in which such distribution will be
made an amount in immediately available funds equal to the Termination 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
Master Servicer the Mortgage Files for the remaining Mortgage Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
delivered to it which are 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
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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.
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 Master Servicer purchases all the
Mortgage Loans and each REO Property, the Trust Fund shall be terminated in
accordance with the following additional requirements (or in connection with the
final payment on or other liquidation of the last Mortgage Loan or REO Property
remaining in REMIC I or REMIC II, as applicable, the additional requirement
specified in clause (i) below):
(i) The Trustee shall specify the first day in the
90-day liquidation period in a statement attached to REMIC I's
or REMIC II's, as applicable, final Tax Return pursuant to
Treasury regulation Section 1.860F-1, and such termination
shall satisfy all requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder,
as evidenced by an Opinion of Counsel obtained at the expense
of the Master Servicer;
(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 or REMIC II, as applicable, to the Master Servicer for
cash; and
(iii) At the time of the making of the final payment
on the Certificates, the Trustee shall distribute or credit,
or cause to be distributed or credited, to the Holders of the
Residual Certificates all cash on hand in REMIC I or REMIC II,
as applicable, (other than cash retained to meet claims), and
the Trust Fund shall terminate at that time.
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(b) At the expense of the Master Servicer, the Trustee shall
prepare or cause to be prepared the documentation required in connection with
the adoption of a plan of liquidation of REMIC I or REMIC II, as applicable,
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 REMIC I or REMIC II, as applicable, 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 REMIC I, REMIC II and
REMIC III each as a REMIC under the Code and, if necessary, under applicable
state law. Such election will be made by the Trustee 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 and REMIC II, the REMIC I Regular Interests and REMIC II Regular
Interests shall be designated as the Regular Interests in REMIC I and REMIC II,
respectively. The Class R-I Certificates shall be designated as the Residual
Interest in REMIC I and the Class R-II Certificates shall be designates as the
Residual Interest in REMIC II. For the purposes of the REMIC election in respect
of REMIC III, the Certificates (other than the Class R 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
Certificates 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, or the Master Servicer, as the case may be,
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 Trust REMIC 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 which tax audit arises as a result of the
negligence, willful misfeasance or bad faith of the Trustee or the Master
Servicer, as the case may be. The Trustee, as agent for the Trust REMIC's tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving any Trust REMIC 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 the 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 any REMIC created hereunder. By its 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 any 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
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Fund as 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 any Trust REMIC all
reporting and other tax compliance duties that are the responsibility of any
Trust REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority
including the filing of Form 8811 with the Internal Revenue Service within 30
days following the Closing Date and applying for an Employer Identification
Number from the Internal Revenue Service via Form SS-4 or other acceptable
method for such REMIC and within thirty days of the Closing Date. 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, upon reasonable compensation pursuant to Section
5.02(d)(iv), 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 the Trust REMIC. 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 Master Servicer and the Trustee shall take such action
and shall cause the Trust REMIC to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions. The
Master Servicer and 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 a Trust REMIC 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 Trust REMIC, 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
any Trust REMIC or its assets, or causing any Trust REMIC to take any action,
which is not contemplated under the terms of this Agreement, the Master Servicer
will consult with the Trustee or their designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any Trust REMIC, and the Master Servicer shall not take any such action or cause
any Trust REMIC to take any such action as to which the Trustee has advised it
in
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writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At all times as may be
required by the Code, the Trustee or the Master Servicer will ensure that
substantially all of the assets of any Trust REMIC 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 Trust REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of any
Trust REMIC as defined in Section 860G(c) of the Code, on any contributions to
any Trust 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)
[reserved], (iii) 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 (iv) against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.
(h) [reserved].
(i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to REMIC I and REMIC II on a calendar
year and on an accrual basis.
(j) Following the Startup Day, the Master Servicer and the
Trustee shall not accept any contributions of assets to REMIC I or REMIC II
other than in connection with any Qualified Substitute Mortgage Loan delivered
in accordance with Section 2.03 unless it shall have received an Opinion of
Counsel to the effect that the inclusion of such assets in the Trust Fund will
not cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any Trust 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 or REMIC II will receive a fee or other
compensation for services nor permit either such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
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 or REMIC II, (iii) the
termination of REMIC I or REMIC II pursuant to Article IX of this Agreement,
(iv) a substitution pursuant to Article II of
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this Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III
of this Agreement), nor acquire any assets for REMIC I or REMIC II (other than
REO Property acquired in respect of a defaulted Mortgage Loan), nor sell or
dispose of any investments in the Collection Account or the Distribution Account
for gain, nor accept any contributions to REMIC I or REMIC II after the Closing
Date (other than a Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03).
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 may be amended from time to time by the
Depositor, the Master Servicer and the Trustee 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), (iii) to amend the provisions of Section
4.07 or (iv) to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement, provided that such action shall not, as evidenced by either
(a) an Opinion of Counsel delivered to the Trustee or (b) written notice to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
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 or written notice from the Rating Agencies shall be required
to address the effect of any such amendment on any such consenting
Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of 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 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 REMIC I, REMIC II or REMIC III
pursuant to the REMIC Provisions or cause REMIC I, REMIC II or REMIC III to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
Prior to executing any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel (provided by the
Person requesting such amendment) to the effect that such amendment is
authorized or permitted by this Agreement.
143
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
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.
Notwithstanding the foregoing, 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 Certificateholders 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
144
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
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 indemnity satisfactory to it 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 sent
(i) via facsimile (with confirmation of receipt) or (ii) 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, 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 the Master Servicer,
National Bank of Commerce, Xxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000,
Attention: Xxx Xxxxxxx, (telecopy: (000) 000-0000), or such other address or
telecopy number as may hereafter be furnished to the Trustee and the Depositor
in writing by the Master Servicer and (c) in the case of the Trustee, the
Corporate Trust Office, with a copy to Xxxxx Fargo Bank Minnesota, National
Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Services - SBMS VII, Inc. 2003- NBC1, 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
145
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 make available to the Rating
Agencies 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 the Rating Agencies copies of the following:
1. Each annual statement as to compliance described
in Section 3.20; and
146
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 Standard & Poor's Ratings Services, a division of the XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to Fitch Ratings, Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and to Xxxxx'x Investors Service, Inc.,
00 Xxxxxx Xxxxxx, 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. However, in the event that, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Depositor,
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 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 Depositor to the Trustee of a security interest in all of 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 obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute
147
and unconditional sale of the Mortgage Loans and assets constituting the Trust
Fund by the Depositor to the Trustee.
148
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:
------------------------------------
Name:
Title:
NATIONAL BANK OF COMMERCE,
as Master Servicer
By:
------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee
By:
------------------------------------
Name:
Title:
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the __th day of March 2003, before me, a notary public in
and for said State, personally appeared _________________, 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 TENNESSEE )
) ss.:
COUNTY OF SHELBY )
On the __th day of March 2003, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
________________ of National Bank of Commerce, 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 __th day of March 2003, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
_______________ of Xxxxx Fargo 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 AV-1 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
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, AS AMENDED (THE "CODE").
Series 2003-NBC1, Class AV-1 Aggregate Certificate Principal Balance of
Class AV-1 Certificates as of the Issue Date:
$ ___________________
Pass-Through Rate: Variable Denomination: $________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
CUSIP: ____________
A-1-1
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.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Cede & Co. 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 AV-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-1 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 25th day of each month or, if such 25th 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 AV-1 Certificates on such Distribution
Date pursuant to the Agreement.
A-1-2
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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class AV-1 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group I Mortgage
Loans, weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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
A-1-3
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 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 set forth therein, 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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-1-5
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-1-6
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS AV-2 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Series 2003-NBC1, Class AV-2 Aggregate Certificate Principal Balance of Class
AV-2 Certificates as of Issue Date:
$______________________________
Pass-Through Rate: Variable Denomination: $_________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
CUSIP: _____________
A-2-1
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.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Cede & Co. 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 AV-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-2 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 25th day of each month or, if such 25th 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 AV-2 Certificates on such Distribution
Date pursuant to the Agreement.
