EXHIBIT 4.5
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WILSHIRE REIT TRUST SERIES 1998-1
Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Indenture Trustee
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INDENTURE
Dated as of September 1, 1998
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ASSET-BACKED FLOATING RATE NOTES
SERIES 1998-11
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TABLE OF CONTENTS
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Section Page
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ARTICLE I
Definitions
1.01 Definitions...........................................................3
1.02 Incorporation by Reference of Trust Indenture Act.....................3
1.03 Rules of Construction.................................................3
ARTICLE II
Original Issuance of Notes
2.01. Form...................................................................5
2.02. Execution, Authentication and Delivery.................................5
2.03. Acceptance of Mortgage Loans by Indenture Trustee......................6
ARTICLE III
Covenants
3.01. Collection of Payments With Respect to the Mortgage Loans.............11
3.02. Maintenance of Office or Agency.......................................11
3.03. Money For Payments to be Held in Trust; Paying Agent..................11
3.04. Existence.............................................................12
3.05. Payment of Interest And Principal.....................................13
3.06. Allocation of Realized Losses.........................................17
3.07. Protection of Trust Estate............................................17
3.08. Opinions As to Trust Estate...........................................18
3.09. Performance of Obligations............................................18
3.10. Negative Covenants....................................................19
3.11. Annual Statement as to Compliance.....................................19
3.12. [Reserved]............................................................19
3.13. Representations and Warranties Concerning the Mortgage Loans..........19
3.14. Amendments to Servicing Agreements....................................20
3.15. Servicers as Agent and Bailee of the Indenture Trustee................20
3.16. Investment Company Act................................................20
3.17. Issuer May Consolidate, Etc...........................................20
3.18. Successor or Transferee...............................................22
3.19. No Other Business.....................................................22
3.20. No Borrowing..........................................................22
3.21. Guarantees, Loans, Advances and Other Liabilities.....................22
3.22. Capital Expenditures..................................................23
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3.23. [Reserved]............................................................23
3.24. Restricted Payments...................................................23
3.25. Notice of Events of Default...........................................23
3.26. Further Instruments and Acts..........................................23
3.27. Statements to Noteholders.............................................23
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
4.01 The Notes.............................................................24
4.02 Registration of And Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar..................................24
4.03 Mutilated, Destroyed, Lost or Stolen Notes............................25
4.04 Persons Deemed Owners.................................................26
4.05 Cancellation..........................................................26
4.06 Book-Entry Notes......................................................26
4.07 Notices to Depository.................................................27
4.08 Definitive Notes......................................................27
4.09 Tax Treatment.........................................................27
4.10 Satisfaction and Discharge Of Indenture...............................28
4.11 Application of Trust Money............................................29
4.12 Repayment of Monies Held by Paying Agent..............................29
4.13 Temporary Notes.......................................................29
ARTICLE V
Default and Remedies
5.01 Events of Default.....................................................30
5.02 Acceleration of Maturity; Rescission and Annulment....................30
5.03 Collection of Indebtedness And Suits for Enforcement By
Indenture Trustee.....................................................31
5.04 Remedies; Priorities..................................................33
5.05 Optional Preservation of the Trust Estate.............................35
5.06 Limitation of Suits...................................................36
5.07 Unconditional Rights of Noteholders to Receive Principal and Interest.36
5.08 Restoration of Rights and Remedies....................................36
5.09 Rights and Remedies Cumulative........................................37
5.10 Delay or Omission Not a Waiver........................................37
5.11 Control by Noteholders................................................37
5.12 Waiver of Past Defaults...............................................38
5.13 Undertaking for Costs.................................................38
5.14 Waiver of Stay or Extension Laws......................................38
5.15 Sale of Trust Estate..................................................38
5.16 Action on Notes.......................................................40
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ARTICLE VI
The Indenture Trustee
6.01 Duties of Indenture Trustee...........................................42
6.02 Rights of Indenture Trustee...........................................43
6.03 Individual Rights of Indenture Trustee................................44
6.04 Indenture Trustee's Disclaimer........................................44
6.05 Notice of Event of Default............................................44
6.06 Tax Administration of the Issuer......................................44
6.07 Payment of Fees, Compensation and Indemnity...........................44
6.08 Replacement of Indenture Trustee......................................45
6.09 Successor Indenture Trustee by Merger.................................46
6.10 Appointment of Co-indenture Trustee or Separate Indenture Trustee.....46
6.11 Eligibility; Disqualification.........................................47
6.12 Preferential Collection of Claims Against Issuer......................48
6.13 Representations and Warranties........................................48
6.14 Directions to Indenture Trustee.......................................48
6.15 The Agents............................................................49
6.16 Appointment Of Custodians.............................................49
ARTICLE VII
Noteholders' Lists and Reports
7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders...........................................................49
7.02. Preservation of Information; Communications to Noteholders............49
7.03. Reports by the Indenture Trustee; Issuer Fiscal Year..................50
7.04. Reports by Indenture Trustee..........................................51
7.05. Statements to Noteholders.............................................52
7.06. Books and Records.....................................................54
ARTICLE VIII
Accounts, Disbursements and Releases
8.01 Collection of Money...................................................55
8.02 Trust Accounts........................................................55
8.03 Officer's Certificate.................................................55
8.04 Termination Upon Payment to Noteholders...............................56
8.05 Release of Trust Estate...............................................56
8.06 Surrender of Notes Upon Final Payment.................................56
8.07 Optional Redemption of the Notes......................................56
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ARTICLE IX
Supplemental Indentures
9.01 Supplemental Indentures Without Consent of Noteholders................58
9.02 Supplemental Indentures With Consent of Noteholders...................59
9.03 Execution of Supplemental Indentures..................................60
9.04 Effect of Supplemental Indenture......................................61
9.05 Conformity with Trust Indenture Act...................................61
9.06 Reference in Notes to Supplemental Indentures.........................61
ARTICLE X
Miscellaneous
10.01 Compliance Certificates and Opinions, etc.............................62
10.02 Form of Documents Delivered to Indenture Trustee......................63
10.03 Acts of Noteholders...................................................64
10.04 Notices, Etc., to Indenture Trustee, Issuer and Rating Agencies.......64
10.05 Notices to Noteholders; Waiver........................................65
10.06 Conflict with Trust Indenture Act.....................................66
10.07 Effect of Headings....................................................66
10.08 Successors and Assigns................................................66
10.09 Separability..........................................................66
10.10 Legal Holidays........................................................67
10.11 Governing Law.........................................................67
10.12 Counterparts..........................................................67
10.13 Recording of Indenture................................................67
10.14 Issuer Obligation.....................................................67
10.15 No Petition...........................................................67
10.16 Inspection............................................................68
10.17 Limited Third-Party Beneficiary.......................................68
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EXHIBITS
Appendix A Definitions
Exhibit A-1 Form of Class A Note
Exhibit A-2 Form of Class M-1 Note
Exhibit A-3 Form of Class M-2 Note
Exhibit A-4 Form of Class M-3 Note
Exhibit B-1 Form of Trustee's Initial Certification
Exhibit B-2 Form of Trustee's Final Certification
Exhibit C Form of Custodial Agreement
Schedule 1 Mortgage Loan Schedule
Schedule 2 Schedule of Mortgage Loans from Series 1996-LB3
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This Indenture, dated as of September 1, 1998, between Wilshire REIT
Trust Series 1998-1, a Delaware business trust as Issuer (the "Issuer") and
Norwest Bank Minnesota, National Association, a national banking association as
Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the benefit of the Holders of the Salomon Brothers Mortgage Securities
VII, Inc. Asset-Backed Floating Rate Notes, Series 1998-11 (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes and Financial Security
Assurance Inc., all of the Issuer's right, title and interest in and to whether
now existing or hereafter created by (a) the Original Mortgage Loans, the
Qualified Substitute Mortgage Loans and the proceeds thereof and all rights
under the Related Documents (including the related Mortgage Files); (b) all
funds on deposit from time to time in the Collection Accounts allocable to the
Mortgage Loans excluding any investment income from such funds; (c) all funds on
deposit from time to time in the Payment Account and in all proceeds thereof,
including any income on funds deposited in, or investments made with funds
deposited in, the Payment Account, which income shall belong to, and be for the
account of, the Indenture Trustee; (d) all rights under the (i) Mortgage Loan
Purchase Agreement as assigned to the Issuer, (ii) the Ownership Transfer
Agreement as assigned to the Issuer, (iii) the Servicing Agreements and (iv) any
title and hazard insurance policies with respect to the Mortgaged Properties;
and (e) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under, and all
proceeds of every kind and nature whatsoever in respect of, any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").
The foregoing Grant is made in trust to secure (i) the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, (ii) the payment of the Expense Fee to Financial Security Assurance Inc.,
(iii) the payment of all other amounts payable under this Indenture and (iv)
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
The Indenture Trustee further acknowledges that in the event (i) the transfer of
the Mortgage Loans from the Seller to the Transferor pursuant to the Mortgage
Loan Purchase
Agreement is determined to be a financing; (ii) the transfer of the Mortgage
Loans from the Transferor to the Depositor pursuant to the Ownership Transfer
Agreement is determined to be a financing; and/or (iii) the transfer of the
Mortgage Loans from the Depositor to the Issuer pursuant to the Owner Trust
Agreement is determined to be a financing, then in each case the Indenture
Trustee holds the Mortgage Loans as the designee and bailee of the Transferor,
the Depositor and the Issuer, respectively, subject however, in each case, to a
prior lien in favor of the Noteholders pursuant to the terms of this Indenture
(and a prior lien in favor of Financial Security Assurance Inc, to the extent of
the Expense Fee).
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ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the definitions attached hereto as Appendix A, which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA by reference to another statute or defined by Commission rules,
have the meanings assigned to them by such definitions.
Section 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
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(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
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ARTICLE II
Original Issuance of Notes
Section 2.01. FORM. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth in
Exhibits A-1 through A-4, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).
The terms of the Notes set forth in Exhibits A-1 through A-4 are part of
the terms of this Indenture.
Section 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver
Notes for original issue in an aggregate initial Note Balance of $374,189,000.
The Notes shall be divided among four classes, having designations, initial Note
Balances, Note Interest Rates and Final Maturity Dates as follows:
Designation Note Interest Rate Initial Note Balance Final Maturity Date
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Class A Variable(1) $309,824,000 October 2028
Class M-1 Variable(1) $26,280,000 October 2028
Class M-2 Variable(1) $16,186,000 October 2028
Class M-3 Variable(1) $21,899,000 October 2028
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(1) Calculated in accordance with the definition of "Note Interest Rate" herein.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes and the Notes shall be issuable in the minimum
initial Note Balances of $10,000 and in integral multiples of $1.00 in excess
thereof.
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No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.03. ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a) The
Indenture Trustee acknowledges receipt of (or, with respect to Mortgage Loans
subject to a Custodial Agreement, receipt by the respective Custodian as the
duly appointed agent of the Indenture Trustee), the following documents or
instruments with respect to each Mortgage Loan transferred to the Indenture
Trustee pursuant to the Granting Clause:
(i) the original Mortgage Note, endorsed in one of the following
forms: (i) "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee, without recourse," (ii) "Pay to the order of
Norwest Bank Minnesota, National Association, as Trustee for the
registered holders of Salomon Brothers Mortgage Securities VII, Inc.,
Series 1996-LB3, without recourse" or (iii) "Pay to the order of
Norwest Bank Minnesota, National Association, as Trustee for the
registered holders of Salomon Brothers Mortgage Securities VII, Inc.,
Series 1997-LB1, without recourse, in each case with all prior and
intervening endorsements showing a complete chain of endorsement from
the originator to the Person so endorsing in the form as provided
above;
(ii) the original Mortgage with evidence of recording xxxxxxx,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon;
(iii) an original Assignment of the Mortgage executed in one of
the following forms: (i) "Norwest Bank Minnesota, National
Association, as Trustee", (ii) "Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., Series 1996-LB3" or (iii) "Norwest Bank
Minnesota, National Association, as Trustee for the registered holders
of Salomon Brothers Mortgage Securities VII, Inc., Series 1997-LB1";
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to
the Person assigning the Mortgage to the Indenture Trustee as
contemplated by the immediately preceding clause (iii);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy, together with
all endorsements or riders which were issued with or subsequent to the
issuance of such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged
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Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is unavailable,
a written commitment or uniform binder or preliminary report of title
issued by the title insurance or escrow company.
The Issuer, at the expense of the Seller, shall promptly (and in no
event later than five Business Days following the later of the Closing Date and
the date of receipt by the Issuer of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust
Estate, the Indenture Trustee or the Owner Trustee, in the appropriate public
office for real property records, each Assignment referred to in Sections
2.03(a)(iii) and (a)(iv) above. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Issuer, 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.
If any of the documents referred to in Sections 2.03(a)(ii), (a)(iii)
or (a)(iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Issuer to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Indenture Trustee, or to the
appropriate Custodian on behalf of the Indenture Trustee, of a copy of each such
document certified by the Seller in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by the Seller, delivery to the Indenture Trustee, or to the
appropriate Custodian on behalf of the Indenture Trustee, promptly upon receipt
thereof of either the original or a copy of such document certified by the
applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy was not delivered
pursuant to Section 2.03(a)(vi) above, the Issuer shall deliver or cause to be
delivered to the Indenture Trustee, or to the appropriate Custodian on behalf of
the Indenture Trustee, promptly after receipt thereof, the original lender's
title insurance policy. The Issuer shall deliver or cause to be delivered to the
Indenture Trustee, or to the appropriate Custodian on behalf of the Indenture
Trustee, promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with respect to any Mortgage Loan, including,
but not limited to, any original documents evidencing an assumption or
modification of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Indenture Trustee, or to the appropriate Custodian on behalf of
the Indenture Trustee, are and shall be held by or on behalf of the Seller, the
Transferor, the Depositor or the Issuer, as the case may be, in trust for the
benefit of the Indenture Trustee on behalf of the Noteholders. 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
Indenture Trustee, or to the appropriate Custodian on behalf of the Indenture
Trustee. Any such original document delivered to or held by the Issuer 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.
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(b) Subject to the provisions of Section 2.03(a) and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Indenture Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, receipt by the respective Custodian as the
duly appointed agent of the Indenture Trustee) of the documents referred to in
Section 2.03(a) (other than such documents described in Section 2.03(a)(v))
above and all other assets included in the definition of the "Trust Estate" as
set forth in the Granting Clause of this Indenture (to the extent of amounts
deposited into the Payment Account) and declares that it, or such Custodian as
its agent, holds and will hold such documents and the other documents delivered
to it constituting the Mortgage File, and that it holds or will hold all such
assets and such other assets included in the definition of the "Trust Estate" in
trust for the exclusive use and benefit of all present and future Noteholders.
(c) The Indenture Trustee agrees, for the benefit of the Noteholders,
to review (or cause a Custodian on its behalf to review) each Mortgage File on
or before the Closing Date and to certify in substantially the form attached
hereto as Exhibit B-1 (or cause the Custodian to certify in the form of the
Initial Certification attached to the Custodial Agreement) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.03(a)(v)) required to be delivered to it pursuant to this
Indenture are in its possession, (ii) such documents have been reviewed by it or
such Custodian and appear regular on their face and relate to such Mortgage
Loan, (iii) based on its or the Custodian's examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i) through (iii), (vi), (ix), (x), (xiii), (xvi) and
(xvii) through (xx) of the definition of "Mortgage Loan Schedule" accurately
reflects information set forth in the Mortgage File. It is herein acknowledged
that, in conducting such review, the Indenture Trustee or such Custodian was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face, or (ii) to determine whether any Mortgage File should
include any of the documents specified in Section 2.03(a)(v).
Prior to the first anniversary date of this Indenture, the Indenture
Trustee shall deliver to the Seller, the Depositor and the Issuer a final
certification in the form annexed hereto as Exhibit B-2 (or shall cause the
Custodian to deliver to the Indenture Trustee, the Seller, the Depositor and the
Issuer a final certification in the form attached to the Custodial Agreement)
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Indenture Trustee or any Custodian finds any document or documents constituting
a part of a Mortgage File to be missing or defective in any material respect, at
the conclusion of its review the Indenture Trustee (or a Custodian on behalf of
the Indenture Trustee) shall so notify the Seller, the Issuer and the Depositor.
In addition, upon the discovery by the Issuer or the Indenture Trustee of a
breach of any of the representations and warranties made by the Seller in the
Mortgage Loan Purchase Agreement in respect of any
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Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Noteholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Indenture Trustee (or a Custodian on behalf of the Indenture
Trustee) shall, at the written request and expense of any Noteholder, provide a
written report to such Noteholder of all Mortgage Files released to the related
Servicer for servicing purposes.
(d) As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans in accordance with the requirements
of the Mortgage Loan Purchase Agreement and the related Servicing Agreement,
such substitution shall be effected by the Issuer delivering or causing to be
delivered to the Indenture Trustee (or a Custodian on behalf of the Indenture
Trustee), for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Indenture Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.03(a), together with an Officers' Certificate from the
Seller providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with each such substitution. The
Indenture Trustee (or a Custodian on behalf of the Indenture 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 2.03(c) and deliver to the Seller, the Depositor and the Issuer, with
respect to such Qualified Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit B-1 (or cause the Custodian
to certify in the form of the Initial Certification attached to the Custodial
Agreement), with any applicable exceptions noted thereon. Within one year of the
date of substitution, the Indenture Trustee shall deliver to the Seller, the
Issuer and the Depositor a certification substantially in the form of Exhibit
B-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans (or
shall cause the Custodian to deliver to the Indenture Trustee, the Seller, the
Depositor and the Issuer a final certification in the form attached to the
Custodial Agreement), with any applicable exceptions noted thereon. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in the month of
substitution are not part of the Trust Estate and will be retained by the
Seller. For the month of substitution, payments to Noteholders will reflect the
Monthly Payment due on such Deleted Mortgage Loan on 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
Indenture Trustee shall give or cause to be given written notice to the
Noteholders that such substitution has taken place, shall amend the Mortgage
Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the
terms of this Indenture and the substitution of the Qualified Substitute
Mortgage Loan or Loans. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Trust Estate and shall be
subject in all respects to the terms of this Indenture, the related Servicing
Agreement and the Mortgage Loan Purchase Agreement, including all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement as of the date of substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the related
Servicer or Master Servicer
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(as provided in the related Servicing Agreement) will determine the amount (with
respect to each Qualified Substitute Mortgage Loan, the "Substitution Shortfall
Amount"), if any, by which the Purchase Price of each such Deleted Mortgage Loan
exceeds, 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 Mortgage
Loan Remittance Rate. On the date of such substitution the Seller will deliver
or cause to be delivered to the related Servicer or Master Servicer (as provided
in the related Servicing Agreement) for deposit in the related Collection
Account an amount equal to the applicable Substitution Shortfall Amounts, if
any.
(e) The Indenture Trustee or a Custodian on its behalf, upon receipt of
written certification from the related Servicer or Master Servicer (as provided
in the related Servicing Agreement) of deposit of the Purchase Price, in the
case of a repurchased Mortgage Loan or upon receipt of the related Qualified
Substitute Mortgage Loan or Loans and certification from the related Servicer or
Master Servicer (as provided in the related Servicing Agreement) of deposit of
the applicable Substitution Shortfall Amounts, 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
furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan
released pursuant hereto, and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File.
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ARTICLE III
Covenants
Section 3.01. COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.
The Indenture Trustee shall establish and maintain an Eligible Account (the
"Payment Account"), held in trust for the benefit of the Noteholders. The
Indenture Trustee shall, subject to the terms of this paragraph, deposit in the
Payment Account, on the date of receipt (if received prior to 3:00 p.m. Eastern
Time, and if not, then on the Business Day following receipt) from the related
Servicer, each remittance received by the Indenture Trustee with respect to the
Mortgage Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Notes, subject to Section 3.03, as provided in Section 3.05
from monies on deposit in the Payment Account.
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
within the United States of America, an office or agency where, subject to
satisfaction of conditions set forth herein, Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Indenture Trustee, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
Section 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent it hereby so agrees), subject to the provisions of this Section
3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
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(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; and
(vi) not commence a bankruptcy proceeding against the Issuer in
connection with this Indenture.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer upon receipt of an Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer. The Indenture Trustee may also
adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).
Section 3.04. EXISTENCE. The Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any
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successor Issuer hereunder is or becomes, organized under the laws of any other
state or of the United States of America, in which case the Issuer will keep in
full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, the Notes, the
Mortgage Loans and each other instrument or agreement included in the Trust
Estate.
Section 3.05. PAYMENT OF INTEREST AND PRINCIPAL. (a)(1) On each Payment
Date, the Indenture Trustee shall withdraw from the Payment Account an amount
equal to the Current Interest Payment Amount and pay to the Noteholders the
following amounts, in the following order of priority:
(i) to the Holders of the Class A Notes, an amount equal to the
Interest Payment Amount allocable to the Class A Notes;
(ii) to the extent of the Current Interest Payment Amount
remaining after payment of the Interest Payment Amount allocable to the
Class A Notes, to the Holders of the Class M-1 Notes, an amount equal to
the Interest Payment Amount allocable to the Class M-1 Notes;
(iii) to the extent of the Current Interest Payment Amount
remaining after payment of the Interest Payment Amounts allocable to the
Class A Notes and the Class M-1 Notes, to the Holders of the Class M-2
Notes, an amount equal to the Interest Payment Amount allocable to the
Class M-2 Notes;
(iv) to the extent of the Current Interest Payment Amount
remaining after payment of the Interest Payment Amounts allocable to the
Class A Notes, the Class M-1 Notes and the Class M-2 Notes, to the Holders
of the Class M-3 Notes, an amount equal to the Interest Payment Amount
allocable to the Class M-3 Notes.
(2) On each Payment Date, the Indenture Trustee shall withdraw from
the Payment Account an amount equal to the Principal Payment Amount and pay to
the Noteholders the following amounts, in the following order of priority:
(i) On each Payment Date (a) prior to the Stepdown Date, (b) on
which a Trigger Event is in effect or (c) on the Final Maturity Date,
the Principal Payment Amount shall be distributed in the following
order of priority:
FIRST, to the Holders of the Class A Notes, until the Note
Balance of such Class has been reduced to zero;
SECOND, to the Holders of the Class M-1 Notes, until the Note
Balance of such Class has been reduced to zero;
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THIRD, to the Holders of the Class M-2 Notes, until the Note
Balance of such Class has been reduced to zero; and
FOURTH, to the Holders of the Class M-3 Notes, until the Note
Balance of such Class has been reduced to zero.
(ii) On each Payment Date (other than the Final Maturity Date)
(a) on or after the Stepdown Date and (b) on which a Trigger Event is
not in effect, the Principal Payment Amount shall be distributed in
the following order of priority:
FIRST, the lesser of (x) the Principal Payment Amount and (y) the
Class A Principal Payment Amount shall be distributed to the
Holders of the Class A Notes, until the Note Balance of such
Class has been reduced to zero;
SECOND, the lesser of (x) the excess of (i) the Principal Payment
Amount over (ii) the amount distributed to the Holders of the
Class A Notes pursuant to clause FIRST above and (y) the Class
M-1 Principal Payment Amount shall be distributed to the Holders
of the Class M-1 Notes, until the Note Balance of such Class has
been reduced to zero;
THIRD, the lesser of (x) the excess of (i) the Principal Payment
Amount over (ii) the sum of the amounts distributed to the
Holders of the Class A Notes pursuant to clause FIRST above and
to the Holders of the Class M-1 Notes pursuant to clause SECOND
above and (y) the Class M-2 Principal Payment Amount shall be
distributed to the Holders of the Class M-2 Notes, until the Note
Balance of such Class has been reduced to zero;
FOURTH, the lesser of (x) the excess of (i) the Principal Payment
Amount over (ii) the sum of the amounts distributed to the
Holders of the Class A Notes pursuant to clause FIRST above, to
the Holders of the Class M-1 Notes pursuant to clause SECOND
above and to the Holders of the Class M-2 Notes pursuant to
clause THIRD above and (y) the Class M-3 Principal Payment Amount
shall be distributed to the Holders of the Class M-3 Notes, until
the Note Balance of such Class has been reduced to zero.
(3) On each Payment Date, the Net Monthly Excess Cashflow (or,
in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive of
any Overcollateralization Reduction Amount) shall be paid as follows:
(i) to the Holders of the Class or Classes of Notes then entitled
to receive distributions in respect of principal, in an amount
equal to the principal portion of any Realized Losses incurred or
deemed to have been incurred on the Mortgage Loans, applied to
reduce the Note Balance of such Notes until the aggregate Note
Balance of such Notes is reduced to zero;
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(ii) to the Holders of the Class or Classes of Notes then
entitled to receive payments in respect of principal, in an
amount equal to the Overcollateralization Increase Amount,
applied to reduce the Note Balance of such Notes until the
aggregate Note Balance of such Notes is reduced to zero;
(iii) to the Holders of the Class A Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of
Notes;
(iv) to the Holders of the Class M-1 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of
Notes;
(v) to the Holders of the Class M-1 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Class of
Notes;
(vi) to the Holders of the Class M-2 Notes, in an amount equal to
the Interest Carry Forward Amount allocable to such Class of
Notes;
(vii) to the Holders of the Class M-2 Notes, in an amount equal
to the Allocated Realized Loss Amount allocable to such Class of
Notes;
(viii) to the Holders of the Class M-3 Notes, in an amount equal
to the Interest Carry Forward Amount allocable to such Class of
Notes;
(ix) to the Holders of the Class M-3 Notes, in an amount equal to
the Allocated Realized Loss Amount allocable to such Class of
Notes; and
(x) any remaining amount, to the Issuer or the Certificate Paying
Agent as its designee, on behalf of the Certificateholders.
(b) On each Payment Date, the Indenture Trustee shall withdraw any
amounts then on deposit in the Payment Account that represent Prepayment Charges
collected by the Servicers in connection with voluntary Principal Prepayments in
full of any of the Mortgage Loans and shall distribute such amounts to the
Issuer or the Certificate Paying Agent as its designee, on behalf of the
Certificateholders. On each Payment Date, the Certificate Paying Agent shall
deposit in the Certificate Distribution Account all amounts it received pursuant
to this Section 3.05(b) and Section 3.05(a)(ix) above for the purpose of
distributing such funds to the Certificateholders after payment of trust
expenses to the Owner Trustee or the Indenture Trustee pursuant to the Owner
Trust Agreement.
(c) All payments made with respect to each Class of Notes on each
Payment Date shall be allocated PRO RATA among the Outstanding Notes in such
Class based on their respective Percentage Interests. Payments in respect of
each Class of Notes on each Payment Date will be made to the Holders of the
respective Class of record on the related Record Date (except as otherwise
provided in Section 3.05(e) or Section 8.07 respecting the final payment on such
Class),
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based on the aggregate Percentage Interest represented by their respective
Notes, and shall be made by wire transfer of immediately available funds to the
account of any such Holder at a bank or other entity having appropriate
facilities therefor, if such Holder shall have so notified the Indenture Trustee
in writing at least five Business Days prior to the Record Date immediately
prior to such Payment Date and is the registered owner of Notes having an
initial aggregate Note Balance that is in excess of the lesser of (i) $5,000,000
or (ii) two-thirds of the initial Note Balance of such Class of Notes, or
otherwise by check mailed by first class mail to the address of such Holder
appearing in the Note Register. The final distribution on each Note will be made
in like manner, but only upon presentment and surrender of such Note at the
Corporate Trust Office or such other location specified in the notice to
Noteholders of such final distribution.
Each payment with respect to a Book-Entry Note shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such payment 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 Note
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 Note Owners
that it represents. None of the Indenture Trustee, the Issuer, the Depositor,
the Owner Trustee, the Master Servicer or the Servicers shall have any
responsibility therefor except as otherwise provided by this Indenture or
applicable law.
(d) The rights of the Noteholders to receive payments in respect of
the Notes, and all interests of the Noteholders in such payments, shall be as
set forth in this Indenture. None of the Holders of any Class of Notes nor the
Indenture Trustee, the Issuer, the Depositor, the Owner Trustee, the Master
Servicer nor the Servicers shall in any way be responsible or liable to the
Holders of any other Class of Notes in respect of amounts properly previously
distributed on the Notes.
(e) The principal of each Note shall be due and payable in full on the
Final Maturity Date for such Note. All principal payments on the Notes shall be
made to the Noteholders entitled thereto in accordance with the Percentage
Interests represented by such Notes. Upon notice to the Indenture Trustee by the
Issuer, the Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the Final
Maturity Date or other final Payment Date (including any final Payment Date
resulting from any redemption pursuant to Section 8.07 hereof). Such notice
shall to the extent practicable be mailed no later than three Business Days
prior to such Final Maturity Date or other final Payment Date and shall specify
that payment of the principal amount and any interest due with respect to such
Note at the Final Maturity Date or other final Payment Date will be payable only
upon presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for such final payment. No interest
shall accrue on the Notes on or after the Final Maturity Date or any such other
final Payment Date.
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(f) Notwithstanding anything to the contrary herein, in no event shall
the Note Balance of any Class of Notes be reduced more than once in respect of
any particular amount both (a) allocated to such Note in respect of Realized
Losses pursuant to Section 3.06 and (b) paid to the Holder of such Note in
reduction of the Note Balance thereof pursuant to this Section 3.05 from Net
Monthly Excess Cashflow.
Section 3.06. ALLOCATION OF REALIZED LOSSES. (a) All Realized Losses on the
Mortgage Loans shall be allocated by the Indenture Trustee on each Payment Date
as follows: first, to Net Monthly Excess Cashflow; second, to the
Overcollateralized Amount, until such amount has been reduced to zero; third, to
the Class M-3 Notes, until the Note Balance thereof has been reduced to zero;
fourth, to the Class M-2 Notes, until the Note Balance thereof has been reduced
to zero; and fifth, to the Class M-1 Notes, until the Note Balance thereof has
been reduced to zero. All Realized Losses to be allocated to the Note Balances
of all Classes on any Payment Date shall be so allocated after the actual
payments to be made on such date as provided above. All references above to the
Note Balance of any Class of Notes shall be to the Note Balance of such Class
immediately prior to the relevant Payment Date, before reduction thereof by any
Realized Losses, in each case to be allocated to such Class of Notes, on such
Payment Date.
Any allocation of Realized Losses to a Subordinate Note on any Payment
Date shall be made by reducing the Note Balance thereof by the amount so
allocated. No allocations of any Realized Losses shall be made to the Note
Balances of the Class A Notes. Notwithstanding anything to the contrary
described herein, in no event will the Note Balance of any Note be reduced more
than once in respect of any particular amount (i) both allocable to such Notes
in respect of Realized Losses and (ii) payable as principal to the Holder of
such Notes from Net Monthly Excess Cashflow.
Section 3.07. PROTECTION OF TRUST ESTATE. (a) The Issuer will from time to
time prepare, execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Issuer or the Servicers to enforce any of their
rights with respect to the Mortgage Loans; and
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Noteholders in such Trust Estate against
the claims of all persons and parties.
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(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.08 hereof, unless the Indenture Trustee shall have first
received an Opinion of Counsel to the effect that the lien and security interest
created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.07 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.
Section 3.08. OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.
(b) On or before September 1 in each calendar year, beginning in 1999, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.
Section 3.09. PERFORMANCE OF OBLIGATIONS. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be taken by
others which would release any Person from any of such Person's covenants or
obligations under any of the
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documents relating to the Mortgage Loans or under any instrument included in the
Trust Estate, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents relating to the Mortgage Loans or any
such instrument, except such actions as any Servicer is expressly permitted to
take in the related Servicing Agreement. The Indenture Trustee, as pledgee of
the Mortgage Loans, shall be able to exercise the rights of the Issuer to direct
the actions of any Servicer pursuant to the Servicing Agreements.
Section 3.10. NEGATIVE COVENANTS. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code) or assert any claim
against any present or former Noteholder by reason of the payment of the
taxes levied or assessed upon any part of the Trust Estate;
(iii) (1) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (2)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof or (3) permit the
lien of this Indenture not to constitute a valid first priority security
interest in the Trust Estate; or
(iv) waive or impair, or fail to assert rights under, the
Mortgage Loans, or impair or cause to be impaired the Issuer's interest in
the Mortgage Loans, the Mortgage Loan Purchase Agreement or any other Basic
Document, if any such action would materially and adversely affect the
interests of the Noteholders.
Section 3.11. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year 1999), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under such Authorized
Officer's supervision; and
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(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in its compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.12. [Reserved].
Section 3.13. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS.
The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by the Seller in the Mortgage Loan Purchase
Agreement concerning the Seller and the Mortgage Loans and the right to enforce
the remedies against the Seller provided in such Mortgage Loan Purchase
Agreement to the same extent as though such representations and warranties were
made directly to the Indenture Trustee. If the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by the Seller in
the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly
notify the Seller of such finding and the Seller's obligation to cure such
breach or repurchase or substitute for the related Mortgage Loan.
Section 3.14. AMENDMENTS TO SERVICING AGREEMENTS. The Issuer covenants with
the Indenture Trustee that it will not enter into any amendment or supplement to
the Servicing Agreements without the prior written consent of the Indenture
Trustee. The Indenture Trustee, as pledgee of the Mortgage Loans, may decline to
enter into or consent to any such supplement or amendment if the Noteholders'
rights, duties or immunities would be materially and adversely affected thereby.
The Indenture Trustee may, but shall not be obligated to, enter into any
amendment or supplement to the Servicing Agreements that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Section 3.15. SERVICERS AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by any Servicer, the Issuer and the Indenture Trustee
hereby acknowledge that such Servicer is acting as agent and bailee of the
Indenture Trustee in holding amounts on deposit in the related Collection
Account, as well as its agent and bailee in holding any Related Documents
released to such Servicer, and any other items constituting a part of the Trust
Estate which from time to time come into the possession of such Servicer. It is
intended that, by each Servicer's acceptance of such agency, the Indenture
Trustee, as a secured party of the Mortgage Loans, will be deemed to have
possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the Uniform Commercial Code of the state in which
such property is held by the related Servicer.
Section 3.16. INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided,
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however, that the Issuer shall be in compliance with this Section 3.16 if it
shall have obtained an order exempting it from regulation as an "investment
company" so long as it is in compliance with
the conditions imposed in such order.
Section 3.17. ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any state or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form reasonably
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and to the Certificate Paying Agent,
on behalf of the Certificateholders and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes to be reduced,
suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered a copy thereof to the Indenture Trustee) to the effect
that such transaction will not (A) adversely affect the status of the Notes
as indebtedness for federal income tax purposes, or (B) cause the Issuer to
be subject to an entity level tax for federal income tax purposes;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture
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Trustee, the due and punctual payment of the principal of and interest on
all Notes and to the Certificate Paying Agent, on behalf of the
Certificateholders and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agree by means of such
supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of the Holders
of the Notes, (D) unless otherwise provided in such supplemental indenture,
expressly agree to indemnify, defend and hold harmless the Issuer and the
Indenture Trustee against and from any loss, liability or expense arising
under or related to this Indenture and the Notes and (E) expressly agree by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act
in connection with the Notes;
;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes to be reduced,
suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered a copy thereof to the Indenture Trustee) to the effect
that such transaction will not (A) adversely affect the status of the Notes
as indebtedness for federal income tax purposes, or (B) cause the Issuer to
be subject to an entity level tax for federal income tax purposes;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
Section 3.18. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.17(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.17(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
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Section 3.19. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Mortgage Loans and the issuance of the Notes and Equity Certificates in the
manner contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.20. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.21. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.22. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long- term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.23. [Reserved]
Section 3.24. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under this Indenture and the Owner Trust Agreement
and (y) payments to the Servicers pursuant to the terms of the Servicing
Agreements. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
Section 3.25. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Owner Trust Agreement.
Section 3.26. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.27. STATEMENTS TO NOTEHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail to each
Noteholder and Certificateholder,
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respectively, the statement prepared pursuant to Section 7.05 of this Indenture.
The Indenture Trustee shall have no responsibility to (i) verify information
provided by any Servicer to be included in such statement or (ii) include any
information required to be included in such statement if such Servicer has
failed to timely produce such information to the Indenture Trustee as required
pursuant to the related Servicing Agreement. In addition, or or prior to the
Expense Fee Termination Date, the Indenture Trustee shall forward by mail to
Financial Security Assurance Inc. the statement prepared pursuant to Section
7.05 of this Indenture.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. THE NOTES. The Notes will be substantially in the forms
annexed hereto as Exhibits A-1 through A-4. The Notes of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Note will share ratably
in all rights of the related Class.
The Notes shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee to
or upon the order of the Issuer.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Note Owners with respect to the Notes for the purposes of
exercising the rights of Noteholders hereunder. The rights of Note Owners with
respect to the Notes shall be limited to those established by law and agreements
between such Note Owners and the Depository Participants and brokerage firms
representing such Note Owners. Multiple requests and directions from, and votes
of, the Depository as Holder of the Notes with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different Note
Owners. The Indenture Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Noteholders and
shall give notice to the Depository of such record date.
In the event The Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each Note
Owner shall be entitled to notes representing the Notes it beneficially owns in
the manner prescribed in Section 4.08.
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
NOTES; APPOINTMENT OF CERTIFICATE REGISTRAR. The Issuer shall cause the
Indenture Trustee, as Note Registrar, to keep at the Corporate Trust Office a
Note Register in which, subject to such reasonable regulations as it may
prescribe, the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes as herein provided.
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Subject to the restrictions and limitations set forth below, upon surrender
for registration of transfer of any Note at the Corporate Trust Office, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Notes
in authorized initial Note Balances evidencing the same aggregate Percentage
Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor and in authorized initial Note Balances
evidencing the same aggregate Percentage Interests upon surrender of the Notes
to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver the Notes which the Noteholder
making the exchange is entitled to receive. Each Note presented or surrendered
for registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the City of New York or the city in which any Corporate
Trust Office is located. Notes delivered upon any such transfer or exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar
to keep at its Corporate Trust Office a Certificate Register pursuant to Section
3.09 of the Owner Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Equity Certificates and of transfers and exchanges thereof
pursuant to Section 3.05 of the Owner Trust Agreement. The Indenture Trustee
hereby accepts such appointment.
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (a) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satis faction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such
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replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Inden ture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. CANCELLATION. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section 4.05, except as expressly permitted by this
Indenture. All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided, however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
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Section 4.06. BOOK-ENTRY NOTES. The Notes, upon original issue, will be
issued as one or more Book-Entry Notes held by the Book-Entry Custodian or, if
appointed to hold such Notes as provided below, the Depository and registered in
the name of the Depository or its nominee and, except as provided below,
registration of such Notes may not be transferred by the Indenture Trustee
except to another Depository that agrees to hold such Notes for the respective
Note Owners with Ownership Interests therein. The Note Owners shall hold their
respective Ownership Interests in and to such Notes through the book-entry
facilities of the Depository and, except as provided in Section 4.08, shall not
be entitled to definitive, fully registered Notes ("Definitive Notes") in
respect of such Ownership Interests. All transfers by Note Owners of their
respective Ownership Interests in the Notes shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Note Owner. Each Depository Participant shall only transfer
the Ownership Interests in the Notes of Note Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures. The Indenture 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 Issuer, the Depositor, the Indenture Trustee (if the Indenture
Trustee is not the Book-Entry Custodian) and any other transfer agent (including
the Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Indenture
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 Issuer shall have the right to
inspect, and to obtain copies of, any Notes held by the Book-Entry Custodian.
Section 4.07. NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
4.08, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Depository, and
shall have no obligation to the Note Owners.