A-2-2
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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class AV-2 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group II Mortgage
Loans, weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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
A-2-3
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 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 set forth therein, 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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
required to be paid to them pursuant to the Agreement following the earlier of
(i) the final payment (or any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-2-5
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-2-6
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS AV-3 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES AND THE
CLASS AV-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
Series 2003-NBC1, Class AV-3 Aggregate Certificate Principal Balance of
Class AV-3 Certificates as of the Issue Date:
$ ___________________
Pass-Through Rate: Variable Denomination: $________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
CUSIP: ____________
A-3-1
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.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Cede & Co. 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 AV-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-3 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 25th day of each month or, if such 25th 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 AV-3 Certificates on such Distribution
Date pursuant to the Agreement.
A-3-2
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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class AV-3 Certificates and any
Distribution Date, the Pass- Through Rate a rate per annum equal to the weighted
average of the Expense Adjusted Mortgage Rates of the Group III Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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
A-3-3
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 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 set forth therein, 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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-3-5
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-3-6
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS AV-4 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES AND THE CLASS AV- 3 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Series 2003-NBC1, Class AV-4 Aggregate Certificate Principal Balance of
Class AV-4 Certificates as of the Issue Date:
$ ___________________
Pass-Through Rate: Variable Denomination: $________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
CUSIP: ____________
A-4-1
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.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Cede & Co. 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 AV-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AV-4 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 25th day of each month or, if such 25th 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 AV-4 Certificates on such Distribution
Date pursuant to the Agreement.
A-4-2
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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class AV-4 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group IV Mortgage
Loans, weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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
A-4-3
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 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 set forth therein, 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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-4-5
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-4-6
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS AF CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
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, AS AMENDED (THE "CODE").
Series 2003-NBC1, Class AF Aggregate Certificate Principal Balance of
Class AF Certificates as of the Issue Date:
$ ___________________
Pass-Through Rate: [__]% per annum Denomination: $________________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
CUSIP: ____________
A-4-8
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.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Cede & Co. 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 AF Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class AF 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 25th day of each month or, if such 25th 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 AF Certificates on such Distribution
Date pursuant to the Agreement.
A-4-9
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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class AF Certificates and any Distribution
Date, the Pass-Through Rate is a rate per annum equal to the [__]% per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-4-10
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 set forth therein, 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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4-11
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-4-12
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-4-13
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.
X-0-00
XXXXXXX X-0
-----------
FORM OF CLASS IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS 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, AS AMENDED (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 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.
Series 2003-NBC1, Class IO Aggregate Notional Amount of Class IO
Certificates as of the Issue Date:
$________________________
Pass-Through Rate: Variable Denomination: $__________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1 Issue Date: March [__], 2003
A-3-1
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Notional Amount of the Class IO Certificates as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
IO 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 25th day of each month or, if such 25th 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 IO 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be
A-3-2
made after due notice by the Trustee of the pendency of such distribution and
only upon the 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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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 Notional Amount 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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, 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.
A-3-3
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to
A-3-4
purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-3-6
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-3-7
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS PO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS 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, AS AMENDED (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 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.
A-4-1
Series 2003-NBC1, Class PO Aggregate Certificate Principal Balance of
Class PO Certificates as of the Issue Date:
$_______________
Pass-Through Rate: N/A Denomination: $_________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1 Issue Date: March [__], 2003
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.
A-4-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 PO Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class PO 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 25th day of each month or, if such 25th 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 PO 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-4-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, 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 shall be made unless the
transfer is made pursuant to
A-4-4
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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
A-4-5
Loan remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-4-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-4-8
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS BV-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES THE CLASS AV-3 CERTIFICATES AND THE CLASS AV-4
CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-5-1
Series 2003-NBC1, Class BV-1 Aggregate Certificate Principal Balance of
Class BV-1 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-5-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BV-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-1 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 25th day of each month or, if such 25th 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 BV-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be
A-5-3
made after due notice by the Trustee of the pendency of such distribution and
only upon the 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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BV-1 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-5-4
and denominations representing Percentage Interests specified in the Agreement.
As provided in the Agreement and subject to certain limitations set forth
therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement
A-5-5
following the earlier of (i) the final payment (or any advance with respect
thereto) on or other liquidation 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 remaining therein.
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 remaining therein 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 principal balance of the Mortgage
Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-5-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-5-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-5-8
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.
X-0-0
XXXXXXX X-0
-----------
FORM OF CLASS BV-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES, THE CLASS AV-3 CERTIFICATES, THE CLASS AV-4
CERTIFICATES AND THE CLASS BV- 1 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE 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 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.
A-6-1
Series 2003-NBC1, Class BV-2 Aggregate Certificate Principal Balance of
Class BV-2 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $______________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-6-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BV-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-2 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 25th day of each month or, if such 25th 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 BV-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-6-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BV-2 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-6-4
Agreement and subject to certain limitations set forth therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
A-6-5
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-6-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-6-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-6-9
EXHIBIT A-10
------------
FORM OF CLASS BV-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES, THE CLASS AV-3 CERTIFICATES, THE CLASS AV-4
CERTIFICATES, THE CLASS BV-1 CERTIFICATES AND THE CLASS BV-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-7-1
Series 2003-NBC1, Class BV-3 Aggregate Certificate Principal Balance of
Class BV-3 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $______________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-7-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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.
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 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 BV-3 Certificates as of the Issue Date) in that
certain beneficial ownership interest evidenced by all the Class BV-3
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 25th day of each month or, if such 25th 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 BV-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in the
A-7-3
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 the 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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BV-3 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 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 set forth therein, 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 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
A-7-4
Agreement and subject to certain limitations set forth therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
A-7-5
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-7-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-7-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-7-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-7-9
EXHIBIT A-11
------------
FORM OF CLASS BV-4 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES, THE CLASS AV-3 CERTIFICATES, THE CLASS AV-4
CERTIFICATES, THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2 CERTIFICATES
AND THE CLASS BV- 3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
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 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.
A-8-1
Series 2003-NBC1, Class BV-4 Aggregate Certificate Principal Balance of
Class BV-4 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $______________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-8-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BV-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-4 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 25th day of each month or, if such 25th 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 BV-4 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-8-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Subordinate Certificates and any Distribution Date,
the Pass-Through Rate is a rate per annum equal to the weighted average of the
Expense Adjusted Mortgage Rates of the Mortgage Loans, weighted on the basis of
the outstanding Stated Principal Balances of the Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-8-4
Agreement and subject to certain limitations set forth therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
A-8-5
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-8-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-8-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-8-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-8-9
EXHIBIT A-12
------------
FORM OF CLASS BV-5 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES, THE CLASS AV-3 CERTIFICATES, THE CLASS AV-4
CERTIFICATES, THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2 CERTIFICATES,
THE CLASS BV-3 CERTIFICATES AND THE CLASS BV-4 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE 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 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.