Section 4.08. DEFINITIVE NOTES. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Note Owners of Notes representing beneficial interests
aggregating at least a majority of the Note Balances of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Note Owners, the Indenture
Trustee shall notify all Note Owners, through the Depository of the occurrence
of any such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the Notes in
book-entry form by the Book-Entry Custodian or the Depository, as applicable,
accompanied by registration
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instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09. TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness. The Issuer, by entering into this Indenture, and each
Noteholder, by its acceptance of its Note (and each Note Owner by its acceptance
of an interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Section 4.10. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
cease to be of further effect with respect to the Notes, except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.07, 3.10,
3.17, 3.19 and 3.20, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes and shall release and deliver the Collateral to or
upon the order of the Issuer, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 4.03 hereof and (ii) Notes for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Maturity Date within
one year, or
c. have been called for early redemption pursuant to Section 8.07
hereof,
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and the Issuer, in the case of a. or b. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
then Outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Maturity Date or other final
Payment Date and has delivered to the Indenture Trustee a verification
report from a nationally recognized accounting firm certifying that
the amounts deposited with the Indenture Trustee are sufficient to pay
and discharge the entire indebtedness of such Notes, or, in the case
of c. above, the Issuer shall have complied with all requirements of
Section 8.07 hereof;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01 hereof, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with and, if the
Opinion of Counsel relates to a deposit made in connection with
Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will constitute an "in-substance defeasance"
within the meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in
accordance therewith, the Issuer will be the owner of the assets
deposited in trust for federal income tax purposes.
Section 4.11. APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer or Certificate Paying Agent as designee of the Issuer, as applicable, as
the Indenture Trustee may determine, to the Holders of Notes, of all sums due
and to become due thereon for principal and interest or otherwise; but such
monies need not be segregated from other funds except to the extent required
herein or required by law.
Section 4.12. REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.
Section 4.13. TEMPORARY NOTES. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
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substitutions and other variations as the officers executing such Notes may
reasonably determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
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ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. EVENTS OF DEFAULT. The Issuer shall deliver to the Indenture
Trustee, within five days after learning of the occurrence of a Default or an
Event of Default, written notice in the form of an Officer's Certificate of the
occurrence of such Default or Event of Default, its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee may, and, at the written direction of the Holders of Notes of
the Most Senior Class representing not less than a majority of the Note Balance
of such Class, shall, declare the Notes to be immediately due and payable, by a
notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration (a) 100% of the aggregate Note
Balance then outstanding, (b) the aggregate of any Allocated Realized Loss
Amount (plus accrued interest through the date of acceleration) on the Notes
remaining unpaid immediately prior to such date of acceleration, (c) accrued and
unpaid interest thereon through the date of acceleration and (d) the aggregate
of any Interest Carry Forward Amounts (plus accrued interest through the date of
acceleration) remaining unpaid immediately prior to such date of acceleration.
At any time after such declaration of acceleration of maturity with respect
to an Event of Default has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as hereinafter in
this Article V provided, the Holders of Notes of the Most Senior Class
representing a majority of the Note Balance of such Class, by written notice to
the Issuer and the Indenture Trustee, may waive the related Event of Default and
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon
the Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums reasonably paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
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Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of any
interest (including the Interest Payment Amount) on any Note when the same
becomes due and payable, and such default continues for a period of five days,
or (ii) default is made in the payment of the principal (including the Principal
Payment Amount and the Overcollateralization Increase Amount) of or any
installment of the principal of any Note when the same becomes due and payable,
the Issuer shall, upon demand of the Indenture Trustee pay to the Indenture
Trustee, for the benefit of the Holders of Notes, the whole amount then due and
payable on the Notes for principal and interest, with interest at the Note
Accrual Rate upon the overdue principal, and in addition thereto such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.15 hereof, may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee,
subject to the provisions of Section 10.15 hereof may, as more particularly
provided in Section 5.04 hereof, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or
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documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee (including any claim for reasonable compensation to
the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
reasonable expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee
on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, all other reasonable expenses
and liabilities incurred, all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the reasonable
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the benefit of the Holders of the Notes, subject to Section 5.05 hereof.
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(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default shall have
occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee, subject to the
provisions of Section 10.15 hereof, may do one or more of the following (subject
to Section 5.05 hereof):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, unless (1) the Indenture Trustee
obtains the consent of the Holders of 100% of the aggregate Note Balance of the
Most Senior Class then Outstanding, (2) the proceeds of such sale or liquidation
distributable to the Holders of the Notes are sufficient to discharge in full
all amounts then due and unpaid upon the Notes for principal and interest or (3)
the Indenture Trustee determines that the Mortgage Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Holders of 66 2/3%
of the aggregate Note Balance of the Most Senior Class then Outstanding. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee, the Owner Trustee, the Master
Servicer and Financial Security Assurance Inc. for amounts due under
Section 6.07 hereof;
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SECOND: to the Servicers, any amounts required to pay the Servicing
Fees then due and to reimburse the Servicers of P&I Advances
previously made by, and not previously reimbursed or retained, the
Servicers and, upon the final liquidation of the related Mortgage Loan
or the final liquidation of the Trust Estate, Xxxxxxxxx Advances
previously made by, and not previously reimbursed or retained by, the
related Servicer and to the Indenture Trustee reimbursement for any
advances relating to Stayed Funds;
THIRD: to the Holders of the Class A Notes, for payment of the
Interest Payment Amount allocable to such Notes, if any, then due and
unpaid through the day preceding the date on which such payment was
made;
FOURTH: to the Holders of the Class M-1 Notes, for payment of the
Interest Payment Amount allocable to such Notes, if any due and unpaid
through the day preceding the date on which such payment was made;
FIFTH: to the Holders of the Class M-2 Notes, for payment of the
Interest Payment Amount allocable to such Notes, if any due and unpaid
through the day preceding the date on which such payment was made;
SIXTH: to the Holders of the Class M-3 Notes, for payment of the
Interest Payment Amount allocable to such Notes, if any due and unpaid
through the day preceding the date on which such payment was made;
SEVENTH: to the Holders of the Class A Notes, until the Note Balance
of such Class has been reduced to zero;
EIGHTH: to the Holders of the Class M-1 Notes, until the Note Balance
of such Class has been reduced to zero;
NINTH: to the Holders of the Class M-2 Notes, until the Note Balance
of such Class has been reduced to zero;
TENTH: to the Holders of the Class M-3 Notes, until the Note Balance
of such Class has been reduced to zero;
ELEVENTH: to the Holders of the Class A Notes, an amount equal to the
Interest Carry Forward Amount (plus accrued interest through the date
of acceleration) allocable to such Class of Notes;
TWELFTH: to the Holders of the Class M-1 Notes, an amount equal to the
Interest Carry Forward Amount (plus accrued interest through the date
of acceleration) allocable to such Class of Notes;
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THIRTEENTH: to the Holders of the Class M-1 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the
date of acceleration) allocable to such Class of Notes;
FOURTEENTH: to the Holders of the Class M-2 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the
date of acceleration) allocable to such Class of Notes;
FIFTEENTH: to the Holders of the Class M-2 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the
date of acceleration) allocable to such Class of Notes;
SIXTEENTH: to the Holders of the Class M-3 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the
date of acceleration) allocable to such Class of Notes;
SEVENTEENTH: to the Holders of the Class M-3 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the
date of acceleration) allocable to such Class of Notes; and
EIGHTEENTH: any remaining amount, to the Issuer or the Certificate
Paying Agent as its designee, on behalf of the Certificateholders.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes and other obligations of the Issuer, and the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining whether to take
and maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
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Section 5.06. LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless subject to the provisions of Section 10.15 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note Balance of the
Notes in any affected Class have made a written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice of request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Note Balances of the Notes in any affected Class.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Note Balances of the Notes in such
affected Class, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
Section 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and
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such Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
Section 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11. CONTROL BY NOTEHOLDERS. The Holders of a majority of the Note
Balance of the Most Senior Class of Notes shall have the right (subject to the
provisions of Section 5.06) to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee with respect to
the Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or liquidate
the Trust Estate shall be by Holders of Notes representing the Percentage
Interest of the Note Balance of the Most Senior Class of Notes as provided
in Section 5.15;
(iii) if the conditions set forth in Section 5.05 hereof have
been satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes of the Most Senior Class to sell or liquidate the Trust
Estate shall be of no force and effect.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or, might materially adversely affect the rights
of any Noteholders not consenting to such action.
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Section 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02 hereof,
the Holders of Notes of not less than a majority of the Note Balance of the Most
Senior Class of Notes, may waive any past Event of Default and its consequences
except an Event of Default 1. with respect to payment of principal of or
interest on any of the Notes or 2. in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Note affected. In the case of any such waiver, the Issuer, the Indenture Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Note
Balance of the Most Senior Class of Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
Section 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15. SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Notes and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made
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at the time and place of such Sale. The Indenture Trustee hereby expressly
waives its right to any amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(i) the Holders of all Notes in the Most Senior Class, consent to or
direct the Indenture Trustee to make, such Sale, or
(ii) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes, in full
payment thereof in accordance with Section 5.02 hereof, on the Payment Date next
succeeding the date of such Sale, or
(iii) The Indenture Trustee determines that the conditions for
retention of the Trust Estate set forth in Section 5.05 hereof cannot be
satisfied (in making any such determination, the Indenture Trustee may rely upon
an opinion of an Independent investment banking firm obtained and delivered as
provided in Section 5.05 hereof), and the Holders of Notes representing at least
66-2/3% of the Note Balance of the Most Senior Class of Notes consent to such
Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders of Notes representing at least 66-2/3% of the Note
Balance of the Most Senior Class of Notes have otherwise consented or directed
the Indenture Trustee, at any public Sale of all or any portion of the Trust
Estate at which a minimum bid equal to or greater than the amount described in
paragraph (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount, the Indenture Trustee shall bid an amount at least $1.00 more than the
highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate,
(i) any Holder or Holders of Notes may bid for and purchase the
property offered for Sale, and upon compliance with the terms of sale may hold,
retain and possess and dispose of such property, without further accountability,
and may, in paying the purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall, upon distribution
of the net proceeds of such sale, be payable thereon, and such Notes, in case
the amounts so payable thereon shall be less than the amount due thereon, shall
be returned to the Holders thereof after being appropriately stamped to show
such partial payment;
(ii the Indenture Trustee may bid for and acquire the property offered
for Sale in connection with any Sale thereof, and, subject to any requirements
of, and to the extent permitted by, applicable law in connection therewith, may
purchase all or any portion of the Trust Estate in a private sale, and, in lieu
of paying cash therefor, may make settlement for the purchase price by crediting
the gross Sale price against the sum of (A) the amount which would be
distributable to the Holders of the Notes and Holders of Equity Certificates and
(B) the reasonable
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expenses of the Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Notes in order to
complete any such Sale or in order for the net Sale price to be credited against
such Notes, and any property so acquired by the Indenture Trustee shall be held
and dealt with by it in accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
Section 5.16. ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.
Section 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer, in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Servicers, as applicable, of
each of their obligations to the Issuer under or in connection with the Mortgage
Loan Purchase Agreement and the Servicing Agreements, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Mortgage Loan Purchase Agreement and the
Servicing Agreements to the extent and in the manner directed by the Indenture
Trustee, as pledgee of the Mortgage Loans, including the transmission of notices
of default on the part of the Seller or the Servicers thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicers of each of their obligations
under the Mortgage Loan Purchase Agreement and the Servicing Agreements.
(b) The Indenture Trustee, as pledgee of the Mortgage Loans may, and at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Note Balance of
the Most Senior Class of Notes, shall exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Seller or the Servicers under or
in connection with the Mortgage Loan Purchase Agreement and the Servicing
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Agreements, including the right or power to take any action to compel or secure
performance or observance by the Seller or the related Servicer, as the case may
be, of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Mortgage Loan Purchase Agreement and the Servicing Agreements, as the case may
be, and any right of the Issuer to take such action shall not be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture 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.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i)this paragraph does not limit the effect of paragraph (b) of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 5.11 or 5.15.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Owner Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder
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or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(h) The Indenture Trustee shall act in accordance with Sections 6.03 and
6.04 of the Servicing Agreements and shall act as successor to any of the
Servicer in accordance with Section 6.02 of the related Servicing Agreement.
(i) For all purposes under this Indenture, the Indenture Trustee shall not
be deemed to have notice or knowledge of any Default or Event of Default unless
a Responsible Officer assigned to and working in the Indenture Trustee's
corporate trust department has actual knowledge thereof or unless written notice
of any event which is in fact such an Event of Default or Default is received by
the Indenture Trustee at the Corporate Trust Office, and such notice references
the Notes generally, the Issuer, the Trust Estate or this Indenture.
The Indenture Trustee is hereby authorized to execute and shall execute the
Servicing Agreements and shall perform its duties and satisfy its obligations
thereunder. Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall apply to the Indenture Trustee's execution of the Servicing Agreements and
the performance of its duties and satisfaction of its obligations thereunder.
Section 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee, which Officer's
Certificate or Opinion of Counsel shall not be at the expense of the Indenture
Trustee or the Trust Estate. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on an Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel chosen by it with due
care, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
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omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
Section 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Section 6.11 hereof.
Section 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.05. NOTICE OF EVENT OF DEFAULT. If an Event of Default occurs and
is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Noteholders. The
Indenture Trustee shall mail to each Noteholder notice of the Event of Default
within 10 days after a Responsible Officer has actual knowledge thereof unless
such Event of Default shall have been waived or cured. Except in the case of an
Event of Default in payment of principal of or interest on any Note, the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
Section 6.06. TAX ADMINISTRATION OF THE ISSUER. The Indenture Trustee,
based solely on information timely provided by the Administrators, shall prepare
and file (or cause to be prepared and filed), on behalf of the Owner Trustee,
all tax returns and information reports, tax elections and such annual or other
reports of the Issuer as are necessary for preparation of tax returns and
information reports as provided in Section 5.03 of the Owner Trust Agreement,
including without limitation Form 1099. All tax returns and information reports
shall be signed by the Owner Trustee as provided in Section 5.03 of the Owner
Trust Agreement.
Section 6.07. PAYMENT OF FEES, COMPENSATION AND INDEMNITY. The Indenture
Trustee shall withdraw from the Payment Account and pay the following amounts
without priority: (i) on each Payment Date, the Indenture Trustee Fee to itself;
(ii) on each Payment Date on or prior to the Expense Fee Termination Date, the
Expense Fee to Financial Security Assurance Inc. and (iii) on each Payment Date,
the Master Servicing Fee to the Master Servicer. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. In addition, the Indenture Trustee shall withdraw from the
Payment Account to reimburse the Owner Trustee for all reasonable out-of pocket
expenses incurred or made by it for all services rendered by it in its execution
of the trust created under the Owner Trust Agreement and in the exercise and
performance of any of its powers and duties under the Owner Trust Agreement and
shall reimburse itself for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection. Such expenses shall include
reasonable compensation and expenses,
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disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including reasonable attorneys'
fees) incurred by it in connection with the administration of this Trust Estate
and the performance of its duties hereunder. The Indenture Trustee shall notify
the Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith. It is understood by the parties hereto that a "claim"
as used in this paragraph includes any claim for indemnification made by the
Custodian under Section 3.2 of the Custodial Agreement.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default with respect
to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.08. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. The Holders of a majority of Note
Balance of the Most Senior Class of Notes may remove the Indenture Trustee by so
notifying the Issuer and the Indenture Trustee and may appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11
hereof;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to the Noteholders. The retiring Indenture
Trustee
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shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee (other than any Mortgage Files at the time held by a
Custodian, which Custodian shall become the agent of any successor indenture
trustee hereunder).
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Note Balance of the Most
Senior Class of Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association, without any further act, shall be the
successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11 hereof.
The Indenture Trustee shall provide the Issuer and the Rating Agencies with
prior written notice of any such transaction.
If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Notes so
authenticated; and if at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Notes or in this Indenture provided
that the certificate of the Indenture Trustee shall have.
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture 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 6.11 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times be authorized to exercise corporate trust powers. The
Indenture Trustee shall also satisfy the requirements of TIA ss.310(a) and have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it or its parent shall have a
long-term debt rating of BBB or better by DCR and BBB or better by S&P. The
Indenture Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of the Issuer are
Outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met. If at any time the
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Indenture Trustee shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
specified in Section 6.08 hereof.
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized and validly existing
as a national banking association in good standing under the laws of the
United States with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted;
(ii) The Indenture Trustee has the power and authority to execute
and deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by the
Indenture Trustee by all necessary corporate action;
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
organization or bylaws of the Indenture Trustee or any agreement or other
instrument to which the Indenture Trustee is a party or by which it is
bound; and
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Indenture or (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the
Trust Estate in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibits A-1 through A-4 in accordance with the terms of this
Indenture; and
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(c) to take all other actions as shall be required to be taken by the terms
of this Indenture.
Section 6.15. THE AGENTS. The provisions of this Indenture relating to the
limitations of the Indenture Trustee's liability and to its indemnity shall
inure also to the Paying Agent, the Note Registrar, the Certificate Paying Agent
and the Certificate Registrar.
Section 6.16. APPOINTMENT OF CUSTODIANS. The Indenture Trustee may, with
the consent of the Issuer, appoint one or more Custodians to hold all or a
portion of the Mortgage Files as agent for the Indenture Trustee, by entering
into a Custodial Agreement. The appointment of any Custodian may at any time be
terminated and a substitute Custodian appointed therefor upon the reasonable
request of the related Servicer to the Indenture Trustee, the consent to which
shall not be unreasonably withheld. The Indenture Trustee shall pay any and all
fees and expenses of any Custodian in accordance with each Custodial Agreement.
The Trustee initially appoints Chase Bank of Texas National Association as
Custodian, and the Issuer consents to such appointment. Subject to Article VI
hereof, the Indenture Trustee agrees to comply with the terms of each Custodial
Agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Noteholders having an interest in any Mortgage File held
by such Custodian. Each Custodian shall be a depository institution or trust
company subject to supervision by federal or state authority, shall have
combined capital and surplus of at least $10,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be amended only as provided in such Custodial Agreement.
In no event shall the appointment of any Custodian pursuant to a Custodial
Agreement diminish the obligations of the Trustee hereunder.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
hereof and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may
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destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss.312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
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Section 7.03. REPORTS BY THE INDENTURE TRUSTEE; ISSUER FISCAL YEAR. (a) The
Indenture Trustee shall:
(i) Within 15 days after each Payment Date, the Indenture Trustee
shall file with the Commission via the Electronic Data Gathering and
Retrieval System, a Form 8-K with a copy of the statement to Noteholders
for such Payment Date as an exhibit thereto. Prior to January 30, 1999, the
Indenture Trustee shall file a Form 15 Suspension Notification with respect
to the Trust Estate, if applicable. Prior to March 30, 1999, the Indenture
Trustee shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Estate. The Issuer hereby grants to
the Indenture Trustee a limited power of attorney to execute and file each
such document on behalf of the Issuer. Such power of attorney shall
continue until the earlier of (i) receipt by the Indenture Trustee from the
Issuer of written termination of such power of attorney and (ii) the
termination of the Trust Estate. At least three Business Days prior to
filing any Form 8-K or Form 10-K pursuant to this Section 7.03, the
Indenture Trustee shall deliver a copy of such Form 8-K or Form 10-K, as
the case may be, to the Issuer and the Depositor. The Depositor agrees to
promptly furnish to the Indenture Trustee, from time to time upon request,
such further information, reports and financial statements within its
control related to this Indenture and the Mortgage Loans as the Indenture
Trustee reasonably deems appropriate to prepare and file all necessary
reports with the Commission.
(ii) to use its best efforts to file with the Depositor and the
Commission in accordance with rules and regulations prescribed from time to
time by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Depositor (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA ss. 313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by
rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
(c) The Issuer hereby agrees to furnish such information and otherwise
cooperate with the Indenture Trustee as necessary for the Indenture Trustee to
perform its duties as provided in this Section 7.03.
(d) The Indenture Trustee may conclusively rely upon any information
provided by the Servicers or the Depositor in its preparation of the foregoing
reports pursuant to this Section 7.03.
Section 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA ss. 313(a),
within 60 days after each January 1 beginning with January 1, 1999, the
Indenture Trustee shall mail to each
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Noteholder as required by TIA ss. 313(c) a brief report dated as of such date
that complies with TIA ss. 313(a). The Indenture Trustee also shall comply with
TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
Section 7.05. STATEMENTS TO NOTEHOLDERS. (a) Subject to Section 3.27 of
this Indenture, with respect to each Payment Date, the Indenture Trustee shall
deliver to each Certificateholder and Noteholder, the Depositor, the Owner
Trustee, the Certificate Paying Agent, each Rating Agency and on or prior to the
Expense Fee Termination Date, to Financial Security Assurance Inc., a statement
setting forth the following information as to the Notes, to the extent
applicable:
(a) the amount of the payment made on such Payment Date to the
Holders of Notes of each such Class allocable to principal, and the
amount of the payment made on such Payment Date to the
Certificateholders allocable to Prepayment Charges;
(b) the amount of the payment made on such Payment Date to the
Holders of Notes of each such Class allocable to interest;
(c) the Interest Carry Forward Amount and Allocated Realized Loss
Amount with respect to each Class of Notes for such Payment Date and
the aggregate unpaid Interest Carry Forward Amount and Allocated
Realized Loss Amount for all prior Payment Dates;
(d) the aggregate amount of servicing compensation received by
the each Servicer during the related Due Period;
(e) the aggregate amount of P&I Advances for such Payment Date;
(f) the aggregate Stated Principal Balance of the Mortgage Loans
and any REO Properties at the close of business on such Payment Date;
(g) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Due Date;
(h) the number and aggregate unpaid principal balance of Mortgage
Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c)
delinquent 90 or more days in each case, as of the last day of the
preceding calendar month, and (d) as to which foreclosure proceedings
have been commenced;
(i) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage
Loan, the
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unpaid principal balance and the Stated Principal Balance of such
Mortgage Loan as of the date it became an REO Property;
(j) the book value and the Stated Principal Balance of any REO
Property as of the close of business on the last Business Day of the
calendar month preceding the Payment Date;
(k) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(l) the aggregate amount of Realized Losses incurred during the
related Prepayment Period (or, in the case of Bankruptcy Losses
allocable to interest, during the related Due Period), separately
identifying whether such Realized Losses constituted Bankruptcy
Losses;
(m) the aggregate amount of expenses withdrawn from the
Collection Accounts or the Payment Account for such Payment Date;
(n) the aggregate Note Balance of each Class of Notes, after
giving effect to the payments, and allocations of Realized Losses,
made on such Payment Date, separately identifying any reduction
thereof due to allocations of Realized Losses ;
(o) the Interest Payment Amount in respect of each Class of Notes
for such Payment Date;
(p) with respect to any Mortgage Loan as to which foreclosure
proceedings have been concluded, the loan number and unpaid principal
balance of such Mortgage Loan as of the date of such conclusion of
foreclosure proceedings;
(q) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the unpaid
principal balance of such Mortgage Loans as of the date of such Final
Liquidation and the amount of proceeds (including Liquidation Proceeds
and Insurance Proceeds) collected in respect of such Mortgage Loans;
(r) on or prior to the Expense Fee Termination Date, with respect
to each Mortgage Loan on Schedule 2 attached hereto the aggregate
Expense Fee payable for such Payment Date and the aggregate principal
balance upon which such Expense Fee was calculated, which is the same
principal amount on which interest on such Mortgage Loan accrues for
the preceding calendar month.
In the case of information furnished pursuant to subclauses (a)
through (c) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class. In the case of the information furnished
pursuant to subclause (l) above, the amounts shall be set forth on a Servicer by
Servicer basis as well as in the aggregate.
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The Indenture Trustee may conclusively rely upon the Remittance Reports
provided by the Servicers pursuant to Section 4.01 of the Servicing Agreements
in its preparation of its Statement to the Noteholders pursuant to this Section
7.04.
Section 7.06. BOOKS AND RECORDS.
The Issuer hereby covenants with the Indenture Trustee that, so long
as any of the Notes remain Outstanding, it shall:
(a) at all times cause to be kept proper books of account and allow
the Indenture Trustee and any person appointed by it, to whom the Issuer shall
have no reasonable objection, access to the books of account of the Issuer at
all reasonable times, on reasonable prior notice and during normal business
hours;
(b) at all times conduct and continue to conduct business in its own
corporate name;
(c) at all times act and continue to act through its duly authorized
officers and agents; and
(d) so far as permitted by law, at all times cause to be given to the
Indenture Trustee such information as it shall reasonably require for the
purpose of the discharge of the duties, powers, trusts, authorities and
discretions vested in it by this Indenture or by operation of law.
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ARTICLE VIII
Accounts, Disbursements and Releases
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Section 8.01. COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders, the Payment
Account as provided in Section 3.01 hereof.
(b) All monies deposited from time to time in the Payment Account (other
than investments made with such monies including all income or other gain from
such investments pursuant to this Indenture and other than Prepayment Charges),
including assumption fees, and all deposits therein pursuant to this Indenture
are for the benefit of the Noteholders. Any Prepayment Charges deposited from
time to time in the Payment Account are for the benefit of the
Certificateholders and are not available to the Noteholders.
On each Payment Date, the Indenture Trustee shall distribute all amounts on
deposit in the Payment Account to Noteholders in respect of the Notes and to
such other persons in the order of priority set forth in Section 3.05 hereof
(except as otherwise provided in Section 5.04(b) hereof).
The Indenture Trustee may invest any funds in the Payment Account in
Permitted Investments, in its discretion, maturing no later than the Business
Day preceding each Payment Date (provided, however, that with respect to
Permitted Investments that consist of obligations of the Indenture Trustee or
its Affiliates, such Permitted Investments may mature on the related Payment
Date) and such Permitted Investments shall not be sold or disposed of prior to
their maturity. All income or other gain from such investments may be released
from the Payment Account and paid to the Indenture Trustee from time to time as
part of its compensation for acting as Indenture Trustee.
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Section 8.03. OFFICER'S CERTIFICATE. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.05(a) hereof, accompanied by copies of any instruments to
be executed, and the Indenture Trustee shall also require, as a condition to
such action, an Officer's Certificate, in form and substance reasonably
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete such action, and concluding
that all conditions precedent to the taking of such action have been complied
with.
Section 8.04. TERMINATION UPON PAYMENT TO NOTEHOLDERS. This Indenture and
the respective obligations and responsibilities of the Issuer and the Indenture
Trustee created hereby shall terminate upon the payment to Noteholders, the
Certificate Paying Agent on behalf of the Certificateholders and the Indenture
Trustee of all amounts required to paid pursuant to Article III; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the 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.
Section 8.05. RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
reasonable fees and expenses, the Indenture Trustee may, and when required by
the provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, or convey the Indenture Trustee's interest in
the same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied.
Section 8.06. SURRENDER OF NOTES UPON FINAL PAYMENT. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
Section 8.07. OPTIONAL REDEMPTION OF THE NOTES. (a) At its option, the
Majority Certificateholder may redeem the Notes in whole, but not in part, on
any Payment Date on or after the Payment Date which the aggregate Note Balance
is reduced to less than 20% of the aggregate initial Note Balance as of the
Cut-Off Date. The aggregate redemption price for the Notes will be equal to the
sum of (a) 100% of the aggregate Note Balance then outstanding, (b) the
aggregate of any Allocated Realized Loss Amount on the Notes remaining unpaid
immediately prior to such Payment Date,
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(c) the aggregate of the Interest Payment Amounts on the Notes for such Payment
Date and (d) the aggregate of any Interest Carry Forward Amounts for such
Payment Date.
(b) At its option, the Majority Certificateholder may obtain the release
from the lien of the Indenture the Mortgage Loans and each REO Property listed
on Schedule 2 attached hereto remaining in the Trust Estate and in connection
therewith effect a partial redemption of the Notes on any Payment Date following
the Due Period in which the aggregate Stated Principal Balance of such Mortgage
Loans and such REO Properties listed on Schedule 2 attached hereto remaining in
the Trust Estate at the time of such election is less than $19,989,567.32. The
aggregate redemption price for such partial redemption of the Notes shall be a
price which is equal to the greater of (A) the aggregate Purchase Price of all
the Mortgage Loans included on Schedule 2 remaining in the Trust Estate, plus
the appraised value of each REO Property, if any, included on Schedule 2
remaining in the Trust Estate, such appraisal to be conducted by an appraiser
mutually agreed upon by the Majority Certificateholder and the Indenture Trustee
in their reasonable discretion and (B) the aggregate fair market value of all of
the assets of the Trust Estate included on such Schedule 2 (as determined by the
Majority Certificateholder and the Indenture Trustee), as of the close of
business on the third Business Day next preceding the date upon which partial
redemption is to take place.
(c) In order to exercise either of the foregoing options, the Majority
Certificateholder shall, not less than 15 days prior to the proposed Payment
Date on which such redemption is to be made, deposit the aggregate redemption
price specified in (a) above or the aggregate redemption price for the partial
redemption specified in (b) above with the Indenture Trustee (and the Indenture
Trustee shall deposit such funds in the Payment Account), and shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Owner Trustee, the Master Servicer and the Servicers.
(d) Following receipt of the notice and the aggregate redemption price,
calculated as specified in Section 8.07(a) hereof, pursuant to the foregoing,
the Indenture Trustee shall provide notice to the Noteholders of the final
payment on the Notes and shall apply such funds to make final payments of
principal and interest on the Notes in accordance with Section 3.05(a) hereof,
and this Indenture shall be discharged, subject to the provisions of Section
4.10 hereof. Following receipt of the notice and the aggregate partial
redemption price, calculated as specified in Section 8.07(b) hereof, the
Indenture Trustee shall promptly release or cause to be released to the Majority
Certificateholder the related Mortgage Files and the Indenture Trustee shall
execute all assignments, endorsements and other instruments necessary to
effectuate such transfer. If for any reason the amount deposited by the Majority
Certificateholder is not sufficient to make either of the above-described
redemptions or such redemptions cannot be completed for any reason, the amount
so deposited by the Majority Certificateholder with the Indenture Trustee shall
be immediately returned to the Majority Certificateholder in full and shall not
be used for any other purpose or be deemed to be part of the Trust Estate.
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ARTICLE IX
Supplemental Indentures
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Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. (a)
Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form reasonably
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and
in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity or to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor Indenture Trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts hereunder
by more than one trustee, pursuant to the requirements of Article VI
hereof; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA;
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provided, however, that no such supplemental indenture shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such supplemental indenture will not (A) result in a "substantial
modification" of the Notes under Treasury Regulation Section 1.1001.3 or
adversely affect the status of the Notes as indebtedness for federal income tax
purposes or (B) cause the Issuer to be subject to an entity level tax.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel (or, in the alternative, with respect to clause (i), as
evidenced by a rating letter confirming the existing ratings on the Notes) (i)
adversely affect in any material respect the interests of any Noteholder or (ii)
if 100% of the Equity Certificates are not owned by the Transferor or the Seller
is outstanding, cause the Issuer to be subject to an entity level tax for
federal income tax purposes.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the prior consent of the
Holders of not less than a majority of the Note Balance of the Notes affected
thereby, by Act (as defined in Section 10.03 hereof) of such Holders delivered
to the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which, any Note or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof;
(ii) reduce the percentage of the Note Balances of the Notes, the
consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions
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of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in
the definition of the term "Noteholder";
(iv) reduce the percentage of the Note Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04 hereof;
(v) modify any provision of this Section 9.02 except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture; and provided, further, that such action shall not,
as evidenced by an Opinion of Counsel, cause the Issuer to be subject to an
entity level tax.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled
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to receive, and subject to Sections 6.01 and 6.02 hereof, shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Notwithstanding anything to the contrary in this Article IX, no amendment
that directly or indirectly changes the priority of payment, dates of payment or
amounts of the Expense Fee payable to Financial Security Assurance Inc. shall be
effective without the consent of Financial Security Assurance Inc.
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
MISCELLANEOUS
Section 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee a. an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and b. an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the signatory of such certificate or opinion is required
to be Independent, the statement required by the definition of the term
"Independent".
(b) (i) Except with respect to the substitution of Mortgage Loans pursuant
to Section 3.2 of the Mortgage Loan Purchase Agreement, prior to the deposit of
any Collateral or other property or securities with the Indenture Trustee that
is to be made the basis for the release of any property or securities subject to
the lien of this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 10.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or securities to
be so deposited and a report from a nationally recognized accounting firm
verifying such value.
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(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate from a
nationally recognized accounting firm as to the same matters, if the fair value
to the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is 10%
or more of the Note Balances of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Note Balances of the Notes.
(iii) Except with respect to the substitution of Mortgage
Loans pursuant to Section 3.2 of the Mortgage Loan Purchase Agreement, whenever
any property or securities are to be released from the lien of this Indenture,
the Issuer shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate as to the
same matters if the fair value of the property or securities and of all other
property, other than securities released from the lien of this Indenture since
the commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals 10% or
more of the Note Balances of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the then Note Balances of the Notes.
Section 10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations
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by, an officer or officers of the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Seller or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. ACTS OF NOTEHOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01
hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other
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documents provided or permitted by this Indenture shall be in writing and if
such request, demand, authorization, direction, notice, consent, waiver or Act
of Noteholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at the Corporate Trust
Office. The Indenture Trustee shall promptly transmit any notice received
by it from the Noteholders to the Issuer; or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid, to the Issuer addressed to: Salomon Brothers
Mortgage Securities VII, Inc. Asset-Backed Floating Rate Notes, Series
1998-11, in care of Wilmington Trust Company, Xxxxxx Square North, 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Trust Administration (telecopy number (000) 000-0000), or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer. The Issuer shall promptly transmit any notice received by it from
the Noteholders to the Indenture Trustee; or
(iii) the Depositor by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid, to the Depositor addressed to: Salomon
Brothers Mortgage Securities VII, Inc., Seven World Trade Center, New York,
New York 10048, Attention: Mortgage Finance Group (telecopy number (212)
783-3895), or at any other address previously furnished in writing to the
Indenture Trustee by the Depositor. The Depositor shall promptly transmit
any notice received by it from the Noteholders to the Indenture Trustee; or
(iv) the Seller by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid, to the Issuer addressed to: Wilshire Real
Estate Investment Trust Inc., 0000 Xxxxx Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxx 00000, Attention: Xxxxxxxx Xxxxxxxxxx (telecopy number (503)
223-8799), or at any other address previously furnished in writing to the
Indenture Trustee by the Seller. The Seller shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed first-class postage prepaid, to (i) in the case of DCR, at the
following address: Duff & Xxxxxx Credit Rating Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, 00000 and (ii) in the case of S&P, at the following address:
Standard & Poor's Ratings Services, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein
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expressly provided) if in writing and mailed first-class, postage prepaid, to
each Noteholder affected by such event, at such Person's address as it appears
on the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Noteholder shall affect
the sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.07. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
Section 10.08. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co- trustees and agents.
Section 10.09. SEPARABILITY. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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Section 10.10. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.11. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.12. COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 10.13. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.14. ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Owner Trust
Agreement.
Section 10.15. NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Transferor, the Depositor
or the Issuer, or join in any institution against the Transferor, the Depositor
or the Issuer of, any bankruptcy, reorganization, arrangement,
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insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the Basic Documents.
This Section 10.15 will survive for one year and one day following the
termination of this Indenture.
Section 10.16. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall cause their representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is necessary to perform its obligations hereunder.
Section 10.17. LIMITED THIRD-PARTY BENEFICIARY. Financial Security
Assurance Inc. shall be a limited third-party beneficiary of this Indenture,
entitled to enforce its right to the Expense Fee and any other rights it may
have as if a party hereto.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
WILSHIRE REIT TRUST SERIES 1998-1,
as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee and as Note Registrar
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
xxxxxx accepts the appointment as
Certificate Paying Agent pursuant to
Section 3.10 of the Owner Trust
Agreement and as Certificate Registrar
pursuant to Section 4.02 hereof.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September 1998, before me, a notary public in and for
said State, personally appeared Xxxxxx X. Xxxxxx, known to me to be a Vice
President of Wilmington Trust Company, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_______________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September 1998, before me, a notary public in and for
said State, personally appeared Xxxxxxx X. Xxxxxx, known to me to be an
Assistant Vice President of Norwest Bank Minnesota, National Association, one of
the 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]
APPENDIX A
DEFINITIONS
"Accrued Certificate Interest": With respect to any Class of Notes and
each Payment Date, interest accrued during the related Interest Accrual Period
at the Note Interest Rate for such Note for such Payment Date on the Note
Balance of such Note immediately prior to such Payment Date. All payments of
interest on the Notes will be calculated on the basis of a 360-day year and the
actual number of days in the applicable Interest Accrual Period.
"Adjustable Rate Mortgage Loan": Each of the Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
"Adjustment Date": With respect to each Adjustable Rate 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.
"Administration Agreement": The administration agreement, dated as of
the date hereof, among the Issuer and the Administrators, pursuant to which the
Administrators shall perform various obligations of the Issuer hereunder.
"Administrators": Each person acting as an "Administrator" from time
to time under the Administration Agreement, which initially shall be Norwest
Bank Minnesota, National Association and Wilshire Servicing Corporation.
"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.
"Allocated Realized Loss Amount": With respect to any Payment Date and
any Class of Subordinate Notes, the sum of (i) any Realized Losses allocated to
such Class of Notes on any Payment Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of Notes remaining unpaid from previous
Payment Dates plus accrued interest on such amount calculated at the related
Note Accrual Rate for each Interest Accrual Period such amount remained
outstanding.
"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.
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"Authorized Newspaper": A newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
"Authorized Officer": With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identi fied on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
"Available Interest Rate": With respect to any Payment Date, a rate
per annum equal to the fraction, expressed as a percentage, the numerator of
which is (i) the Current Interest Amount for such Payment Date, and the
denominator of which is (ii) an amount equal to (A) the aggregate Note Balance
of the Notes immediately prior to such Payment Date multiplied by (B) the actual
number of days elapsed in the related Interest Accrual Period and divided by
360.
"Available Payment Amount": With respect to any Payment Date, an
amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in
the Collection Accounts and Payment Account as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property withdrawn from any REO Account and deposited in the Payment
Account for such Payment Date pursuant to Section 3.23 of each Servicing
Agreement, (c) the aggregate of any amounts deposited in the Payment Account by
the Servicers in respect of Prepayment Interest Shortfalls for such Payment Date
pursuant to Section 3.24 of the Servicing Agreements, (d) the aggregate of any
P&I Advances made by the Servicers for such Payment Date pursuant to Section
4.01 of the Servicing Agreements and (e) the aggregate of any advances made by
the Master Servicer or the Indenture Trustee for such Payment Date pursuant to
Section 6.02 of the Servicing Agreements, reduced (to not less than zero) by (2)
the sum of (x) the portion of the amount described in clause (1)(a) above that
represents (i) Monthly Payments on the Mortgage Loans received from a Mortgagor
on or prior to the Determination Date but due during any Due Period subsequent
to the related Due Period, (ii) Principal Prepayments on the Mortgage Loans
received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Master Servicer, the
Servicers, the Indenture Trustee, the Seller or any Sub-Servicer pursuant to
Section 3.11 of the Servicing Agreements, Section 3.12 of the Servicing
Agreements or pursuant to Section 6.07 of the Indenture, (v) Stayed Funds, (vi)
the Indenture Trustee Fee, the Expense Fee and the Master Servicing Fee payable
from the Payment Account pursuant to the Indenture, (vii) amounts deposited in
the Collection Accounts or the Payment Account in error and (viii) the amount of
any Prepayment Charges collected by the Servicers in connection with the
voluntary Principal Prepayment in full of any of the Mortgage Loans, and (y)
amounts reimbursable to the Master Servicer or the Indenture Trustee for an
advance made pursuant to Section 6.02(b) of the Servicing Agreements, which
advance the Master Servicer or the Indenture Trustee, as applicable, has
determined to be nonrecoverable from the Stayed Funds in respect of which it was
made.