A-9-1
Series 2003-NBC1, Class BV-5 Aggregate Certificate Principal Balance of
Class BV-5 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $______________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-9-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BV-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-5 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 25th day of each month or, if such 25th 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 BV-5 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-9-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BV-5 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-9-4
Agreement and subject to certain limitations set forth therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
A-9-5
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-9-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-9-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-9-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-9-9
EXHIBIT A-13
------------
FORM OF CLASS BV-6 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1 CERTIFICATES, THE
CLASS AV-2 CERTIFICATES, THE CLASS AV-3 CERTIFICATES, THE CLASS AV-4
CERTIFICATES, THE CLASS BV-1 CERTIFICATES, THE CLASS BV-2 CERTIFICATES,
THE CLASS BV-3 CERTIFICATES, THE CLASS BV-4 CERTIFICATES AND THE CLASS
BV- 5 CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-10-1
Series 2003-NBC1, Class BV-6 Aggregate Certificate Principal Balance of
Class BV-6 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: Variable Denomination: $______________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-10-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BV-6
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BV-6 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 25th day of each month or, if such 25th 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 BV-6 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-10-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BV-5 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted on the basis of the outstanding Stated Principal Balances of the
Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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
A-10-4
Agreement and subject to certain limitations set forth therein, 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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
A-10-5
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-10-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-10-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-10-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-10-9
EXHIBIT A-14
------------
FORM OF CLASS BF-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF
CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-10-10
Series 2003-NBC1, Class BF-1 Aggregate Certificate Principal Balance of
Class BF-1 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $________________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-10-11
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BF-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-1 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 25th day of each month or, if such 25th 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 BF-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be
A-10-12
made after due notice by the Trustee of the pendency of such distribution and
only upon the 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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-1 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
A-10-13
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 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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party
A-10-14
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 remaining therein. 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
remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-10-15
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-10-16
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-10-17
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-10-18
EXHIBIT A-15
------------
FORM OF CLASS BF-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF CERTIFICATES AND THE
CLASS BF-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-6-1
Series 2003-NBC1, Class BF-2 Aggregate Certificate Principal Balance of
Class BF-2 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $______________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-6-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BF-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-2 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 25th day of each month or, if such 25th 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 BF-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-6-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-2 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-6-4
Percentage Interest, as requested by the Holder surrendering the same.
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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
A-6-5
all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans remaining therein. 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 remaining therein 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 principal balance of the
Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-6-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-6-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-6-9
EXHIBIT A-16
------------
FORM OF CLASS BF-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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF CERTIFICATES, THE CLASS
BF-1 CERTIFICATES AND THE CLASS BF- 2 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE 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 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.
A-7-1
Series 2003-NBC1, Class BF-3 Aggregate Certificate Principal Balance of
Class BF-3 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $______________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-7-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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.
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 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 BF-3 Certificates as of the Issue Date) in that
certain beneficial ownership interest evidenced by all the Class BF-3
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 25th day of each month or, if such 25th 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 BF-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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in the
A-7-3
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 the 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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-3 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-7-4
Percentage Interest, as requested by the Holder surrendering the same.
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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
A-7-5
all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans remaining therein. 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 remaining therein 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 principal balance of the
Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-7-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-10-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-7-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-7-9
EXHIBIT A-17
------------
FORM OF CLASS BF-4 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF CERTIFICATES, THE CLASS
BF-1 CERTIFICATES, THE CLASS BF-2 CERTIFICATES AND THE CLASS BF-3
CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-8-1
Series 2003-NBC1, Class BF-4 Aggregate Certificate Principal Balance of
Class BF-4 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $______________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-8-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BF-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-4 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 25th day of each month or, if such 25th 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 BF-4 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-8-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-4 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-8-4
Percentage Interest, as requested by the Holder surrendering the same.
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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
A-8-5
all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans remaining therein. 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 remaining therein 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 principal balance of the
Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-8-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-8-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-8-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-8-9
EXHIBIT A-18
FORM OF CLASS BF-5 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF CERTIFICATES, THE CLASS
BF-1 CERTIFICATES, THE CLASS BF-2 CERTIFICATES, THE CLASS BF-3
CERTIFICATES AND THE CLASS BF- 4 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE 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 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.
A-9-1
Series 2003-NBC1, Class BF-5 Aggregate Certificate Principal Balance of
Class BF-5 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $______________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-9-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BF-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-5 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 25th day of each month or, if such 25th 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 BF-5 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-9-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-5 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-9-4
Percentage Interest, as requested by the Holder surrendering the same.
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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
A-9-5
all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans remaining therein. 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 remaining therein 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 principal balance of the
Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-9-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-9-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-9-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-9-9
EXHIBIT A-19
------------
FORM OF CLASS BF-6 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS AF CERTIFICATES, THE CLASS
BF-1 CERTIFICATES, THE CLASS BF-2 CERTIFICATES, THE CLASS BF-3
CERTIFICATES, THE CLASS BF-4 CERTIFICATES AND THE CLASS BF-5
CERTIFICATES TO THE EXTENT DESCRIBED IN THE 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 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.
A-10-1
Series 2003-NBC1, Class BF-6 Aggregate Certificate Principal Balance of
Class BF-6 Certificates as of the Issue Date:
$___________________
Pass-Through Rate: [__]% per annum Denomination: $______________
(subject to limitation and increase as set
forth herein)
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
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.
A-10-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 BF-6
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class BF-6 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 25th day of each month or, if such 25th 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 BF-6 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-10-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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.
With respect to the Class BF-6 Certificates and any
Distribution Date, the Pass- Through Rate is a rate per annum equal to the [__]%
per annum.
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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-10-4
Percentage Interest, as requested by the Holder surrendering the same.
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.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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
A-10-5
all the Mortgage Loans and all property acquired in respect of such Mortgage
Loans remaining therein. 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 remaining therein 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 principal balance of the
Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-10-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-10-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-10-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-10-9
EXHIBIT A-20
------------
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, AS AMENDED (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
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 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
A-11-1
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 AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS
A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series 2003-NBC1, Class R-I Aggregate Percentage Interest of
Class R-I Certificates as of the Issue Date:
_______________________
Pass-Through Rate: N/A Denomination: _________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
A-11-2
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Percentage Interest 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 25th day of each month or, if such 25th 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-11-3
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, 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 shall be made unless the
transfer is made pursuant to
A-11-4
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-I Certificates have been designated as a
residual interest in REMIC I, (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 Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the
A-11-5
Trust Fund to cease to qualify as a REMIC or cause the imposition of a tax upon
REMIC I.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-11-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-11-7
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-11-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-11-9
EXHIBIT A-21
------------
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, AS AMENDED (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
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 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
A-11-10
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 AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS
A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series 2003-NBC1, Class R-II Aggregate Percentage Interest of
Class R-II Certificates as of the Issue Date:
_______________________
Pass-Through Rate: N/A Denomination: _________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
A-11-11
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Percentage Interest 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 25th day of each month or, if such 25th 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-11-12
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, 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 shall be made unless the
transfer is made pursuant to
A-11-13
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 REMIC I, (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 Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the
A-11-14
Trust Fund to cease to qualify as a REMIC or cause the imposition of a tax upon
REMIC I.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-11-15
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-11-16
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-11-17
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-11-18
EXHIBIT A-22
------------
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, AS AMENDED (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
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 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
A-11-19
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 AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS
A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series 2003-NBC1, Class R-III Aggregate Percentage Interest of
Class R-III Certificates as of the Issue Date:
_______________________
Pass-Through Rate: N/A Denomination: _________________
Date of Agreement and Cut-off Date: Master Servicer: National Bank of Commerce
March 1, 2003
First Distribution Date: April 25, 2003 Trustee: Xxxxx Fargo Bank Minnesota, National
Association
No. 1
Issue Date: March [__], 2003
A-11-20
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2003-NBC1
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 and fixed-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 MORTGAGE LOAN SELLER, 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 Percentage Interest 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 the REMICs 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 25th day of each month or, if such 25th 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 or otherwise by check mailed by first class mail to the
address of such Holder appearing in 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 the
A-11-21
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 Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter 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 Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Holders of the Certificates 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 set forth therein, 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 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 set forth therein, 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 shall be made unless the
transfer is made pursuant to
A-11-22
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 REMIC I, (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 Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the
A-11-23
Trust Fund to cease to qualify as a REMIC or cause the imposition of a tax upon
REMIC I.
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 any agent
of the Depositor, the Master Servicer or the Trustee 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 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 (or provision for payment) to the
Holders of the Certificates 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 any advance with respect thereto) on or other
liquidation 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 remaining therein. 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 remaining therein 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 principal balance of the Mortgage Loans as of 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 Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-11-24
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: March __, 2003
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:_______________________________
Authorized Signatory
A-11-25
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 _________________
of 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)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Trustee 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
A-11-26
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________, as its agent.