A-2
"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.
"Basic Documents": The Owner Trust Agreement, the Certificate of
Trust, the Indenture, the Mortgage Loan Purchase Agreement, the Ownership
Transfer Agreement, the Servicing Agreements and the other documents and
certificates delivered in connection with any of the above.
"Book-Entry Custodian": The Custodian appointed pursuant to Section
4.06.
"Book-Entry Notes": Any Note registered in the name of the Depository
or its nominee. Initially, all of the Notes will be Book-Entry Notes.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings and loan institutions in the State of California, the
State of Maryland or the State of New York, or in the city in which the
Corporate Trust Office of the Indenture Trustee is located, are authorized or
obligated by law or executive order to be closed.
"Business Trust Statute": Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss.ss.3801 ET SEQ., as the same may be amended from time to time.
"Certificate Distribution Account": The account or accounts created
and maintained pursuant to Section 3.10(c) of the Owner Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.
"Certificate Paying Agent": The meaning specified in Section 3.10 of
the Owner Trust Agreement.
"Certificate Percentage Interest": With respect to each Equity
Certificate, the Certificate Percentage Interest on the face thereof.
"Certificate Register": The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Equity Certificates and of transfers and exchanges of Equity Certificates.
"Certificate Registrar": Initially, the Indenture Trustee, in its
capacity as Certificate Registrar, or any successor to the Indenture Trustee in
such capacity.
"Certificate of Trust": The Certificate of Trust filed for the Issuer
pursuant to Section 3810(a) of the Business Trust Statute.
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"Certificateholder": The Person in whose name an Equity Certificate is
registered in the Certificate Register. Pledgees of Equity Certificates that
have been pledged in good faith may be regarded as Certificateholders if the
pledgee establishes to the satisfaction of the Indenture Trustee or the Owner
Trustee, as the case may be, the pledgee's right so to act with respect to such
Equity Certificates and that the pledgee is not the Issuer, any other obligor
upon the Equity Certificates or any Affiliate of the foregoing Persons.
"Class": Collectively, all of the Notes bearing the same class
designation.
"Class A Note": Any one of the Class A Notes authorized by this
Indenture, substantially in the form annexed hereto as Exhibit A-1.
"Class A Principal Payment Amount": With respect to any Payment Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
excess of (x) the Note Balance of the Class A Notes immediately prior to such
Payment Date over (y) the lesser of (A) the product of (i) 62.70% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $2,856,405.
"Class M-1 Note": Any one of the Class M-1 Notes authorized by this
Indenture, substantially in the form annexed hereto as Exhibit A-2.
"Class M-1 Principal Payment Amount": With respect to any Payment Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
excess of (x) the sum of (i) the Note Balance of the Class A Notes (after taking
into account the payment of the Class A Principal Payment Amount on such Payment
Date) and (ii) the Note Balance of the Class M-1 Notes immediately prior to such
Payment Date over (y) the lesser of (A) the product of (i) 76.50% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $2,856,405.
"Class M-2 Note": Any one of the Class M-2 Notes authorized by this
Indenture, substantially in the form annexed hereto as Exhibit A-3.
"Class M-2 Principal Payment Amount": With respect to any Payment Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
excess of (x) the sum of (i) the Note Balance of the Class A Notes (after taking
into account the payment of the Class A Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date) and
(iii) the Note Balance of the Class M-2 Notes immediately prior to such Payment
Date over (y) the lesser of (A) the product of (i) 85.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,856,405.
A-4
"Class M-3 Note": Any one of the Class M-3 Notes authorized by this
Indenture, substantially in the form annexed hereto Exhibit A-4.
"Class M-3 Principal Payment Amount": With respect to any Payment Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
excess of (x) the sum of (i) the Note Balance of the Class A Notes (after taking
into account the payment of the Class A Principal Payment Amount on such Payment
Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
the payment of the Class M-1 Principal Payment Amount on such Payment Date),
(iii) the Note Balance of the Class M-2 Notes (after taking into account the
payment of the Class M-2 Principal Payment Amount on such Payment Date) and (iv)
the Note Balance of the Class M-3 Notes immediately prior to such Payment Date
over (y) the lesser of (A) the product of (i) 96.50% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,856,405.
"Closing Date": September 30, 1998.
"Code": The Internal Revenue Code of 1986.
"Collateral": The meaning specified in the Granting Clause of the
Indenture.
"Collection Account": The account or accounts created and maintained
by each Servicer pursuant to Section 3.10(a) of the related Servicing Agreement.
The Collection Account must be an Eligible Account.
"Corporate Trust Office": With respect to the Indenture Trustee, the
principal corporate trust office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this instrument is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders, the Issuer, the Owner Trustee, the
Master Servicer and the Servicers. With respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee at, which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this instrument is located at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Wilshire
REIT Trust Series 1998-1, or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders, the
Certificateholders, the Issuer, the Indenture Trustee, the Master Servicer and
the Servicers.
"Credit Enhancement Percentage": For any Payment Date, the percentage
equivalent of a fraction, the numerator of which is the sum of the aggregate
Note Balances of the Subordinate Certificates and the Overcollateralized Amount,
and the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans, calculated after taking into account payments of principal on
the Mortgage Loans and payment of the Principal Payment Amount to the Notes then
entitled to payments of principal on such Payment Date.
A-5
"Current Interest Payment Amount": With respect to any Payment Date,
an amount equal to interest collections or advances on the Mortgage Loans during
the related Due Period (net of the Master Servicing Fee, the Expense Fee, the
Servicing Fees and the Indenture Trustee Fee).
"Custodial Agreement": An agreement that may be entered into among the
Issuer, the Master Servicer, the Servicers, the Indenture Trustee and the
Custodian in the form of Exhibit C annexed hereto or a similar agreement
assigned to the Indenture Trustee with respect to the Mortgage Loans.
"Custodian": A custodian, which shall not be the Issuer, the Master
Servicer, the Servicers, the Depositor, the Seller, the Transferor, the Owner
Trustee or any Affiliate of any of them, appointed pursuant to a Custodial
Agreement.
"Cut-off Date": With respect to each Original Mortgage Loan, September
1, 1998. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"DCR": Xxxx & Xxxxxx Credit Rating Co. or its successor in interest.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Default": Any occurrence which is or with notice or the lapse of time
or both would become an Event of Default.
"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 Notes": As defined in Section 4.06.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans that, as of the last day of the
previous calendar month, are 60 or more days delinquent, are in foreclosure,
have been converted to REO Properties or have been discharged by reason of
bankruptcy, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the previous calendar month.
A-6
"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 Notes that are to be Book-Entry Notes, 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 Indenture Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated D-1+ by DCR (if rated by DCR) and A-1 by S&P (or comparable ratings if
DCR and S&P are not the Rating Agencies).
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to each Payment Date, the 15th day
of the calendar month in which such Payment Date occurs or, if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day.
"Due Date": With respect to each Payment Date, the first day of the
calendar month in which such Payment 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 Payment Date, the period commencing
on the second day of the calendar month preceding the calendar month in which
such Payment Date occurs and ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which are rated "AAA" or "D-1+", as
applicable, by DCR (if rated by DCR) and A-1 by S&P (or comparable ratings if
DCR and S&P are not the Rating Agencies) at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC or (iii) a trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity. Eligible Accounts
may bear interest.
"Equity Certificates": The certificates evidencing the beneficial
ownership interest in the Issuer and executed by the Owner Trustee in
substantially the form set forth in Exhibit A to the Owner Trust Agreement.
A-7
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Estate in Real Property": A fee simple estate in a parcel of land.
"Event of Default": With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default by the Issuer in the payment of (a) the Interest Payment
Amount, the Principal Payment Amount or any Overcollateralization Increase
Amount with respect to a Payment Date on such Payment Date, but only to the
extent funds are available to make such payment as provided in the
Indenture which remains unremedied for a period of five days; or
(ii) the failure by the Issuer on the Final Maturity Date to reduce
the Note Balance of any Notes outstanding to zero; or
(iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or any
representation or warranty of the Issuer made in the Indenture or in any
certificate or other writing delivered pursuant thereto or in connection
therewith proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue or
not be cured, or the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Holders of at least 25% of
the Voting Rights, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of default hereunder; or
(iv) there occurs the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) there occurs the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law, or
the consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the
A-8
Issuer or for any substantial part of the assets of the Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of any action by the Issuer in furtherance
of any of the foregoing.
"Excess Overcollateralized Amount": With respect to the Class A Notes
and the Subordinate Notes and any Payment Date, the excess, if any, of (i) the
Overcollateralized Amount for such Payment Date over (ii) the Required
Overcollateralized Amount for such Payment Date.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Expense Fee": With respect to each Mortgage Loan on Schedule 2
attached hereto 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 Expense Fee Rate on the same principal amount on which interest on
such Mortgage Loan accrues for such calendar month. Notwithstanding the
forgoing, the Expense Fee shall not be payable after the Expense Fee Termination
Date.
"Expense Fee Rate": 0.21% per annum.
"Expense Fee Termination Date": The Expense Fee shall be paid to
Financial Security Assurance Inc. until and including the Payment Date following
the Due Period in which the aggregate Stated Principal Balance of the Mortgage
Loans and any REO Properties listed on Schedule 2 attached hereto remaining in
the Trust Estate is less than $19,989,567.32.
"Expenses": The meaning specified in Section 7.02 of the Owner Trust
Agreement.
"Xxxxxx Xxx": Xxxxxx Xxx, formerly known as the Federal National
Mortgage Association ("FNMA") or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Maturity Date": The Payment Date occurring in October 2028.
"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 or the related Servicer pursuant to or as contemplated by Section
2.01 or Section 3.16(c) of the related Servicing Agreement), a determination
made by the related Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which such Servicer, in its reasonable good
faith judgment, expects to be finally recoverable in respect thereof have been
so recovered. The related Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.
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"Freddie Mac": Freddie Mac, formerly known as the Federal Home Loan
Mortgage Corporation ("FHLMC") or any successor thereto.
"Grant": Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and xxxxx x xxxx upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Indenture": The indenture, dated as of September 1, 1998 between the
Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee.
"Indenture Trustee": Norwest Bank Minnesota, National Association, a
national banking association, in its capacity as Indenture Trustee, or its
successor in interest, or any successor indenture trustee appointed as provided
in this Indenture.
"Indenture Trustee Fee": The amount payable to the Indenture Trustee
on each Payment Date pursuant to the Indenture as compensation for all services
rendered by it, which amount shall equal one twelfth of the product of (i) the
Indenture Trustee Fee Rate, multiplied by (ii) the aggregate Scheduled Principal
Balance of the Mortgage Loans and any REO Properties as of the second preceding
Due Date (or, in the case of the initial Payment Date, as of the Cut-off Date).
"Indenture Trustee Fee Rate": 0.0035% per annum.
"Independent": When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller, the Transferor, the Servicers, the Issuer, the Depositor and any
Affiliate of any of the foregoing Persons, (ii) does not have any direct
financial interest or any material indirect financial interest in the Issuer,
any such other obligor, the Seller, the Transferor, the Master Servicer, the
Servicers, the Issuer, the Depositor or any Affiliate of any of the foregoing
Persons and (iii) is not connected with the Issuer, any such other obligor, the
Seller, the Transferor, the Master Servicer, the Servicers, the Issuer, the
Depositor or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
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"Independent Certificate": A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an Independent appraiser or other expert appointed by the Issuer and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Index": With respect to each Mortgage Loan and each related
Adjustment Date, the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available as of a date as specified in the related
Mortgage Note.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the related
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 Payment Date, the
period commencing on the Payment Date of the month immediately preceding the
month in which such Payment Date occurs (or, in the case of the first Payment
Date, commencing on the Closing Date) and ending on the day preceding such
Payment Date.
"Interest Carry Forward Amount": With respect to any Payment Date and
any Class of Notes, the sum of (i) the amount, if any, by which (a) the Interest
Payment Amount that would be payable at the applicable Note Accrual Rate for
such Class of Notes as of the immediately preceding Payment Date exceeded (b)
the actual amount paid on such Class of Notes in respect of interest on such
immediately preceding Payment Date at the Available Interest Rate and (ii) the
amount of any Interest Carry Forward Amount for such Class of Notes remaining
unpaid from previous Payment Dates plus accrued interest on such amount
calculated at the related Note Accrual Rate for each Interest Accrual Period
such amount remained outstanding.
"Interest Determination Date": With respect to the Notes and any
Interest Accrual Period therefor, the second London Business Day preceding the
commencement of such Interest Accrual Period.
"Interest Payment Amount": With respect to any Payment Date and any
Class of Notes, the aggregate Accrued Certificate Interest on the Notes of such
Class for such Payment Date.
"Investment Company Act": The Investment Company Act of 1940, as
amended, and any amendments thereto.
"Issuer": Wilshire REIT Trust Series 1998-1, a Delaware Business
Trust, or its successor in interest.
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"Issuer Request": A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
"Lien": Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agree ment, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Estate by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.01 or Section 3.16(c) of the related
Servicing Agreement. With respect to any REO Property, a Final Recovery
Determination is made as to such REO Property.
"Liquidation Proceeds": The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the related Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.01, Section 3.16(c) or Section 3.23 of the
related Servicing Agreement.
"Loan-to-Value Ratio": As of any date of determination, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at such date and the denominator of which is the Value
of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of London
are open and conducting transactions in United States dollars.
"Majority Certificateholder": Any single Certificateholder or group of
Certificateholders representing a greater than 50% Percentage Interest in the
Equity Certificates.
"Master Servicer": Wilshire Servicing Corporation or its successor in
interest, in its capacity as Master Servicer under the Servicing Agreements.
"Master 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 Master
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Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Master Servicing Fee Rate": 0.05% per annum.
"Maximum Mortgage Rate": With respect to each Adjustable Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.
"Maximum Note Interest Rate": With respect to the Notes and any
Payment Date, a fixed rate equal to 13.75% per annum.
"Minimum Mortgage Rate": With respect to each Adjustable Rate 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 related Servicer pursuant to Section 3.07 of the related Servicing
Agreement; and (c) on the assumption that all other amounts, if any, due under
such Mortgage Loan are paid when due.
"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 file containing the Related Documents pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the
related Servicing Agreement.
"Mortgage Loan": Each mortgage loan identified in the Mortgage Loan
Schedule.
"Mortgage Loan Purchase Agreement": The agreement, dated as of
September 1, 1998, among the Seller, the Transferor and the Issuer.
"Mortgage Loan Remittance Rate": With respect to any Mortgage Loan or
REO Property, as of any date of determination, the then applicable Net Mortgage
Rate in respect thereof plus the Indenture Trustee Fee Rate, the Master
Servicing Fee Rate and the Expense Fee Rate.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
attached hereto as Schedule 1. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
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(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the Loan-to-Value Ratio at origination;
(viii) the Mortgage Rate in effect immediately following the Cut-off
Date;
(ix) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(x) the stated maturity date;
(xi) the amount of the Monthly Payment due on the first Due Date
after the Cutoff Date;
(xii) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xiii) the original principal amount of the Mortgage Loan;
(xiv) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xv) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(xvi) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xvii) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Rate;
(xviii)with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate;
(xix) the Mortgage Rate at origination;
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(xx) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment;
(xxi) a code indicating the documentation program;
(xxii) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(xxiii)the risk grade;
(xxiv) the Value of the Mortgaged Property; and
(xxv) the sale price of the Mortgaged Property, if applicable.
The Mortgage Loan Schedule shall set forth the following information
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Issuer 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.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, without regard to any
reduction thereof as a result of a Debt Service Reduction or operation of the
Relief Act.
"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.
"Most Senior Class": The Class A Notes, or after the Class A Notes
have been paid in full, the Class of Subordinate Notes then Outstanding with the
lowest numerical designation.
"Net Monthly Excess Cashflow": With respect to any Payment Date, the
sum of (i) any Overcollateralization Reduction Amount for such Payment Date and
(ii) the excess of (x) the Available Payment Amount for such Payment Date over
(y) the sum for such Payment Date of (A) the aggregate of the Interest Payment
Amounts payable to the Notes and (B) the sum of the amounts described in clauses
(b)(i) through (iii) of the definition of Principal Payment Amount.
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"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 sum
of the Servicing Fee Rates, the Indenture Trustee Fee Rate, the Master Servicing
Fee Rate and the Expense Fee Rate.
"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 related 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.
"Note Accrual Rate": With respect to the Notes and any Payment Date, a
rate per annum equal to the lesser of (i) the related One-Month LIBOR Note
Interest Rate for such Payment Date and (ii) the Maximum Note Interest Rate.
"Note Balance": With respect to any Note, as of any date of
determination, the Note Balance of such Note on the Payment Date immediately
prior to such date of determination, minus all payments allocable to principal
made thereon and Realized Losses allocated thereto on such immediately prior
Payment Date (or, in the case of any date of determination up to and including
the initial Payment Date, the initial Note Balance of such Note, as stated on
the face thereof).
"Note Interest Rate": With respect to the Notes and any Payment Date,
a rate per annum equal to the least of (i) the related One-Month LIBOR Note
Interest Rate for such Payment Date, (ii) the Available Interest Rate for such
Payment Date and (iii) the Maximum Note Interest Rate.
"Note Owner": With respect to a Book-Entry Note, the Person who is the
beneficial owner of such Note 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.
"Note Register": The register maintained by the Note Registrar in
which the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes.
"Note Registrar": The Indenture Trustee, in its capacity as Note
Registrar or its successor in interest, or any successor Note Registrar
appointed as provided in this Indenture.
"Noteholder" or "Holder": The Person in whose name a Note is
registered in the Note Register, except that solely for the purposes of giving
any consent pursuant to the Indenture, the Owner Trust Agreement or the
Servicing Agreements, any Note registered in the name of the Seller, the
Transferor, the Depositor, the Issuer, the Master Servicer or the Servicers 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. The Indenture Trustee may conclusively
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rely upon a certificate of the Seller, the Transferor, the Depositor, the
Issuer, the Master Servicer or the Servicers in determining whether a Note is
held by an Affiliate thereof. All references herein to "Holders" or
"Noteholders" shall reflect the rights of Note Owners as they may indirectly
exercise such rights through the Depository and participating members thereof,
except as otherwise specified herein; provided, however, that the Indenture
Trustee shall be required to recognize as a "Holder" or "Noteholder" only the
Person in whose name a Note is registered in the Note Register.
"Notes": Asset-Backed Floating Rate Notes, Series 1998-11, designated
as the "Notes" in the Indenture.
"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; with respect to
each Servicer or the Master Servicer, any officer who is authorized to act for
such Servicer in matters relating to the related Servicing Agreement, and whose
action is binding upon such Servicer or the Master Servicer, as applicable,
initially including those individuals whose names appear on the list of
authorized officers delivered at the closing.
"One-Month LIBOR": With respect to the Notes and any Interest Accrual
Period therefor, the rate determined by the Indenture Trustee on the related
Interest Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such Interest Determination Date; provided that if such rate
does not appear on Telerate Page 3750, the rate for such date will be determined
on the basis of the offered rates of the Reference Banks for one-month U.S.
dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination
Date. In such event, the Indenture Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If on
such Interest Determination Date, two or more Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If on such Interest
Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, One-Month LIBOR for an
Interest Determination Date would be based on One-Month LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Indenture Trustee shall select an alternative comparable index (over
which the Indenture Trustee has no control), used for determining one-month
Eurodollar lending rates that is calculated and published (or otherwise made
available) by an independent party.
"One-Month LIBOR Note Interest Rate": With respect to the Class A
Notes, a per annum rate equal to One-Month LIBOR plus 0.32%, in the case of each
Payment Date through and including the Payment Date on which the aggregate Note
Balance is reduced to less than 20% of the aggregate initial Note Balance, or
One-Month LIBOR plus 0.64%, in the case of any Payment Date thereafter.
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With respect to the Class M-1 Notes, a per annum rate equal to
One-Month LIBOR plus 0.60%, in the case of each Payment Date through and
including the Payment Date on which the aggregate Note Balance is reduced to
less than 20% of the aggregate initial Note Balance, or One-Month LIBOR plus
0.90%, in the case of any Payment Date thereafter.
With respect to the Class M-2 Notes, a per annum rate equal to
One-Month LIBOR plus 0.80%, in the case of each Payment Date through and
including the Payment Date on which the aggregate Note Balance is reduced to
less than 20% of the aggregate initial Note Balance, or One-Month LIBOR plus
1.20%, in the case of any Payment Date thereafter.
With respect to the Class M-3 Notes, a per annum rate equal to
One-Month LIBOR plus 1.85%, in the case of each Payment Date through and
including the Payment Date on which the aggregate Note Balance is reduced to
less than 20% of the aggregate initial Note Balance, or One-Month LIBOR plus
2.775%, in the case of any Payment Date thereafter.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Issuer, the Master Servicer or any
Servicer acceptable to the Indenture Trustee.
"Original Mortgage Loan": Any of the Mortgage Loans included in the
Trust Estate as of the Closing Date.
"Outstanding": With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Indenture Trustee for cancellation;
(ii) Notes or portions thereof for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent (other than the Issuer) in trust for the
Holders of such Notes; provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor, satisfactory to the Indenture Trustee, has
been made; and
(iii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such Note
are held by a holder in due course.
"Overcollateralized Amount": With respect to any Payment Date, the
excess, if any, of (a) the aggregate Stated Principal Balances of the Mortgage
Loans immediately following such Payment Date over (b) the sum of the aggregate
Note Balances of the Notes as of such Payment Date (after taking into account
the payment of the amounts described in clauses (b)(i) through (iv) of the
definition of Principal Payment Amount on such Payment Date).
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"Overcollateralization Deficiency Amount": With respect to any Payment
Date, the excess, if any, of (a) the Required Overcollateralized Amount
applicable to such Payment Date over (b) the Overcollateralized Amount
applicable to such Payment Date prior to taking into account the payment of any
Overcollateralization Increase Amount on such Payment Date.
"Overcollateralization Increase Amount": With respect to any Payment
Date, the lesser of (a) the Overcollateralization Deficiency Amount as of such
Payment Date (after taking into account the payment of the Principal Payment
Amount on such Payment Date, exclusive of the payment of any
Overcollateralization Increase Amount) and (b) the amount of Net Monthly Excess
Cashflow on such Payment Date as reduced by Realized Losses allocated thereto
with respect to such Payment Date pursuant to Section 3.06.
"Overcollateralization Reduction Amount": With respect to any Payment
Date, an amount equal to the lesser of (a) the Excess Overcollateralized Amount
and (b) the sum of the amounts available for distribution specified in clauses
(b)(i) through (iii) of the definition of Principal Payment Amount.
"Owner Trust Agreement": The trust agreement, dated as of September 1,
1998, as amended and restated by the amended and restated trust agreement, dated
as of September 1, 1998, between the Owner Trustee and the Depositor.
"Owner Trustee": Wilmington Trust Company, not in its individual
capacity, but solely as Owner Trustee of the Issuer, and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Owner Trust Agreement.
"Owner Trustee Fee": A one-time fee of $15,000.
"Ownership Interest": As to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or pledgee.
"Ownership Transfer Agreement": The Ownership Transfer Agreement,
dated as of September 1, 1998 between the Transferor and the Depositor.
"Paying Agent": Any paying agent or co-paying agent appointed pursuant
to Section 3.03 of the Indenture, which initially shall be the Indenture
Trustee.
"Payment Account": The trust account or accounts created and
maintained by the Indenture Trustee pursuant to Section 3.01 of the Indenture
which shall be entitled "Norwest Bank Minnesota, National Association, as
Indenture Trustee, in trust for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc. Asset-Backed Floating Rate Notes, Series 1998-11".
The Payment Account must be an Eligible Account.
"Payment 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 October 1998.
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"Percentage Interest": With respect to any Class of Notes, the portion
of the respective Class evidenced by such Note, expressed as a percentage, the
numerator of which is the initial Note Balance represented by such Note, and the
denominator of which is the initial aggregate Note Balance of all of the Notes
of such Class. The Notes are issuable only in Percentage Interests corresponding
to minimum initial Note Balances of $10,000 and integral multiples of $1.00 in
excess thereof; provided, however, that a single Note of each Class may be
issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Note Balance of such Note or to an otherwise authorized
denomination for such Class plus such remainder.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage Rate
for such Mortgage Loan may increase or decrease (without regard to the Maximum
Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the
Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Issuer, the Servicers, the Master Servicer, the
Indenture Trustee or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository Institution
(acting as principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or
on a specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency
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that rates such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Indenture Trustee or an Affiliate thereof, that have been
rated "AAA" by DCR (if rated by DCR) and "AAA" by S&P; and
(viii) if previously confirmed in writing to the Indenture
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 Notes;
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 Investments may be purchased by or through Affiliates of the
Indenture Trustee.
"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 related Servicer in respect of any Payment Date pursuant to Section
4.01 of the related Servicing Agreement.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the related Servicer from a
Mortgagor in connection with any voluntary Principal Prepayment in full pursuant
to the terms of the related Mortgage Note as from time to time held as a part of
the Trust Estate, the Prepayment Charges so held being identified in the related
prepayment charge schedule attached to the related Servicing Agreement.
"Prepayment Interest Shortfall": With respect to any Payment 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 related
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 Mortgage Loan Remittance 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 related Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24 of the related Servicing
Agreement.
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"Prepayment Period": With respect to any Payment Date, the calendar
month preceding the calendar month in which such Payment Date occurs.
"Principal Payment Amount": With respect to any Payment Date, other
than the Final Maturity Date and the Payment Date immediately following the
acceleration of the Notes due to an Event of Default, the lesser of:
(a) the excess of the Available Payment Amount over the amount
payable on the Notes pursuant to Section 3.05(a)(1); and
(b) the sum of:
(i) the principal portion of each Monthly Payment on the Mortgage
Loans due during the related Due Period, whether or not received
on or prior to the related Determination Date;
(ii) the Stated Principal Balance of any Mortgage Loan that was
purchased during the related Prepayment Period pursuant to or as
contemplated by Section 2.01 or Section 3.16(c) of any of the
Servicing Agreements and the amount of any shortfall deposited in
any of the Collection Accounts in connection with the
substitution of a Deleted Mortgage Loan pursuant to Section 2.01
of any of the Servicing Agreements during the related Prepayment
Period;
(iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds and REO Principal Amortization)
received during the related Prepayment Period, net of any portion
thereof that represents a recovery of principal for which an
advance was made by any of the Servicers pursuant to Section 4.01
of any of the Servicing Agreements in respect of a preceding
Payment Date;
(iv) the principal portion of any Realized Losses incurred or
deemed to have been incurred on the Mortgage Loans in the
calendar month preceding such Payment Date; and
(v) the amount of any Overcollateralization Increase Amount for
such Payment Date;
minus:
(vi) the amount of any Overcollateralization Reduction Amount for
such Payment Date.
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On the Final Maturity Date or on the Payment Date immediately
following the acceleration of the Notes due to any Event of Default, the
"Principal Payment Amount" payable on each class of Notes will be an amount
equal to the Note Balance thereof immediately prior to such Final Maturity Date
or such Payment Date.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest (without regard to any
prepayment charge that may have been collected by the related Servicer in
connection with such payment of principal) representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased (i) pursuant to or as contemplated by Section 2.01 or Section
3.16(c) of the related Servicing Agreement, and as confirmed by an Officers'
Certificate from the related Servicer to the Indenture Trustee or (ii) in
connection with a partial redemption as described in Section 8.07(b) of the
Indenture, an amount equal to the sum of: (i) 100% of the Stated Principal
Balance thereof as of the date of purchase, (ii) in the case of (x) a Mortgage
Loan, accrued interest on such Stated Principal Balance at the applicable
Mortgage Loan Remittance 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 related Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to the Indenture, 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
Mortgage Loan Remittance 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 related 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; (iii) any unreimbursed Servicing Advances and P&I Advances and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property; (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Sections 3.11(ix) and Section 3.16(b)
of the related Servicing Agreement; and (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.01 of the related Servicing
Agreement, expenses reasonably incurred or to be incurred by the related
Servicer or the Indenture Trustee in respect of the breach or defect giving rise
to the purchase obligation.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of the related Servicing Agreement
and the Mortgage Loan Purchase Agreement which must, on the date of such
substitution, (i) have an outstanding principal
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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 each Adjustable Rate
Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage
Rate on the Deleted Mortgage Loan, (iv) with respect to each Adjustable Rate
Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage
Rate of the Deleted Mortgage Loan, (v) with respect to each Adjustable Rate
Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted
Mortgage Loan, (vi) with respect to each Adjustable Rate Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (viii) have the same Due Date as the Due Date on the Deleted Mortgage
Loan, (ix) have a Loan-to-Value Ratio as of the date of substitution equal to or
lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date,
(x) have a risk grading determined by the related Servicer at least equal to the
risk grading assigned on the Deleted Mortgage Loan and (xi) conform to each
representation and warranty set forth in Exhibit 2 to the Mortgage Loan Purchase
Agreement applicable to the Deleted Mortgage Loan. In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Mortgage Rates, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (vii) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (ix) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xi) hereof must be satisfied
as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be.
"Rating Agency" or "Rating Agencies": DCR and S&P or their successors.
If such agencies or their successors are no longer in existence, "Rating
Agencies" shall be such nationally recognized statistical rating agencies, or
other comparable Persons, designated by the Issuer, notice of which designation
shall be given to the Indenture Trustee, the Master Servicer and the Servicers.
"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 Payment Date during such calendar month, plus (iii) any amounts previously
withdrawn from the related Collection Account in respect of such
A-24
Mortgage Loan pursuant to Section 3.11(ix) and Section 3.16(b) of the related
Servicing Agreement, minus (iv) the proceeds, if any, received in respect of
such Mortgage Loan during the calendar month in which such Final Recovery
Determination was made, net of amounts that are payable therefrom to the related
Servicer with respect to such Mortgage Loan pursuant to Section 3.11(iii) of the
related Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the Trust Estate, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during such
period (A) at an annual rate equal to the annual rate at which interest was then
accruing on the related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the close of
business on the Payment Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the related Collection Account in respect
of the related Mortgage Loan pursuant to Section 3.11(ix) and Section 3.16(b) of
the related Servicing Agreement, minus (v) the aggregate of all P&I Advances
made by the related Servicer in respect of such REO Property or the related
Mortgage Loan for which such Servicer has been or, in connection with such Final
Recovery Determination, will be reimbursed pursuant to Section 3.23 of the
related Servicing Agreement out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Payment Account
pursuant to Section 3.23 of the related Servicing Agreement.
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 Payment Date and any Note (other
than Definitive Notes), the Business Day immediately preceding such Payment
Date. With respect to each Payment Date and any Definitive Notes or the Equity
Certificates, the last Business Day of the month immediately preceding the month
in which such Payment Date occurs.
A-25
"Reference Banks": Bankers Trust Company, Xxxxxxx'x Bank PLC, The
Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Indenture
Trustee which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Depositor, the Issuer or any Affiliate thereof and (iii) which have been
designated as such by the Indenture Trustee.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
"Related Documents": With respect to each Mortgage Loan, the documents
specified in Section 2.4(b) of the Mortgage Loan Purchase Agreement and Section
2.03 of the Indenture and any documents required to be added to such documents
pursuant to the Mortgage Loan Purchase Agreement, the Owner Trust Agreement, the
Indenture or the applicable Servicing Agreement.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Remittance Report": A report in form and substance that would be
acceptable to Xxxxxx Xxx on a magnetic disk or tape prepared by the related
Servicer pursuant to Section 4.01 of the related Servicing Agreement with such
additions, deletions and modifications as agreed to by the Indenture Trustee and
the related Servicer.
"REO Account": The account or accounts maintained by the related
Servicer in respect of an REO Property pursuant to Section 3.23 of the related
Servicing Agreement.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Estate.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Estate, one
month's interest at the applicable Mortgage Loan Remittance Rate on the Stated
Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan if appropriate) as of the close of
business on the Payment 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 or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) of the related Servicing
Agreement in respect of the proper operation, management and maintenance of such
REO Property or (ii) payable or reimbursable to the related Servicer pursuant to
Section 3.23(d) of the related Servicing Agreement for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO
A-26
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 related Servicer
on behalf of the Trust Estate through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23 of the related Servicing Agreement.
"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 42 United
States Code, Section 5402(6)).
"Responsible Officer": When used with respect to the Indenture
Trustee, the Chairman or Vice Chairman of the Board of Directors or Trustees,
the Chairman or Vice Chairman of the Executive or Standing Committee of the
Board of Directors or Trustees, the President, the Chairman of the Committee on
Trust Matters, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer, the Cashier,
any assistant cashier, any trust officer or assistant trust officer, the
Controller and any assistant controller or any other officer of the Indenture
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.
"Required Overcollateralized Amount": With respect to any Payment Date
(i) prior to the Stepdown Date, $6,664,964.19, (ii) on or after the Stepdown
Date provided a Trigger Event is not in effect, the greater of (x) 3.50% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period and (y) $2,856,405, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralized Amount
for the immediately preceding Payment Date.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Indenture Trustee determines to be either (i)
the arithmetic mean (rounded upwards if necessary to the nearest whole multiple
of 1/16%) of the one-month U.S. dollar lending rates which New York City banks
selected by the Indenture Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
which New York City banks selected by the Indenture Trustee are quoting on such
Interest Determination Date to leading European banks.
"Sale": The meaning assigned in Section 5.15 of the Indenture.
"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
A-27
Due Date subsequent to the Cut-off Date up to and including the Due Date in the
calendar month in which a Liquidation Event occurs with respect to such Mortgage
Loan, the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off
Date, minus the sum of (i) the principal portion of each Monthly Payment due on
or before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Estate 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.
"Securities Act": The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller": Wilshire Real Estate Investment Trust Inc. or its successor
in interest, in its capacity as seller under the Mortgage Loan Purchase
Agreement.
"Servicers": Ameriquest Mortgage Company ("Ameriquest") or any
successor servicer appointed as provided in the related Servicing Agreement, in
its capacity as Servicer under such Servicing Agreement with respect to the
Mortgage Loans identified on Part A of Schedule 1 hereto, Long Beach Mortgage
Company ("Long Beach") or any successor servicer appointed as provided in the
related Servicing Agreement, in its capacity as Servicer under such Servicing
Agreement with respect to the Mortgage Loans identified on Part B of Schedule 1
hereto and National Mortgage Corporation ("National Mortgage") or any successor
servicer appointed as provided in the related Servicing Agreement, in its
capacity as Servicer under such Servicing Agreement with respect to the Mortgage
Loans identified on Part C and Part D of Schedule 1 hereto; provided however
that with respect to the Mortgage Loans identified on Part D of Schedule 1, the
servicing will be transferred to the Master Servicer on October 29, 1998.
References to "related Servicer," "applicable Servicer" and similar terms shall
mean the Servicer only with respect to the Mortgage Loans serviced by it.
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"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the related Servicer in connection with a default,
delinquency or other unanticipated event by such Servicer in the performance of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, in respect of a
particular Mortgage Loan, (iii) the management (including reasonable fees in
connection therewith) and liquidation of any REO Property, and (iv) the
performance of its obligations under Section 3.01, Section 3.09, Section 3.14,
Section 3.16 and Section 3.23 of the related Servicing Agreement. The related
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 such
Servicer, would not be ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
"Servicing Agreement": Any of the Servicing Agreements, dated as of
September 1, 1998 among the related Servicer, the Indenture Trustee and the
Issuer.
"Servicing Fee": With respect to each Mortgage Loan and each Servicer
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.
"Servicing Fee Rate": For each Servicer, 0.50% per annum.
"Servicing Officer": Any employee of the Master Servicer or the
related Servicer involved in, or responsible for, the administration and
servicing of the related Mortgage Loans, whose name and specimen signature
appear on a list of Servicing Officers furnished by the Master Servicer or such
Servicer, as applicable, to the Indenture Trustee and the Issuer on the Closing
Date, as such list may from time to time be amended.
"Single Note": With respect to any Class of Notes, a hypothetical Note
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Note Balance or $1,000. "S&P": Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as
of any date of determination up to but not including the Payment 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 related Servicer and distributed pursuant to the Indenture on or before such
date of determination,
A-29
(ii) all Principal Prepayments received after the Cut-off Date, to the extent
distributed pursuant to the Indenture on or before such date of determination,
(iii) all Liquidation Proceeds and Insurance Proceeds applied by the related
Servicer as recoveries of principal in accordance with the provisions of Section
3.16 of the related Servicing Agreement, to the extent distributed pursuant to
the Indenture 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 Payment Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Payment 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 Payment 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 Estate, minus the sum of (i) if such REO
Property was acquired before the Payment 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 Servicer and distributed
pursuant to the Indenture 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
the Indenture on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Payment Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, zero.
"Stayed Funds": If the related Servicer is the subject of a proceeding
under the federal Bankruptcy Code and the making of a Remittance (as defined in
Section 6.02(b) of the related Servicing Agreement) is prohibited by Section 362
of the federal Bankruptcy Code, funds which are in the custody of such Servicer,
a trustee in bankruptcy or a federal bankruptcy court and should have been the
subject of such Remittance absent such prohibition.
"Stepdown Date": The later to occur of (i) the Payment Date occurring
in October 2001 and (ii) the first Payment Date on which the Credit Enhancement
Percentage (calculated for this purpose only after taking into account payments
of principal on the Mortgage Loans but prior to any payment of the Principal
Payment Amount to the Notes then entitled to payments of principal on such
Payment Date) is equal to or greater than 37.30%.
"Subordinate Note": Any Class M-1 Note, Class M-2 Note or Class M-3
Note.
"Sub-Servicer": Any Person with which any Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02 of the related Servicing Agreement.
"Sub-Servicing Agreement": The written contract between the related
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of the related Servicing Agreement.
A-30
"Telerate Page 3750": The display designated as page "3750" on the Dow
Xxxxx Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"Transferor": Wilshire REIT 1998-1, Inc.
"Treasury Regulations": Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trigger Event": A Trigger Event has occurred with respect to a
Payment Date if the Delinquency Percentage exceeds the lesser of (i) 35.00% of
the Credit Enhancement Percentage or (ii) 13.055%.
"Trust Estate": The meaning specified in the Granting Clause of the
Indenture.
"Trust Indenture Act or TIA": The Trust Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.
"UCC": The Uniform Commercial Code, as amended from time to time, as
in effect in any specified jurisdiction.
"Underwriter": Xxxxxxx Xxxxx Xxxxxx Inc.
"Underwriting Agreement": means the Underwriting Agreement between the
Underwriter and the Depositor with respect to the offer and sale of the Notes,
as the same may be amended from time to time.
"Value": With respect to any Mortgaged Property, the lesser of (i) the
value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of Xxxxxx Xxx and Freddie Mac, 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 who met the minimum requirements of Xxxxxx Xxx and Freddie Mac.
"Voting Rights": The portion of the voting rights of all of the Notes
which is allocated to any Note. At all times during the term of this Agreement,
(i) 100% of all of the Voting Rights shall be allocated to the Most Senior Class
of Notes, in proportion to their then outstanding Note Balances. All Voting
Rights allocated to any Class of Notes shall be allocated among such Notes PRO
RATA in accordance with the respective Percentage Interests evidenced thereby.
A-31
A-1-1
EXHIBIT A-1
FORM OF CLASS A NOTE
WILSHIRE REIT TRUST SERIES 1998-1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED FLOATING RATE NOTES, SERIES 1998-11
THIS NOTE REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER
AND WILL BE PAID SOLELY FROM THE COLLATERAL SECURING THE
NOTE. NEITHER THIS NOTE NOR THE COLLATERAL THEREFOR IS
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.