A-11-27
EXHIBIT B
---------
[RESERVED]
B-1
EXHIBIT C-1
-----------
FORM OF TRUSTEE'S/CUSTODIAN'S RECEIPT OF MORTGAGE NOTE
___________, 2003
Salomon Brothers Mortgage Securities VII, Inc. National Bank of Commerce
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of March 1,
2003, among Salomon Brothers Mortgage Securities VII,
Inc., National Bank of Commerce and Xxxxx Fargo Bank
Minnesota, National Association, Mortgage
Pass-Through Certificates, Series 2003-NBC1
-----------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exceptions in accordance
with Section 2.02 of the referenced Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Pooling and
Servicing Agreement.
The Trustee hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), (i) all documents required
to be delivered to it pursuant Section 2.01 of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn 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), (ii), (xi) and (xiv) of
the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File.
The Trustee is under no duty or obligation 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.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
By:______________________________
Name:
Title:
C-2-1
EXHIBIT C-2
-----------
FORM OF TRUSTEE'S/CUSTODIAN'S INITIAL CERTIFICATION
_________________
Salomon Brothers Mortgage Securities VII, National Bank of Commerce
Inc. One Commerce Square
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx Xxxxxxx, XX 00000
Xxx Xxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of March 1,
2003, among Salomon Brothers Mortgage Securities VII,
Inc., National Bank of Commerce and Xxxxx Fargo Bank
Minnesota, National Association, Mortgage
Pass-Through Certificates, Series 2003-NBC1
-----------------------------------------------------
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) all documents required to be delivered to it pursuant to
Section 2.01(a) of this Agreement are in its possession;
(ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn 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), (ii), (xi) and (xiv) of the Mortgage Loan
Schedule accurately reflects information set forth in the Mortgage File
The Trustee is under no duty or obligation 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.
C-2-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:_________________________
Name:
Title:
C-2-3
EXHIBIT C-3
FORM OF TRUSTEE'S/CUSTODIAN'S FINAL CERTIFICATION
Salomon Brothers Mortgage Securities VII, Inc. National Bank of Commerce
000 Xxxxxxxxx Xxxxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement, dated as of March 1,
2003, among Salomon Brothers Mortgage Securities VII,
Inc., National Bank of Commerce and Xxxxx Fargo Bank
Minnesota, National Association, Mortgage
Pass-Through Certificates, Series 2003-NBC1
-----------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement, dated
as of March 1, 2003, among Salomon Brothers Mortgage Securities VII, Inc., as
Depositor, National Bank of Commerce as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association as Trustee (the "Trustee"), we hereby
acknowledge the receipt of each Mortgage File with any exceptions thereto listed
on Exhibit 2.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Name:
Title:
C-2-4
EXHIBIT D
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FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
D-1
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated March 21, 2003, between Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser") and National Bank of Commerce, a national
bank (the "Seller").
PRELIMINARY STATEMENT
The Seller intends to sell the Mortgage Loans (as hereinafter
defined) on a servicing retained basis to the Purchaser on the terms and subject
to the conditions set forth in this Agreement. The Purchaser intends to deposit
the Mortgage Loans into a mortgage pool comprising the trust fund. The trust
fund will be evidenced by a single series of mortgage pass-through certificates
designated as Series 2003-NBC1 (the "Certificates"). The Certificates will
consist of twenty classes of certificates. The Certificates will be issued
pursuant to a Pooling and Servicing Agreement, dated as of March 1, 2003 (the
"Pooling and Servicing Agreement"), among the Purchaser as depositor, the Seller
as master servicer (the "Master Servicer") and Xxxxx Fargo Bank Minnesota,
National Association as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Pooling and Servicing
Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before March 25, 2003 (the "Closing
Date"), certain adjustable-rate and fixed-rate, residential mortgage loans (the
"Mortgage Loans") on a servicing retained basis, having an aggregate principal
balance on March 1, 2003 (the "Cut-off Date") of approximately $646,410,083 (the
"Closing Balance"), after giving effect to all payments due on the Mortgage
Loans on or before the Cut-off Date, whether or not received.
SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that together shall describe such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement. The
Closing Schedule will conform to the requirements set forth in this Agreement
and to the definition of "Mortgage Loan Schedule" under the Pooling and
Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, pay to or upon the
order of the Seller in immediately available funds an amount (the "Purchase
Price") equal to (i) the net sale proceeds of all or a portion of the Class AV-4
Certificates, plus accrued interest and (ii) the other Classes of Certificates
issued pursuant to the Pooling and Servicing Agreement (the "NBC 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. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the related Certificateholders.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
and in connection therewith hereby assigns to the Purchaser, effective as of the
Closing Date, without recourse but subject to the terms of this Agreement, all
of its right, title and interest in, to and under the Mortgage Loans. The
contents of each Mortgage File not delivered to the Purchaser or to any
assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale of the Mortgage Loans, the ownership of each Mortgage Note, the related
Mortgage and the other contents of the related Mortgage File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or that come into the possession of the Seller
on or after the Closing Date shall immediately vest in the Purchaser and shall
be delivered as soon as practicable to the Purchaser or as otherwise directed by
the Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. In connection with
such transfer and assignment, the Seller will deliver to, and deposit with, the
Purchaser or the Purchaser's designee, the documents or instruments set forth in
Section 2.01 of the Pooling and Servicing Agreement.
In instances where an original recorded Mortgage or power of
attorney cannot be delivered by the Seller to the Purchaser prior to or
concurrently with the execution and delivery of this Agreement, due to a delay
in connection with the recording of such Mortgage or power of attorney, the
Seller may, (a) in lieu of delivering such original recorded Mortgage or power
of attorney referred to in clause (ii) of Section 2.01(a) of the Pooling and
Servicing Agreement, deliver to the Purchaser a copy thereof, provided that the
Seller certifies that the original Mortgage or power of attorney has been
delivered (in the jurisdictions required) to a title insurance company for
recordation after receipt of its policy of title insurance or binder therefor
(which may be a certificate relating to a master policy of title insurance), and
(b) in lieu of delivering the completed assignment in recordable form referred
to in clause (iii) of Section 2.01(a) of the Pooling and Servicing Agreement to
the Purchaser, deliver such assignment to the Purchaser completed except for
recording information. In all such instances, the Seller will deliver the
original recorded Mortgage or power of attorney and completed Assignment (if
applicable) to the Purchaser promptly upon receipt of such Mortgage or power of
attorney. In instances where an original recorded Mortgage
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or power of attorney has been lost or misplaced, the Seller, or in the
jurisdictions where allowed, the related title insurance company may deliver in
lieu of such Mortgage or power of attorney, a copy of such Mortgage or power of
attorney bearing recordation information and certified as true and correct by
the office in which recordation thereof was made. In instances where the
original or a copy of the title insurance policy referred to in clause (v) of
Section 2.01(a) of the Pooling and Servicing Agreement (which may be a
certificate relating to a master policy of title insurance) pertaining to the
Mortgaged Property relating to a Mortgage Loan cannot be delivered by the Seller
to the Purchaser prior to or concurrently with the execution and delivery of
this Agreement because such policy is not yet available, the Seller may, in lieu
of delivering the original or a copy of such title insurance, deliver to the
Purchaser with respect to such policy (which may be a certificate relating to a
master policy of title insurance) and deliver the original or a copy of such
policy (which may be a certificate relating to a master policy of title
insurance) to the Purchaser within 270 days of the Closing Date. In instances
where an original assumption, modification or buydown agreement cannot be
delivered by the Seller to the Purchaser prior to or concurrently with the
execution and delivery of this Agreement, the Seller may, in lieu of delivering
the original of such agreement, deliver a certified copy thereof.
To the extent not already recorded, the Seller shall promptly
(and in no event later than five Business Days following the later of (i) the
Closing Date and (ii) the date of receipt by the Seller of the recording
information for a Mortgage) submit or cause to be submitted for recording, at no
expense to the trust fund, in the appropriate public office for real property
records, each Assignment delivered to it pursuant to Section 2.01(a)(iii) of the
Pooling and Servicing Agreement. In the event that any such Assignment is lost
or returned unrecorded because of a defect therein, the Seller 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, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland and Florida) unless such
failure to record would result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Certificates; provided, however, the Seller
shall submit each Assignment for recording, at no expense to the trust fund,
upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) the occurrence
of a Master Servicer Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 7.02 of the Pooling and Servicing
Agreement and (v) with respect to any one Assignment the occurrence of a
foreclosure relating to the Mortgagor under the related Mortgage.
With respect to a maximum of approximately 4.00% of the
Original Mortgage Loans, by outstanding principal balance of the Original
Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to
in the Pooling and Servicing Agreement cannot be located, the obligations of the
Seller to deliver such documents shall be deemed to be satisfied upon delivery
to the Purchaser of a lost note affidavit and a photocopy of the related
Mortgage Note; provided, however, that the Seller may deliver a lost note
affidavit for up to 2.00% of the Original Mortgage
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Loans, by outstanding principal balance of the Original Mortgage Loans as of the
Cut-off Date, without attaching a photocopy of the related Mortgage Note
thereto. If any of the original Mortgage Notes for which a lost note affidavit
was delivered to the Purchaser is subsequently located, such original Mortgage
Note shall be delivered to the Trustee within ten Business Days.
The Seller shall deliver or cause to be delivered to the
Purchaser 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, modification, consolidation or extension of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Purchaser are and shall be held by or on behalf of the
Seller 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 Purchaser. Any such original
document delivered to or held by the Purchaser 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 Seller.
(c) As set forth in Section (b) above, the Mortgage Note shall
be the only portion of the Mortgage File that shall be delivered by the Seller
to the Purchaser, on the Closing Date. The portion of the Mortgage File
constituting items (ii) through (v) of Section 2.01(a) of the Pooling and
Servicing Agreement (the "Remaining Mortgage File") shall not be delivered to
the Purchaser, and shall be retained by the Seller.
If at any time either (a) the short-term senior unsecured debt
rating of the Seller by Fitch is reduced below "F1" or (b) the long-term senior
unsecured debt obligations of the Seller are downgraded below a rating of "A-"
by Fitch (either (a) or (b), a "Seller Downgrade Event") shall occur, the
Seller, at its own expense, shall within 15 days (the "Remaining Mortgage File
Transfer Date") deliver to, and deposit with, the Trustee or the Custodian on
behalf of the Trustee, the Remaining Mortgage File with respect to each Mortgage
Loan in accordance with the provisions of Section 2.01(a) of the Pooling and
Servicing Agreement.
(d) 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.
(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
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incurred by or on behalf of the Purchaser, the Master Servicer 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
Note pertaining to each Mortgage Loan, or (ii) make such Mortgage Notes
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination; provided, however, that the Seller shall not be
required to provide mortgagor names or addresses to any such assignee,
transferee or designee. 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 Notes shall not affect the rights of the Purchaser
or any permitted 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.
The Seller hereby represents and warrants, as of the date
hereof and as of the Closing Date, and covenants, that:
(i) The Seller is a national bank, duly organized and validly
existing and in good standing under the laws of the United States with
full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the
transactions contemplated herein. The Seller had the full corporate
power and authority to acquire the Mortgage Loans. The Seller has all
requisite corporate power and authority to own the Mortgage Loans and
to transfer and convey the Mortgage Loans to the Purchaser and has the
full corporate power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the terms and
conditions of this Agreement;
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller, all requisite corporate action
having been taken, and (assuming the due authorization, execution and
delivery hereof by the Purchaser) constitutes the valid, legal and
binding obligation of the Seller, enforceable in accordance with its
terms, except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar
laws relating to or affecting the rights of creditors generally, (B)
general equity principles (regardless of whether such enforcement is
considered in a
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proceeding in equity or at law) or (C) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities;
(iii) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required, under federal laws for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation by the Seller of any other transaction
contemplated hereby and by the Pooling and Servicing Agreement;
provided, however, that the Seller makes no representation or warranty
regarding federal or state securities laws in connection with the sale
or distribution of the Certificates;
(iv) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Seller to
the Purchaser, any affiliate of the Purchaser or the Trustee for use in
connection with the purchase of the Mortgage Loans and the transactions
contemplated hereunder and under the Pooling and Servicing Agreement
will contain any untrue statement of a material fact, or omit a
material fact necessary to make the information, certificate, statement
or report not misleading in any material respect;
(v) Neither the sale of the Mortgage Loans to the Purchaser,
nor the execution, delivery or performance of this Agreement by the
Seller, conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default (or an event,
which with notice or lapse of time or both, would constitute a default)
under (A) any terms or provisions of the articles of association or
by-laws of the Seller, (B) any term or provision of any material
agreement, contract, instrument or indenture, to which the Seller is a
party or by which the Seller or any of its property is bound or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of
any court or governmental authority having jurisdiction over the Seller
or any of its property, or results or will result in the creation or
imposition of any lien, charge or encumbrance which would have a
material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(vi) The Seller has not dealt with any broker, investment
banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans;
(vii) There is no litigation currently pending or, to the best
of the Seller's knowledge, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage
Loans, the issuance of the Certificates, the execution, delivery,
performance or enforceability of this Agreement or that would result in
a material adverse change in the financial condition of the Seller;
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(viii) Each Mortgage Note, each Mortgage, each Assignment and
any other document required to be delivered by or on behalf of the
Seller under this Agreement or the Pooling and Servicing Agreement to
the Purchaser or any assignee, transferee or designee of the Purchaser
for each Mortgage Loan has been or will be, in accordance with Section
4(b) hereof, delivered to the Purchaser or any such assignee,
transferee or designee. With respect to each Mortgage Loan, the Seller
is in possession of a complete Mortgage File in compliance with the
Pooling and Servicing Agreement, except for such documents that (A)
have been delivered (1) to the Purchaser or any assignee, transferee or
designee of the Purchaser or (2) for recording to the appropriate
public recording office and have not yet been returned or (B) are not
required to be delivered to the Purchaser or any assignee, transferee
or designee of the Purchaser until 270 days following the Closing Date
or such later date as provided in Section 4;
(ix) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in
effect in any relevant jurisdiction, except any as may have been
complied with;
(x) The form of endorsement of each Mortgage Note satisfied
the requirement, if any, of endorsement in order to transfer all right,
title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note; and each Assignment to be
delivered hereunder is in recordable form and is sufficient to effect
the assignment of and to transfer to the assignee thereunder the
benefits of the assignor, as mortgagee or assignee thereof, under each
Mortgage to which that Assignment relates;
(xi) Immediately prior to the sale of the Mortgage Loans to
the Purchaser as herein contemplated, the Seller had good title to, and
was the sole owner of, the Mortgage Loans, and such sale validly
transfers the Mortgage Loans to the Purchaser free and clear of any
pledge, lien, encumbrance or security interest;
(xii) With respect to the Mortgage Loans, the Seller hereby
represents and warrants, as of the date hereof and as of the Closing
Date, that each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code;
(xiii) The transfer of the Mortgage Loans by the Seller was
intended to be a sale and to be reported as such under United States
generally accepted accounting principles ("GAAP") and for United States
federal income tax purposes, and meets all of the requirements for such
accounting and tax treatment (except for the GAAP requirement that the
Mortgage Loans have been legally isolated from the Seller);
(xiv) In connection with the sale of the Mortgage Loans by the
Seller, the Seller (i) was solvent at all relevant times prior thereto
and has not been rendered insolvent thereby, (ii) after giving effect
thereto, is able to pay its debts as they mature, (iii) has not been
left
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with unreasonably small capital for the business in which it is engaged
and proposes 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, (vi) had a valid business reason therefor and
(vii) received new value and consideration therefor constituting
reasonably equivalent value and adequate and fair consideration; and
(xv) The Seller has not acquired, and does not intend to
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.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
RELATING TO THE MORTGAGE LOANS.