PAYMENTS IN REDUCTION OF THE NOTE BALANCE OF THIS NOTE MAY
BE MADE MONTHLY AS SET FORTH IN THE INDENTURE REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
Series 1998-11, Class A Aggregate Note Balance of the
Class A Notes as of the Issue
Note Interest Rate: Variable Date: $_________________
Date of Indenture and Cut-off Date: Initial Note Balance of this Note
September 1, 1998 as of the Issue Date: $_________
First Payment Date: Master Servicer: Wilshire
October 26, 1998 Servicing Corporation
Issuer: Wilshire REIT Trust Series 1998-1 Indenture Trustee: Norwest Bank
Minnesota, National Association
Owner Trustee: Wilmington Trust Company
Issue Date: September __, 1998
No. ___
Final Maturity Date: ___________
CUSIP: 971890 ___ ___
A-1-2
This certifies that _____________ is the registered owner (the
"Holder") of a Percentage Interest (obtained by dividing the denomination of
this Note by the aggregate Note Balance of the Class A Notes as of the Issue
Date) of this Class A Note issued by the Issuer referred to above pursuant to
the Indenture, dated as of September 1, 1998 (the "Indenture"), between the
Issuer referred to above and the Indenture Trustee referred to above, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein have the respective
meanings assigned in the Indenture. This Class A Note is issued under and is
subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Class A Note by virtue of the acceptance hereof
assents and by which such Holder is bound. This Class A Note is one of a duly
authorized issue of Notes designated as Asset-Backed Floating Rate Notes of the
Series specified on the face hereof (herein called the "Notes").
Pursuant to the terms of the Indenture, payments 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 "Payment Date"), commencing on the First Payment
Date specified above, to the Person in whose name this Note is registered on the
Business Day immediately preceding such Payment Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this Note
and the amount required to be paid to the Holders of Class A Notes on such
Payment Date pursuant to the Indenture.
All payments to the Holder of this Note under the Indenture will be
made or caused to be made by or on behalf of the Indenture Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Indenture Trustee in writing
at least five Business Days prior to the Record Date immediately prior to such
Payment Date and is the registered owner of Class A Notes the aggregate initial
Note Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Note Balance of the Class A Notes, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Note Register.
Notwithstanding the above, the final payment on this Note will be made after due
notice by the Indenture Trustee of the pendency of such payment and only upon
presentation and surrender of this Note at the office or agency appointed by the
Indenture Trustee for that purpose as provided in the Indenture.
The Note Interest Rate applicable to the calculation of interest
payable with respect to this Note on any Payment Date shall equal a rate per
annum equal to the lesser of (i) One-Month LIBOR plus _____%, in the case of
each Payment Date through and including the Payment Date on which the aggregate
Note Balance is reduced to less than 20% of the aggregate initial Note Balance,
or One-Month LIBOR plus _____% per annum, in the case of any Payment Date
thereafter, and (ii) the Maximum Note Interest Rate.
The Notes 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 Indenture. As provided in the Indenture and the other Basic
Documents, withdrawals from the Collection
A-1-3
Accounts and the Payment Account may be made from time to time for purposes
other than payments to Noteholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note Register
upon surrender of this Note for registration of transfer at the offices or
agencies appointed by the Indenture Trustee as provided in the Indenture, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Notes of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Notes are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes are exchangeable for new Notes 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 Notes, but the Indenture 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 Notes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, and none of the Issuer, the Indenture Trustee
nor any such agent shall be affected by notice to the contrary.
All principal and interest on the Notes, if not previously paid, will
become finally due and payable on the Final Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on which the aggregate Note
Balance is reduced to less than 20% of the aggregate initial Note Balance as of
the Cut-off Date.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Master
Servicer, the Servicers or any of
A-1-4
their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuer pledged to secure the Notes pursuant to the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Balance of this Note, together with accrued
and unpaid interest and described in the Indenture. The Indenture provides that
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Interest Payment Amount, Principal Payment
Amount or any Overcollateralization Increase Amount at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of a majority of the Notes
affected thereby. The Indenture also contains provisions permitting the Holders
of the Most Senior Class of Notes representing specified percentages of the
aggregate Note Balance of such Class of Notes on behalf of the Holders of all
the Notes, to waive any past Event of Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Note (or any one or more predecessor Notes) shall bind the Holder of
every Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Note. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Notes issued thereunder.
The recitals contained herein shall be taken as statements of the
Issuer and the Indenture Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid for any purpose.
A-1-5
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: September __, 1998
WILSHIRE REIT TRUST SERIES 1998-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely in its
capacity as Owner Trustee
By:______________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
-------------------------------------------------
This is one of the Class A Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Indenture Trustee
By:__________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right __________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Floating Rate Note and hereby authorize(s) the registration of transfer of such
interest to assignee on the Note Register of the Trust Estate.
I (we) further direct the Indenture Trustee to issue a new Note of a
like Percentage Interest and Class to the above named assignee and deliver such
Note to the following address: ________________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
_______________________________________________________________________________
for the account of ____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________, as its agent.
EXHIBIT A-2
-----------
FORM OF CLASS M-1 NOTE
WILSHIRE REIT TRUST SERIES 1998-1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED FLOATING RATE NOTES, SERIES 1998-11
THIS NOTE REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER
AND WILL BE PAID SOLELY FROM THE COLLATERAL SECURING THE
NOTE. NEITHER THIS NOTE NOR THE COLLATERAL THEREFOR IS
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.
PAYMENTS IN REDUCTION OF THE NOTE BALANCE OF THIS NOTE MAY
BE MADE MONTHLY AS SET FORTH IN THE INDENTURE REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
Series 1998-11, Class M-1 Aggregate Note Balance of the
Class M-1 Notes as of the Issue
Note Interest Rate: Variable Date: $__________________
Date of Indenture and Cut-off Date: Initial Note Balance of this Note
September 1, 1998 as of the Issue Date: $__________
First Payment Date: Master Servicer: Wilshire
October 26, 1998 Servicing Corporation
Issuer: Wilshire REIT Trust Series 1998-1 Indenture Trustee: Norwest Bank
Minnesota, National Association
Owner Trustee: Wilmington Trust
Company Issue Date: September __, 1998
No. ___ Final Maturity Date: ___________
CUSIP: 971890 ___ ___
A-2-2
This certifies that _____________ is the registered owner (the
"Holder") of a Percentage Interest (obtained by dividing the denomination of
this Note by the aggregate Note Balance of the Class M-1 Notes as of the Issue
Date) of this Class M-1 Note issued by the Issuer referred to above pursuant to
the Indenture, dated as of September 1, 1998 (the "Indenture"), between the
Issuer referred to above and the Indenture Trustee referred to above, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein have the respective
meanings assigned in the Indenture. This Class M-1 Note is issued under and is
subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Class M-1 Note by virtue of the acceptance hereof
assents and by which such Holder is bound. This Class M-1 Note is one of a duly
authorized issue of Notes designated as Asset-Backed Floating Rate Notes of the
Series specified on the face hereof (herein called the "Notes").
Pursuant to the terms of the Indenture, payments 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 "Payment Date"), commencing on the First Payment
Date specified above, to the Person in whose name this Note is registered on the
Business Day immediately preceding such Payment Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this Note
and the amount required to be paid to the Holders of Class M-1 Notes on such
Payment Date pursuant to the Indenture.
All payments to the Holder of this Note under the Indenture will be
made or caused to be made by or on behalf of the Indenture Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Indenture Trustee in writing
at least five Business Days prior to the Record Date immediately prior to such
Payment Date and is the registered owner of Class M-1 Notes the aggregate
initial Note Balance of which is in excess of the lesser of (i) $5,000,000 or
(ii) two-thirds of the aggregate initial Note Balance of the Class M-1 Notes, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Note Register.
Notwithstanding the above, the final payment on this Note will be made after due
notice by the Indenture Trustee of the pendency of such payment and only upon
presentation and surrender of this Note at the office or agency appointed by the
Indenture Trustee for that purpose as provided in the Indenture.
The Note Interest Rate applicable to the calculation of interest
payable with respect to this Note on any Payment Date shall equal a rate per
annum equal to the lesser of (i) One-Month LIBOR plus _____%, in the case of
each Payment Date through and including the Payment Date on which the aggregate
Note Balance is reduced to less than 20% of the aggregate initial Note Balance,
or One-Month LIBOR plus _____% per annum, in the case of any Payment Date
thereafter, and (ii) the Maximum Note Interest Rate.
The Notes 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 Indenture. As provided in the Indenture and the other Basic
Documents, withdrawals from the Collection
A-2-3
Accounts and the Payment Account may be made from time to time for purposes
other than payments to Noteholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note Register
upon surrender of this Note for registration of transfer at the offices or
agencies appointed by the Indenture Trustee as provided in the Indenture, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Notes of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Notes are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes are exchangeable for new Notes 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 Notes, but the Indenture 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 Notes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, and none of the Issuer, the Indenture Trustee
nor any such agent shall be affected by notice to the contrary.
All principal and interest on the Notes, if not previously paid, will
become finally due and payable on the Final Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on which the aggregate Note
Balance is reduced to less than 20% of the aggregate initial Note Balance as of
the Cut-off Date.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Master
Servicer, the Servicers or any of
A-2-4
their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuer pledged to secure the Notes pursuant to the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Balance of this Note, together with accrued
and unpaid interest and described in the Indenture. The Indenture provides that
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Interest Payment Amount, Principal Payment
Amount or any Overcollateralization Increase Amount at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of a majority of the Notes
affected thereby. The Indenture also contains provisions permitting the Holders
of the Most Senior Class of Notes representing specified percentages of the
aggregate Note Balance of such Class of Notes on behalf of the Holders of all
the Notes, to waive any past Event of Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Note (or any one or more predecessor Notes) shall bind the Holder of
every Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Note. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Notes issued thereunder.
The recitals contained herein shall be taken as statements of the
Issuer and the Indenture Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: September __, 1998
WILSHIRE REIT TRUST SERIES 1998-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely in its
capacity as Owner Trustee
By:______________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
-------------------------------------------------
This is one of the Class M-1 Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Indenture Trustee
By:__________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right __________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Floating Rate Note and hereby authorize(s) the registration of transfer of such
interest to assignee on the Note Register of the Trust Estate.
I (we) further direct the Indenture Trustee to issue a new Note of a
like Percentage Interest and Class to the above named assignee and deliver such
Note to the following address: ________________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
_______________________________________________________________________________
for the account of ____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________, as its agent.
EXHIBIT A-3
-----------
FORM OF CLASS M-2 NOTE
WILSHIRE REIT TRUST SERIES 1998-1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED FLOATING RATE NOTES, SERIES 1998-11
THIS NOTE REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER
AND WILL BE PAID SOLELY FROM THE COLLATERAL SECURING THE
NOTE. NEITHER THIS NOTE NOR THE COLLATERAL THEREFOR IS
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.
PAYMENTS IN REDUCTION OF THE NOTE BALANCE OF THIS NOTE MAY
BE MADE MONTHLY AS SET FORTH IN THE INDENTURE REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
Series 1998-11, Class M-2 Aggregate Note Balance of the
Class M-2 Notes as of the Issue
Note Interest Rate: Variable Date: $___________________
Date of Indenture and Cut-off Date: Initial Note Balance of this Note
September 1, 1998 as of the Issue Date: $__________
First Payment Date: Master Servicer: Wilshire
October 26, 1998 Servicing Corporation
Issuer: Wilshire REIT Trust Series 1998-1 Indenture Trustee: Norwest Bank
Minnesota, National Association
Owner Trustee: Wilmington Trust
Company Issue Date: September __, 1998
No. ___ Final Maturity Date: ___________
CUSIP: 971890 ___ ___
A-3-2
This certifies that _____________ is the registered owner (the
"Holder") of a Percentage Interest (obtained by dividing the denomination of
this Note by the aggregate Note Balance of the Class M-2 Notes as of the Issue
Date) of this Class M-2 Note issued by the Issuer referred to above pursuant to
the Indenture, dated as of September 1, 1998 (the "Indenture"), between the
Issuer referred to above and the Indenture Trustee referred to above, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein have the respective
meanings assigned in the Indenture. This Class M-2 Note is issued under and is
subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Class M-2 Note by virtue of the acceptance hereof
assents and by which such Holder is bound. This Class M-2 Note is one of a duly
authorized issue of Notes designated as Asset-Backed Floating Rate Notes of the
Series specified on the face hereof (herein called the "Notes").
Pursuant to the terms of the Indenture, payments 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 "Payment Date"), commencing on the First Payment
Date specified above, to the Person in whose name this Note is registered on the
Business Day immediately preceding such Payment Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this Note
and the amount required to be paid to the Holders of Class M-2 Notes on such
Payment Date pursuant to the Indenture.
All payments to the Holder of this Note under the Indenture will be
made or caused to be made by or on behalf of the Indenture Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Indenture Trustee in writing
at least five Business Days prior to the Record Date immediately prior to such
Payment Date and is the registered owner of Class M-2 Notes the aggregate
initial Note Balance of which is in excess of the lesser of (i) $5,000,000 or
(ii) two-thirds of the aggregate initial Note Balance of the Class M-2 Notes, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Note Register.
Notwithstanding the above, the final payment on this Note will be made after due
notice by the Indenture Trustee of the pendency of such payment and only upon
presentation and surrender of this Note at the office or agency appointed by the
Indenture Trustee for that purpose as provided in the Indenture.
The Note Interest Rate applicable to the calculation of interest
payable with respect to this Note on any Payment Date shall equal a rate per
annum equal to the lesser of (i) One-Month LIBOR plus _____%, in the case of
each Payment Date through and including the Payment Date on which the aggregate
Note Balance is reduced to less than 20% of the aggregate initial Note Balance,
or One-Month LIBOR plus _____% per annum, in the case of any Payment Date
thereafter, and (ii) the Maximum Note Interest Rate.
The Notes 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 Indenture. As provided in the Indenture and the other Basic
Documents, withdrawals from the Collection
A-3-3
Accounts and the Payment Account may be made from time to time for purposes
other than payments to Noteholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note Register
upon surrender of this Note for registration of transfer at the offices or
agencies appointed by the Indenture Trustee as provided in the Indenture, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or such Xxxxxx's attorney duly authorized in
writing, and thereupon one or more new Notes of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Notes are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes are exchangeable for new Notes 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 Notes, but the Indenture 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 Notes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, and none of the Issuer, the Indenture Trustee
nor any such agent shall be affected by notice to the contrary.
All principal and interest on the Notes, if not previously paid, will
become finally due and payable on the Final Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on which the aggregate Note
Balance is reduced to less than 20% of the aggregate initial Note Balance as of
the Cut-off Date.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Master
Servicer, the Servicers or any of
A-3-4
their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuer pledged to secure the Notes pursuant to the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Balance of this Note, together with accrued
and unpaid interest and described in the Indenture. The Indenture provides that
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Interest Payment Amount, Principal Payment
Amount or any Overcollateralization Increase Amount at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of a majority of the Notes
affected thereby. The Indenture also contains provisions permitting the Holders
of the Most Senior Class of Notes representing specified percentages of the
aggregate Note Balance of such Class of Notes on behalf of the Holders of all
the Notes, to waive any past Event of Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Note (or any one or more predecessor Notes) shall bind the Holder of
every Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Note. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Notes issued thereunder.
The recitals contained herein shall be taken as statements of the
Issuer and the Indenture Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: September __, 1998
WILSHIRE REIT TRUST SERIES 1998-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely in its
capacity as Owner Trustee
By:______________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
-------------------------------------------------
This is one of the Class M-2 Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Indenture Trustee
By:__________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right __________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Floating Rate Note and hereby authorize(s) the registration of transfer of such
interest to assignee on the Note Register of the Trust Estate.
I (we) further direct the Indenture Trustee to issue a new Note of a
like Percentage Interest and Class to the above named assignee and deliver such
Note to the following address: ________________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
_______________________________________________________________________________
for the account of ____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________, as its agent.
EXHIBIT A-4
-----------
FORM OF CLASS M-3 NOTE
WILSHIRE REIT TRUST SERIES 1998-1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED FLOATING RATE NOTES, SERIES 1998-11
THIS NOTE REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER
AND WILL BE PAID SOLELY FROM THE COLLATERAL SECURING THE
NOTE. NEITHER THIS NOTE NOR THE COLLATERAL THEREFOR IS
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR BY ANY OTHER PERSON.
PAYMENTS IN REDUCTION OF THE NOTE BALANCE OF THIS NOTE MAY
BE MADE MONTHLY AS SET FORTH IN THE INDENTURE REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN BELOW.
Series 1998-11, Class M-3 Aggregate Note Balance of the
Class M-3 Notes as of the Issue
Note Interest Rate: Variable Date: $_________________
Date of Indenture and Cut-off Date: Initial Note Balance of this Note
September 1, 1998 as of the Issue Date: $_________
First Payment Date: Master Servicer:
October 26, 1998 Wilshire Servicing Corporation
Issuer: Wilshire REIT Trust Series 1998-1 Indenture Trustee: Norwest Bank
Minnesota, National Association
Owner Trustee: Wilmington Trust
Company Issue Date: September __, 1998
No. ___ Final Maturity Date: ___________
CUSIP: 971890 ___ ___
A-4-2
This certifies that _____________ is the registered owner (the
"Holder") of a Percentage Interest (obtained by dividing the denomination of
this Note by the aggregate Note Balance of the Class M-3 Notes as of the Issue
Date) of this Class M-3 Note issued by the Issuer referred to above pursuant to
the Indenture, dated as of September 1, 1998 (the "Indenture"), between the
Issuer referred to above and the Indenture Trustee referred to above, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein have the respective
meanings assigned in the Indenture. This Class M-3 Note is issued under and is
subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Class M-3 Note by virtue of the acceptance hereof
assents and by which such Holder is bound. This Class M-3 Note is one of a duly
authorized issue of Notes designated as Asset-Backed Floating Rate Notes of the
Series specified on the face hereof (herein called the "Notes").
Pursuant to the terms of the Indenture, payments 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 "Payment Date"), commencing on the First Payment
Date specified above, to the Person in whose name this Note is registered on the
Business Day immediately preceding such Payment Date (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this Note
and the amount required to be paid to the Holders of Class M-3 Notes on such
Payment Date pursuant to the Indenture.
All payments to the Holder of this Note under the Indenture will be
made or caused to be made by or on behalf of the Indenture Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Indenture Trustee in writing
at least five Business Days prior to the Record Date immediately prior to such
Payment Date and is the registered owner of Class M-3 Notes the aggregate
initial Note Balance of which is in excess of the lesser of (i) $5,000,000 or
(ii) two-thirds of the aggregate initial Note Balance of the Class M-3 Notes, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Note Register.
Notwithstanding the above, the final payment on this Note will be made after due
notice by the Indenture Trustee of the pendency of such payment and only upon
presentation and surrender of this Note at the office or agency appointed by the
Indenture Trustee for that purpose as provided in the Indenture.
The Note Interest Rate applicable to the calculation of interest
payable with respect to this Note on any Payment Date shall equal a rate per
annum equal to the lesser of (i) One-Month LIBOR plus _____%, in the case of
each Payment Date through and including the Payment Date on which the aggregate
Note Balance is reduced to less than 20% of the aggregate initial Note Balance,
or One-Month LIBOR plus _____% per annum, in the case of any Payment Date
thereafter, and (ii) the Maximum Note Interest Rate.
The Notes 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 Indenture. As provided in the Indenture and the other Basic
Documents, withdrawals from the Collection
A-4-3
Accounts and the Payment Account may be made from time to time for purposes
other than payments to Noteholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note Register
upon surrender of this Note for registration of transfer at the offices or
agencies appointed by the Indenture Trustee as provided in the Indenture, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Notes of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Notes are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes are exchangeable for new Notes 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 Notes, but the Indenture 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 Notes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, and none of the Issuer, the Indenture Trustee
nor any such agent shall be affected by notice to the contrary.