The Seller hereby represents and warrants to the Purchaser
that, as to each Mortgage Loan, as of the Closing Date (or such other date
specified herein) for such Mortgage Loan:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;
(ii) [Reserved];
(iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Closing Date, with
respect to such Mortgage Loan under the terms of the Mortgage Note have
been made and (b) the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or
indirectly, for the payment of any amount required by the Mortgage Note
or Mortgage;
(iv) To the best knowledge of the Seller, there are no
delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(v) To the best knowledge of the Seller, the terms of the
Mortgage Note and the Mortgage, have not been impaired, waived, altered
or modified in any respect, except by written instruments included in
the Mortgage File, recorded in the applicable public recording office
if necessary to maintain the lien priority of the Mortgage; the
substance of any such waiver, alteration or modification does not
affect coverage under any title insurance policy, and is reflected on
the Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed by the Seller or any other person in the
chain of title from the Seller, and no Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy,
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and the terms of which are reflected in the Mortgage Loan Schedule and
included in the related Mortgage File;
(vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vii) All buildings upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area
where the Mortgaged Property or Project is located, pursuant to
insurance policies conforming to the requirements of the Pooling and
Servicing Agreement. All such insurance policies contain a standard
mortgagee clause naming the Seller or the originator of the related
Mortgage Loan, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the
Mortgaged Property or Project was in an area identified on a Flood
Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood
insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements
of Section 3.14(a) of the Pooling and Servicing Agreement. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;
(viii) To the best knowledge of the Seller, any and all
requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures,
consumer credit protection, equal credit opportunity or disclosure laws
applicable to the origination and servicing of the Mortgage Loan have
been complied with;
(ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any
such satisfaction, cancellation, subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (a) the lien of current real
property taxes and assessments not yet due and payable, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and
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specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely affect the appraised value of the Mortgaged Property and (c)
other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates
a valid, existing and enforceable first lien and first priority
security interest on the property described therein and, as of the time
it contributed the Mortgage Loan to the Purchaser, the Seller had full
right to contribute and assign the same to the Purchaser;
(xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(xii) To the best knowledge of the Seller, all parties to the
Mortgage Note and the Mortgage had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is a natural person
who is a party to the Mortgage Note and the Mortgage is in an
individual capacity or family trust that is guaranteed by a natural
person;
(xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no
obligation for the Mortgagee to advance additional funds thereunder and
any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage have been
paid, and the Mortgagor is not entitled to any refund of any amounts
paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) As of the Closing Date and prior to the sale of the
Mortgage Loan to the Purchaser, the Seller was the sole legal,
beneficial and equitable owner of the Mortgage Note and the Mortgage
and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest;
(xv) To the best knowledge of the Seller, all parties which
have had any interest in the Mortgage Loan whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) in compliance with any
and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
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(xvi) The Mortgage Loan is covered by either (i) an ALTA
lender's title insurance policy which would be acceptable to Xxxxxx Xxx
or Xxxxxxx Mac, issued by a title insurer which would be acceptable to
Xxxxxx Xxx and Xxxxxxx Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (x)(a) and (b) above) the Seller or the
originator of the related Mortgage Loan, its successors and assigns as
to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan or (ii) an attorney's title opinion, if
customary in the related jurisdiction where the Mortgaged Property is
located. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property
or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in full force and effect
upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and the Seller has not waived any
default, breach, violation or event of acceleration;
(xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting the
related Mortgaged Property which are or may be liens prior to, or equal
or coordinate with, the lien of the related Mortgage;
(xix) All improvements which were considered in determining
the appraised value of the related Mortgaged Property lay wholly within
the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property;
(xx) The Mortgage Loan is SMMEA eligible pursuant to Section
3(a)(41) of the Exchange Act;
(xxi) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Rate. The
Mortgage Note is payable on the day of each month set forth in the
Mortgage Loan Schedule and in Monthly Payments which will amortize the
Stated Principal Balance of the Mortgage Loan over its remaining term
at the Mortgage Rate. Interest on the Mortgage Loan is calculated on
the basis of a 360-day year consisting of twelve 30-day months;
11
(xxii) The origination and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage
origination and servicing industry. The Mortgage Loan has been serviced
by the Master Servicer (directly or through a subservicer) and any
predecessor servicer in accordance with the terms of the Mortgage Note.
With respect to escrow deposits and Escrow Payments, if any, all such
payments are in the possession of, or under the control of, the Master
Servicer and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made.
No escrow deposits or Escrow Payments or other charges or payments due
the Master Servicer have been capitalized under any Mortgage or the
related Mortgage Note;
(xxiii) To the best knowledge of the Seller, the Mortgaged
Property are free of damage and waste and there is no proceeding
pending for the total or partial condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby,
including, (a) in the case of a Mortgage designated as a deed of trust,
by trustee's sale and (b) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage. The Mortgagor has not
notified the Seller and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers and Sailors
Civil Relief Act of 1940;
(xxv) The Mortgage Note is not secured by any collateral
except the lien of the corresponding Mortgage on the Mortgaged Property
and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxvi) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the
Mortgage Loan application, by a qualified appraiser, approved by the
Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan and who would meet the minimum qualifications of Xxxxxx
Mae and Xxxxxxx Mac or who met the minimum qualifications approved by
the institution that originated the related Mortgage Loan;
(xxvii) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
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(xxviii) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds
deposited in any separate account established by the Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any source
other than the Mortgagor or (c) contains any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loans are not
graduated payment mortgage loans and the Mortgage Loans do not have
shared appreciation or other contingent interest features;
(xxix) If the Mortgage Loan is a Refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required
by applicable law with respect to the making of a Refinanced Mortgage
Loan, and evidence of such receipt is and will remain in the Mortgage
File;
(xxx) With respect to each Mortgage Loan, either (i) it was
not made in connection with the construction or rehabilitation of a
Mortgaged Property or (ii) as of the Cut-off Date, the construction
phase of such Mortgage Loan has expired;
(xxxi) To the extent that the Mortgage Note, the Mortgage, the
Assignment or any other documents are required to be delivered with
respect to each Mortgage Loan pursuant to the Pooling and Servicing
Agreement, such documents have been or will be delivered to the Trustee
all in compliance with the specific requirements of the Pooling and
Servicing Agreement;
(xxxii) To the best knowledge of the Seller, the Mortgaged
Property is lawfully occupied under applicable law; all inspections,
licenses and certificates required to be made or issued with respect to
all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the
appropriate authorities;
(xxxiii) The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
(xxxiv) Any principal advances made to the Mortgagor prior to
the Cut-off 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.
The lien of the Mortgage securing the consolidated principal amount is
expressly insured as having first lien priority by a title insurance
policy or an endorsement to the policy insuring the mortgagee's
consolidated interest. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(xxxv) The Mortgage Loan was not intentionally selected by the
Seller in a manner intended to adversely affect the interest of the
Purchaser;
(xxxvi) [Reserved];
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(xxxvii) The Mortgaged Property consists of a parcel of real
property with a single family residence erected thereon, or a two to
four-family dwelling, or an individual condominium unit in a low-rise
or high-rise condominium project or an individual unit in a planned
unit development. The Mortgaged Property is improved with a Residential
Dwelling. To the best knowledge of the Seller, the Mortgaged Property
does not consist of mobile homes or manufactured homes (as defined in
the Xxxxxx Mae Originator-Servicer's Guide), except when the appraisal
indicates that the home is of comparable construction to a stick or
beam construction home, is readily marketable, has been permanently
affixed to the site and is not in a mobile home "park." The Mortgaged
Property is either a fee simple estate or a long-term residential
lease. If the Mortgage Loan is secured by a long-term residential
lease, unless otherwise specifically disclosed in the Mortgage Loan
Schedule, (A) the terms of such lease expressly permit the mortgaging
of the leasehold estate, the assignment of the lease without the
lessor's consent (or the lessor's consent has been obtained and such
consent is the Mortgage File) and the acquisition by the holder of the
Mortgage of the rights of the lessee upon foreclosure or assignment in
lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protection; (B) the terms of such lease do not
(x) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default or (y) prohibit the holder of the
Mortgage from being insured under the hazard insurance policy relating
to the Mortgaged Property; (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate
earlier than ten years after the maturity date of the Mortgage Note;
and (E) the Mortgaged Property is located in a jurisdiction in which
the use of leasehold estates for residential properties is an accepted
practice;
(xxxviii) [Reserved];
(xxxix) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a 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, at the option of the Mortgagee;
(xl) To the best knowledge of the Seller, no error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect
to a Mortgage Loan has taken place on the part of any person,
including, without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of
the Mortgage Loan or in the application of any insurance in relation to
such Mortgage Loan; and
(xli) With respect to any assumption, modification,
consolidation or extension agreements, such agreement has been recorded
by the Seller if required under applicable law.
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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 impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of the Certificates
evidencing an interest in all or a portion of the Mortgage Loans. With respect
to the representations and warranties contained herein which are made to the
knowledge or the best of knowledge of the Seller, or as to which the Seller has
no knowledge, if it is discovered that the substance of any such representation
and warranty was inaccurate as of the date such representation and warranty was
made or deemed to be made, and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan or the interest therein of the Purchaser
or the Purchaser's assignee, transferee or designee, then notwithstanding the
lack of knowledge by the Seller with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, the Seller shall take such action described in the following
paragraph in respect of such Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller as part of any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that, in each case, materially and adversely
affects the value of any Mortgage Loan, the Purchaser or the Purchaser's
assignee, transferee or designee or the party discovering the breach shall give
prompt written notice to the Seller. 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 breach of a representation and warranty, the Seller
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall within
ninety (90) days of its discovery or receipt of notice, either (i) repurchase
the affected Mortgage Loan at the Purchase Price (as 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. With respect to
Mortgage Loans where the Mortgage File is missing a material document that was
transferred from the Seller to the Purchaser, the Purchaser or the Purchaser's
assignee, transferee or designee, the party discovering such breach shall give
prompt written notice to the Seller. The Seller shall amend the Mortgage Loan
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 Seller shall deliver to the Purchaser
such amended Closing Schedule and shall deliver such other documents as are
required by this Agreement or the Pooling and Servicing Agreement within five
(5) days of any such amendment. Any repurchase pursuant to this Section 7(a)
shall be accomplished by deposit in the Collection Account of the amount of the
Purchase Price (as
15
defined in the Pooling and Servicing Agreement) in accordance with Section 2.03
of the Pooling and Servicing Agreement. 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.
(b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, repurchase or substitute for a
defective Mortgage Loan constitute the sole remedies of the Purchaser against
the Seller, 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 Seller 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
Seller 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
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; and
(d) All other terms and conditions of this Agreement shall
have been complied with in all material respects.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
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.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof,
16
the closing shall be subject to delivery of each of the following documents:
(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 a form acceptable to the Purchaser, and
attached thereto copies of the articles of association, by-laws and
certificate of existence of the Seller;
(b) An Officer's Certificate of the Seller, dated the Closing
Date, upon which the Purchaser and the Underwriter may rely, in a form
acceptable to the Purchaser, 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, in a form
acceptable to the Purchaser;
(d) Such opinions of counsel as the Rating Agencies or the
Trustee may request in connection with the sale of the Mortgage Loans
by the Seller to the Purchaser or the Seller's execution and delivery
of, or performance under, this Agreement;
(e) A letter from Deloitte & Touche, 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 Purchaser's Prospectus Supplement,
dated March 21, 2003 under the subheadings "Summary of Prospectus
Supplement--The Mortgage Loans," "Risk Factors" (to the extent of
information regarding the Mortgage Loans therein) and "The Mortgage
Pool" agrees with the records of the Seller;
(f) A letter from KPMG LLP, 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 Purchaser's Prospectus Supplement, dated March 21,
2003 under the subheading "The Mortgage Pool--The Seller" agrees with
the records of the Seller and certain information of an accounting,
financial or statistical nature set forth in the Prospectus Supplement
under the subheading "Pooling and Servicing Agreement--The Master
Servicer" agrees with the records of the Master Servicer; and
(g) 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 necessary and reasonable costs and expenses incurred
directly in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, recording fees, fees for title policy endorsements
and continuations and the fees for recording Assignments, the costs and expenses
of printing (or
17
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 set forth in an engagement
letter delivered to the Seller by the Trustee, the fees and expenses of the
Depositor'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
fees charged by any rating agency to rate the Certificates and the ongoing
expenses of the Rating Agencies. All other costs and expenses in connection with
the transactions contemplated hereunder shall be borne by the party incurring
such expense.
SECTION 11. INDEMNIFICATION.
(a) The Seller shall indemnify and hold harmless each of (i)
the Purchaser, (ii) the Underwriter, (iii) the Person, if any, to which the
Purchaser assigns its rights in and to a Mortgage Loan and each of their
respective successors and assigns and (iv) each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act") ((i) through (iv) collectively, the "Seller Indemnified
Party") against any and all losses, claims, expenses, damages or liabilities to
which the Seller Indemnified Party may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, expenses, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement or any private placement memorandum relating to the
offering by the Purchaser or an affiliate thereof, of the NBC Certificates, or
the omission or the alleged omission to state therein any material fact
necessary in order to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with (i) information furnished in writing to the Purchaser or any
of its affiliates by the Seller or any of its affiliates specifically for use
therein, which shall include, with respect to the Prospectus Supplement, the
information set forth under the captions "Summary--The Mortgage Loans," "Risk
Factors" (to the extent of information concerning the Mortgage Loans contained
therein), "The Mortgage Pool" and "Pooling and Servicing Agreement--The Master
Servicer" and, with respect to any private placement memorandum (with respect to
the NBC Certificates), any information of a comparable nature furnished in
writing to the Purchaser or any of its affiliates by the Seller or any of its
affiliates specifically for use therein (the "Seller's Information"), or (ii)
the data files containing information with respect to the Mortgage Loans as
transmitted by modem to the Purchaser by the Seller or any of its affiliates (as
such transmitted information may have been amended in writing by the Seller or
any of its affiliates with the written consent of the Purchaser subsequent to
such transmission), (b) any representation, warranty or covenant made by the
Seller or any affiliate of the Seller herein or in the Pooling and Servicing
Agreement, on which the Purchaser has relied, being, or alleged to be, untrue or
incorrect or (c) any updated collateral information provided by the Underwriter
to a purchaser of the Certificates accurately derived from the data contained in
clause (ii) and the Remittance Report or a current collateral tape obtained from
the Seller or an affiliate of the Seller, including the current loan balances of
the Mortgage Loans; provided, however, that to the extent that any such losses,
18
claims, expenses, damages or liabilities to which the Seller Indemnified Party
may become subject arise out of or are based upon both (1) statements,
omissions, representations, warranties or covenants of the Seller described in
clause (a), (b) or (c) above and (2) any other factual basis, the Seller shall
indemnify and hold harmless the Seller Indemnified Party only to the extent that
the losses, claims, expenses, damages, or liabilities of the person or persons
asserting the claim are determined to rise from or be based upon matters set
forth in clause (1) above and do not result from the gross negligence or willful
misconduct of such Seller Indemnified Party. This indemnity shall be in addition
to any liability that the Seller may otherwise have.
(b) The Purchaser shall indemnify and hold harmless each of
(i) the Seller and (ii) each person, if any, who controls the Seller within the
meaning of Section 15 of the 1933 Act ((i) and (ii) collectively, the "Purchaser
Indemnified Party") against any and all losses, claims, expenses, damages or
liabilities to which the Purchaser 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 any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement or any private placement memorandum relating to the
offering by the Purchaser or an affiliate thereof, of the NBC Certificates, or
the omission or the alleged omission to state therein any material fact
necessary in order to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission does not relate to the Seller's
Information; provided, however, that to the extent that any such losses, claims,
expenses, damages or liabilities to which the Purchaser Indemnified Party may
become subject arise out of or are based upon both (1) statements, omissions,
representations, warranties or covenants of the Purchaser described above and
(2) any other factual basis, the Purchaser shall indemnify and hold harmless the
Purchaser Indemnified Party only to the extent that the losses, claims,
expenses, damages, or liabilities of the person or persons asserting the claim
are determined to rise from or be based upon matters set forth in clause (1)
above and do not result from the gross negligence or willful misconduct of such
Purchaser Indemnified Party. This indemnity shall be in addition to any
liability that the Purchaser may otherwise have.
(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 Section 11(a) or 11(b) 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
19
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 Section 11(a) and by the Seller,
in the case of parties indemnified pursuant to Section 11(b). 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 under Section 11(a) or 11(b) 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.
(e) The Purchaser and the Seller agree that it would not be
just and equitable if contribution pursuant to 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 Section 11(d) above. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in this Section 11 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 Section 11, 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
20
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.
(f) The indemnity and contribution agreements contained in
this Section 11 shall remain operative and in full force and effect regardless
of (i) any investigation made by the Purchaser or any person controlling the
Purchaser or by or on behalf of the Seller and their respective directors or
officers or any person controlling the Seller and (ii) acceptance of and payment
for the Mortgage Loans.
SECTION 12. 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, either
(i) 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 (ii) 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;
provided, however, in the case of any such nonpayment described in clause (i)
above, such redelivery shall not diminish any other rights or remedies that the
Seller may have against the Purchaser.
SECTION 13. 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
21
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, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Finance Group, or such other address as may hereafter be furnished to the Seller
in writing by the Purchaser; if to the Seller, addressed to the Seller at Xxx
Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, Attention: Legal, or to such other address
as the Seller may designate in writing to the Purchaser.
SECTION 14. 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 15. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.
SECTION 16. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 17. RESERVED.
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
22
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 conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
23
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:_______________________________
Name:
Title:
NATIONAL BANK OF COMMERCE
By:_______________________________
Name:
Title:
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: Salomon Mortgage Loan Trust, Series 2003-NBC1,
Mortgage Pass-Through Certificates
The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Mortgage Pass-Through Certificates, Series 2003-NBC1 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 March 1, 2003, among the Trustee, the Depositor
and the Master Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, 20__, 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
E-1-2
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:
NATIONAL BANK OF COMMERCE
By:__________________________
Name:
Title:
E-1-3
EXHIBIT E-2
-----------
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2003-NBC1
___________________________________________________ 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
E-2-1
EXHIBIT F-1
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
[______]
Re: Salomon Mortgage Loan Trust, Series 2003-NBC1,
Mortgage Pass-Through Certificates, 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
March 1, 2003, among Salomon Brothers Mortgage Securities VII, Inc. as
Depositor, National Bank of Commerce as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association as Trustee (the "Pooling and Servicing
Agreement"), pursuant to which Pooling and Servicing Agreement the Certificates
were issued.
F-1-1
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:
F-1-2
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
[___________]
Re: Salomon Mortgage Loan Trust, Series 2003-NBC1,
Mortgage Pass-Through Certificates, Class ___,
representing a ___% 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.
F-1-3
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of March 1, 2003, among Salomon Brothers Mortgage Securities
VII, Inc. as Depositor, National Bank of Commerce as Master Servicer and Xxxxx
Fargo Bank Minnesota, National Association as Trustee, pursuant to which the
Certificates were issued.
[TRANSFEREE]
By:__________________________
Name:
Title:
F-1-4
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 Xxxxx Fargo 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
___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the
--------
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.
F-1-5
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?
F-1-6
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:
F-1-7
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 Xxxxx Fargo 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
F-1-8
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
F-1-9
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:____________________________
Name:
Title:
Date of this certificate:
Date of information provided in paragraph 3
F-1-10
EXHIBIT F-2
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
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 Mortgage
Loan Trust, Series 2003-NBC1, Mortgage Pass-Through Certificates, Class R-[__]
Certificates, (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
____________, 20__ 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
F-2-1
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.
F-2-2
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.
F-2-3
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
__________, 20__.
[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 __________,
20___.
____________________________
Notary Public
County of __________________
State of ___________________
My Commission expires:
F-2-4
FORM OF TRANSFEROR AFFIDAVIT
----------------------------
STATE OF NEW YORK )
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-[__] Certificates
(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.
F-2-5
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
___________, 20__.
[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 __________,
20___.
____________________________
Notary Public
County of __________________
State of ___________________
My Commission expires:
F-2-6
EXHIBIT G
---------
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 20__
Salomon Brothers Mortgage Securities VII, Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
[_____]
Re: Salomon Mortgage Loan Trust, Series 2003-NBC1,
Mortgage Pass-Through Certificates, Class ___
Dear Sirs:
_______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of Salomon Mortgage Loan Trust, Series 2003-NBC1, Mortgage
Pass-Through Certificates, Class ___ (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of March 1, 2003, among Salomon Brothers Mortgage Securities VII, Inc. as
depositor (the "Depositor"), National Bank of Commerce as master servicer (the
"Master Servicer") and Xxxxx Fargo 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 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.
G-1
Very truly yours,
_______________________________
By:____________________________
Name:
Title:
G-2
EXHIBIT H-1
FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER WITH FORM
10-K
Re: Salomon Brothers Mortgage Securities VII Inc. Salomon
Mortgage Loan Trust, Series 2003-NBC1, Mortgage
Pass-Through Certificates
-----------------------------------------------------
I, _________________________, certify that:
1. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Salomon Brothers Mortgage Securities VII Inc. with respect to Salomon Mortgage
Loan Trust, Series 2003-NBC1 (the "Registrant");
2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information, and
the servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement, is included in these
reports;
4. I am responsible for reviewing the activities performed by
the Master Servicer under the Pooling and Servicing Agreement and based upon the
review required under the Pooling and Servicing Agreement, and except as
disclosed in the report, the Master Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and
5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Master Servicer's
compliance with the minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Pooling and Servicing Agreement.
H-1
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated March 1,
2003 (the "Pooling and Servicing Agreement"), among the Registrant as Depositor,
National Bank of Commerce as master servicer and Xxxxx Fargo Bank Minnesota,
National Association as trustee.
________________, as Master Servicer
By:____________________________
Name:
Title:
X-0
XXXXXXX X-0
FORM OF CERTIFICATION TO BE PROVIDED TO THE MASTER SERVICER BY THE
TRUSTEE
National Bank of Commerce
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Salomon Brothers Mortgage Securities VII Inc.,
Salomon Loan Trust, Series 2003-NBC1, Mortgage
Pass-Through Certificates
----------------------------------------------
Reference is made to the Pooling and Servicing Agreement,
dated as of March 1, 2003, among Salomon Brothers Mortgage Securities VII, Inc.
as Depositor, National Bank of Commerce as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association as Trustee (the "Pooling and Servicing
Agreement"). The Trustee, hereby certifies to the Master Servicer, and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(i) The Trustee has reviewed the annual report on Form 10-K
for the fiscal year [ ], and all reports on Form 8-K containing distribution
reports filed in respect of periods included in the year covered by that annual
report, relating to the above-referenced trust;
(ii) Based solely upon the information provided to us by the
Master Servicer, the information set forth in the reports referenced in (i)
above does not contain any untrue statement of material fact; and
(iii) Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.
Date:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:____________________________
Name:
Title:
H-3
Schedule 1
----------
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
S-1-1