All principal and interest on the Notes, if not previously paid, will
become finally due and payable on the Final Maturity Date.
The Notes are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on which the aggregate Note
Balance is reduced to less than 20% of the aggregate initial Note Balance as of
the Cut-off Date.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Master
Servicer, the Servicers or any of
A-4-4
their respective affiliates, or to the assets of any of the foregoing entities,
except the assets of the Issuer pledged to secure the Notes pursuant to the
Indenture.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Balance of this Note, together with accrued
and unpaid interest and described in the Indenture. The Indenture provides that
notwithstanding the acceleration of the maturity of the Notes, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Notes or otherwise shall continue to be applied to payments
of principal of and interest on the Notes as if they had not been declared due
and payable.
The failure to pay any Interest Payment Amount, Principal Payment
Amount or any Overcollateralization Increase Amount at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of a majority of the Notes
affected thereby. The Indenture also contains provisions permitting the Holders
of the Most Senior Class of Notes representing specified percentages of the
aggregate Note Balance of such Class of Notes on behalf of the Holders of all
the Notes, to waive any past Event of Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Note (or any one or more predecessor Notes) shall bind the Holder of
every Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Note. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Notes issued thereunder.
The recitals contained herein shall be taken as statements of the
Issuer and the Indenture Trustee assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee, by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: September __, 1998
WILSHIRE REIT TRUST SERIES 1998-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely in its
capacity as Owner Trustee
By:______________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
-------------------------------------------------
This is one of the Class M-3 Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Indenture Trustee
By:__________________________________
Authorized Signatory
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right __________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Floating Rate Note and hereby authorize(s) the registration of transfer of such
interest to assignee on the Note Register of the Trust Estate.
I (we) further direct the Indenture Trustee to issue a new Note of a
like Percentage Interest and Class to the above named assignee and deliver such
Note to the following address: ________________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________
_______________________________________________________________________________
for the account of ____________________________, account number ______________,
or, if mailed by check, to ____________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________, as its agent.
EXHIBIT B-1
-----------
FORM OF INDENTURE TRUSTEE'S INITIAL CERTIFICATION
[Date]
[Seller]
[Depositor]
[Issuer]
Re: Indenture, dated as of September 1, 1998, between Wilshire REIT Trust
Series 1998-1 and Norwest Bank Minnesota, National Association Asset-
Backed Floating Rate Notes, Series 1998-11
---------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.03(c) of the Indenture, attached hereto is the
Custodial Initial Certification delivered by Chase Bank of Texas, National
Association, as Custodian, pursuant to the Custodial Agreement dated as of
September 1, 1998, by and among Norwest Bank Minnesota, National Association,
Wilshire REIT Trust Series 1998-1, Wilshire Servicing Corporation, Ameriquest
Mortgage Company, Long Beach Mortgage Company, National Mortgage Company and
Chase Bank of Texas, National Association.
The Indenture Trustee (nor the Custodian on its behalf) has made no
independent examination of any documents contained in each Mortgage File beyond
the review specifically required in the above-referenced Indenture. The
Indenture Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability due authorization, recordability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:______________________________
Name:
Title:
EXHIBIT B-2
-----------
FORM OF INDENTURE TRUSTEE FINAL CERTIFICATION
[Date]
[Seller]
[Depositor]
[Issuer]
Re: Indenture, dated as of September 1, 1998, between Wilshire REIT Trust
Series 1998-1 and Norwest Bank Minnesota, National Association Asset-
Backed Floating Rate Notes, Series 1998-11
--------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.03(C) of the above-captioned Indenture, the
undersigned, as Indenture Trustee, hereby certifies that as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attachment hereto), it or a Custodian on its behalf has
received:
(i) the original recorded Mortgage, and the original recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, or
a certified copy thereof in those instances where the public recording
office retains the original or where the original has been lost; and
(ii) an original recorded Assignment of the Mortgage to the Indenture
Trustee together with the original recorded Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the originator, or
a certified copy of such Assignments in those instances where the public
recording retains the original or where original has been lost; and
(iii) the original lender's title insurance policy.
The Indenture Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Indenture. The Indenture Trustee makes no representations as
to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
B-2-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:____________________________
Name:
Title:
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of September 30, 1998, by and among NORWEST
BANK MINNESOTA, NATIONAL ASSOCIATION, not individually, but solely as Indenture
Trustee (including its successors under the Indenture defined below, the
"Indenture Trustee"), WILSHIRE SERVICING CORPORATION (together with any
successor in interest or successor under the Servicing Agreements referred to
below, the "Master Servicer"), AMERIQUEST MORTGAGE COMPANY (together with any
successor in interest or successor under the related Servicing Agreement
referred to below, "Ameriquest" or a "Servicer"), LONG BEACH MORTGAGE COMPANY
(together with any successor in interest or successor under the related
Servicing Agreement referred to below, "Long Beach" or a "Servicer"), NATIONAL
MORTGAGE CORPORATION (together with any successor in interest or successor under
the related Servicing Agreement referred to below, "National Mortgage" or a
"Servicer", and collectively with Ameriquest and Long Beach, the "Servicers"),
WILSHIRE REIT TRUST SERIES 1998-1 (the "Issuer") and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, (together with any successor in interest or any successor
appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T :
- - - - - - - - - - - - - -
WHEREAS, the Indenture Trustee and the Issuer have entered into an
Indenture, dated as of September 1, 1998, relating to the issuance of Salomon
Brothers Mortgage Securities VII, Inc., Asset-Backed Floating Rate Notes, Series
1998-11 (as in effect on the date of this Agreement, the "Original Indenture",
and as amended and supplemented from time to time, the "Indenture");
WHEREAS, the Indenture Trustee, the Issuer, the Master Servicer and
Ameriquest have entered into a Servicing Agreement, dated as of September 1,
1998, relating to the servicing of certain of the Mortgage Loans (as in effect
on the date of this Agreement, the "Original Ameriquest Servicing Agreement",
and as amended and supplemented from time to time, the "Ameriquest Servicing
Agreement");
WHEREAS, the Indenture Trustee, the Issuer, the Master Servicer and
Long Beach have entered into a Servicing Agreement, dated as of September 1,
1998, relating to the servicing of certain of the Mortgage Loans (as in effect
on the date of this Agreement, the "Original Long Beach Servicing Agreement",
and as amended and supplemented from time to time, the "Long Beach Servicing
Agreement");
WHEREAS, the Indenture Trustee, the Issuer, the Master Servicer and
National Mortgage have entered into a Servicing Agreement, dated as of September
1, 1998, relating to the servicing of certain of the Mortgage Loans (as in
effect on the date of this Agreement, the "Original National Mortgage Servicing
Agreement", and as amended and supplemented from
C-2
time to time, the "National Mortgage Servicing Agreement", and collectively with
the Ameriquest Servicing Agreement and the Long Beach Servicing Agreement, the
"Servicing Agreements");
WHEREAS, the Custodian has agreed to act as agent for the Indenture
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Issuer under the Indenture, all upon the terms and
conditions and subject to the limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Indenture Trustee, the
Issuer, the Master Servicer, the Servicers and the Custodian hereby agree as
follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned in the Original Indenture, unless otherwise required
by the context herein.
C-3
ARTICLE II
Custody of Mortgage Documents
Section 2.1. CUSTODIAN TO ACT AS AGENT; ACCEPTANCE OF MORTGAGE FILES.
The Custodian, as the duly appointed agent and bailee of the Indenture Trustee
for these purposes, hereby accepts the agency contemplated hereunder and
acknowledges receipt as of the Closing Date of the documents listed in Section
2.1(a) and (b) and, as agent for the Indenture Trustee, agrees to verify receipt
of the following documents pertaining to each of the Mortgage Loans identified
on the Mortgage Loan Schedule attached to the Indenture listed in Section
2.1(c), (d), (e) and (f) in accordance with Section 2.2 hereof:
(a) the original Mortgage Note, endorsed in one of the following
forms: (i) "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee, without recourse", (ii) "Pay to the order of
Norwest Bank Minnesota, National Association, as Trustee for the registered
holders of Salomon Brothers Mortgage Securities VII, Inc., Series 1996-LB3,
without recourse" or (iii) "Pay to the order of Norwest Bank Minnesota,
National Association, as Trustee for the registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Series 1997-LB1, without recourse",
in each case with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so endorsing in the
form as provided above;
(b) the original Mortgage with evidence of recording xxxxxxx, and the
original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon;
(c) an original Assignment of the Mortgage executed in one of the
following forms: (i) "Norwest Bank Minnesota, National Association, as
Trustee", (ii) "Norwest Bank Minnesota, National Association, as Trustee
for the registered holders of Salomon Brothers Mortgage Securities VII,
Inc., Series 1996-LB3" or (iii) "Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of Salomon Brothers
Mortgage Securities VII, Inc., Series 1997-LB1";
(d) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Indenture Trustee as contemplated by the
immediately preceding clause (c);
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all
endorsements or riders which were issued with or subsequent to the issuance
of such
C-4
policy, insuring the priority of the Mortgage as a first lien on the
Mortgaged Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is unavailable, a
written commitment or uniform binder or preliminary report of title issued
by the title insurance or escrow company.
In furtherance of facilitating the acknowledgment of such receipt by
the Custodian, the Indenture Trustee hereby instructs the Custodian to cause the
endorsement or execution, as the case may be, of the documents listed in Section
2.1(a) and (c) to be completed by the Custodian in the forms prescribed by
Section 2.1(a) and (c).
The Issuer, at the expense of the Seller, shall promptly (and in no
event later than five Business Days following the later of the Closing Date and
the date of receipt by the Issuer of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust
Estate, the Issuer, the Indenture Trustee, the Owner Trustee, the Depositor or
the Custodian, in the appropriate public office for real property records, each
Assignment referred to in clauses (c) and (d) of this Section 2.1. In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Issuer shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded.
If any of the documents referred to in Sections 2.1(b), (c) or (d)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Issuer to deliver such documents shall be deemed to be
satisfied upon (1) delivery by the Issuer or the Indenture Trustee to the
Custodian of a copy of each such document certified by the Seller in the case of
(x) above or the public recording office in the case of (y) above to be a true
and complete copy of the recorded original thereof and (2) if such copy is
certified by the Seller, delivery to the Custodian, promptly upon receipt
thereof of either the original or a copy of such document certified by the
public recording office to be a true and complete copy of the original. Upon
delivery to the Issuer or the Indenture Trustee (x) by the public recording
office of any recorded original Mortgage, power of attorney or Assignment or (y)
by a title insurance or escrow company of any lender's title insurance policy,
the Issuer or the Indenture Trustee, as the case may be, promptly shall (and in
no event later than five Business Days following such receipt) deliver such
document to the Custodian. The Issuer shall deliver or cause to be delivered to
the Custodian promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan. All Mortgage Loan documents
held by the Custodian as to each Mortgage Loan shall hereinafter be referred to
as the "Mortgage File".
C-5
In the event that any 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 Custodian.
In the event of any failure of any party to deliver any document as
provided above, the Custodian shall give prompt written notice of such failure
to the other parties to this Agreement. Once the Custodian has given notice of
such failure it is to continue to hold the Mortgage Loan and Mortgage File
unless otherwise directed by the Indenture Trustee.
The parties hereto agree and acknowledge that prior to the transfer
and sale of the Mortgage Loans pursuant to the Mortgage Loan Purchase Agreement,
the Ownership Transfer Agreement, the Owner Trust Agreement and the Indenture,
all Mortgage Loan documents delivered to the Custodian for the benefit of the
Issuer and the possession by the Custodian of such Mortgage Loan Documents shall
be at the will of the Issuer and such possession by the Custodian shall be in a
custodial capacity only.
Section 2.2. REVIEW OF MORTGAGE FILES. The Custodian agrees, for the
benefit of the Indenture Trustee and the Noteholders, to review each Mortgage
File on or before the Closing Date and to certify in substantially the form
attached hereto as Exhibit One that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.1(e))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it and appear regular on their face
and relate to such Mortgage Loan, and (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i) through (iii), (vi), (ix), (x), (xiii), (xvi) and
(xvii) through (xx) of the definition of "Mortgage Loan Schedule" accurately
reflects information set forth in the Mortgage File. It is herein acknowledged
that, in conducting such review, the Custodian is under no duty or obligation
(i) to inspect, review or examine any such documents, instruments, certificates
or other papers to determine that they are genuine, enforceable, or appropriate
for the represented purpose or that they have actually been recorded or that
they are other than what they purport to be on their face, or (ii) to determine
whether any Mortgage File should include any of the documents specified in
Section 2.1(e).
The Mortgage Files will be delivered to the Custodian not less than 2
days prior to the Closing Date.
Prior to the first anniversary date of this Agreement, the Custodian
shall deliver to the Indenture Trustee, the Seller, the Depositor and the Issuer
a final certification in the form annexed hereto as Exhibit Two evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
C-6
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above the
Custodian finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Custodian shall so notify the Indenture Trustee, the Seller, the
Depositor, the Issuer, the Master Servicer and the related Servicer.
Section 2.3. NOTIFICATION OF DEFECTS. Upon discovery by the Custodian
of a defect with respect to a Mortgage File (including without limitation a
missing or defective document contained therein), the Custodian shall give
prompt written notice specifying such defect to the Indenture Trustee.
Section 2.4. RELEASE OF MORTGAGE FILES. Upon (i) the payment in full
of any Mortgage Loan, or (ii) the purchase or repurchase of any Mortgage Loan as
contemplated by Section 2.01 of the related Servicing Agreement or (iii)
substitution of a Qualified Substitute Mortgage Loan for a Deleted Mortgage
Loan, and upon receipt by the Custodian of a certificate signed by a Servicing
Officer stating that all amounts required by the related Servicing Agreement in
connection with such payment, repurchase or substitution have been deposited in
the related Collection Account pursuant to Section 3.10 of the related Servicing
Agreement, the Custodian shall promptly release the related Mortgage File to the
Seller.
From time to time as appropriate for the servicing or foreclosure of
any Mortgage Loan, the Custodian, shall, upon request of the Master Servicer or
the related Servicer and delivery to the Custodian of a Request for Release,
substantially in the form set forth in Exhibit Three hereto), release the
related Mortgage File to the Master Servicer or the related Servicer, as the
case may be. Such Request for Release shall obligate the Master Servicer or the
related Servicer to return each and every document previously requested from the
Mortgage File to the Custodian when the need therefor by the Master Servicer or
such Servicer no longer exists, unless: (i) the Mortgage Loan has been
liquidated and the Liquid ation Proceeds relating to the Mortgage Loan have been
deposited in the related Collection Account; or (ii) the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer such Servicer has
delivered to the Cus todian a certificate of a Servicing Officer certifying as
to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated and that all amounts received or to be received in connection
with such liquidation which are required to be deposited into the related
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, the related Mortgage File shall be released by the Custodian to
the Master Servicer or related Servicer, as applicable.
C-7
The Custodian shall, at the expense of any Noteholder and upon such
Noteholder's request, provide a written report to such Noteholder of all
Mortgage Files released to the Master Servicer or related Servicer for servicing
purposes.
Section 2.5. AUDIT AND EXAMINATION OF MORTGAGE FILES. Upon reasonable
notice
to the Custodian, the Indenture Trustee, the Master Servicer, the Servicers, the
Depositor, the Issuer or any agent of any of them will be permitted, during
normal business hours, to examine the Mortgage Files, documents, records and
other papers in possession of or under the control of Custodian relating to any
or all of the related Mortgage Loans.
Section 2.6. COPIES OF MORTGAGE FILES. Upon the reasonable request of
the Indenture Trustee, the Master Servicer, the related Servicer, the Issuer or
the Depositor, the Custodian shall provide to such requesting party, copies of
the documents which constitute the Mortgage Files. The Indenture Trustee shall
pay all reasonable costs and expenses incurred by the Custodian in preparing
such copies, which shall be in accordance with the Custodian's then-current fee
schedule.
Section 2.7. SAFEKEEPING. The Custodian shall segregate the Mortgage
Files from all other mortgages and mortgage notes and similar records in its
possession, and agrees to hold the Mortgage Files on behalf of the Indenture
Trustee for the use and benefit of all present and future Noteholders and to
maintain accurate records pertaining to each Mortgage Note and Mortgage in the
Mortgage Files as will enable the Indenture Trustee to comply with the terms and
conditions of the Indenture, and at all times to maintain a current inventory
thereof and to conduct periodic physical inspections of the Mortgage Files held
by it under this Agreement in such a manner as shall enable the Indenture
Trustee to verify the accuracy of such inventory and record keeping. The
Custodian will promptly report to the Indenture Trustee any failure on its part
to hold the Mortgage Files as herein provided and promptly take appropriate
action to remedy any such failure.
Section 2.8. ADMINISTRATION; REPORTS. In general, the Custodian shall
attend to all nondiscretionary details in connection with maintaining custody of
the Mortgage Files on behalf of the Indenture Trustee, and to provide the
Indenture Trustee with notification of any change in status of any Mortgage File
to which the Custodian has knowledge. In addition, the Custodian shall assist
the other parties hereto, who are preparing routine reports to Noteholders, at
the request of any such party, or to regulatory bodies, to the extent necessi
xxxxx by the Custodian's custody of the Mortgage Files.
C-8
ARTICLE III
Concerning the Custodian
Section 3.1. CUSTODIAN A BAILEE AND AGENT OF THE INDENTURE TRUSTEE.
With respect to each Mortgage Note, Mortgage and other documents constituting
each Mortgage File which are delivered to the Custodian, the Custodian hereby
agrees to act as the agent and bailee of the Indenture Trustee, and to hold such
documents, in trust, for the exclusive use and benefit of all present and future
Noteholders and undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. The Custodian may not delegate any of
its duties hereunder without the prior written consent of the Indenture Trustee.
The Custodian shall segregate and maintain all documents constituting the
Custodian's Mortgage File received by it for the benefit of the Noteholders in
secure facilities in accordance with cus tomary standards for such custody. The
Mortgage Note and Assignment of Mortgage shall be maintained in secure
fire-resistant facilities. Except upon compliance with the provisions of Section
2.4 of this Agreement, no Mortgage Note, Mortgage or other document constituting
a part of a Mortgage File shall be delivered by the Custodian to the Issuer, the
Depositor, the Master Servicer or any Servicer or otherwise released from the
possession of the Custodian.
Section 3.2. INDEMNIFICATION. The parties hereto acknowledge that the
Indenture Trustee, the Issuer, the Depositor, the Master Servicer and the
Servicers shall not be liable for the acts of the Custodian hereunder. The
Custodian agrees to indemnify the Indenture Trustee, the Issuer, the Depositor,
the Master Servicer and the Servicers and any director, officer, employee or
agent of the Indenture Trustee, the Issuer, the Depositor, the Master Servicer
and the Servicers for, and to hold them harmless against, any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorney's fees, incurred by them arising out of, or in connection with, any
suit, claim or other action relating to the Custodian's negligent conduct or
willful misconduct in its performance under this Agreement. Such indemnification
shall survive the termination or discharge of this Agreement, and the
resignation or removal of the Custodian hereunder.
The Indenture Trustee agrees to indemnify and hold the Custodian and
its directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Agreement or
any action taken or not taken by it or them hereunder unless such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements were imposed on, incurred by or asserted against the
Custodian because of the breach by the Custodian of its obligations hereunder,
or because of the Custodian's negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees. The foregoing indemnification shall survive any termination
or assignment of this Agreement.
C-9
Section 3.3. CUSTODIAN MAY OWN NOTES. The Custodian in its individual
or any other capacity may become the owner or pledgee of Notes with the same
rights it would have if it were not Custodian.
Section 3.4. INDENTURE TRUSTEE TO PAY CUSTODIAN'S FEES AND EXPENSES.
The Indenture Trustee covenants and agrees to pay to the Custodian monthly on
each Payment Date, and the Custodian shall be entitled to, a fee of 1/12 of
0.0035% per annum multiplied by the aggregate Scheduled Principal Balance of the
Mortgage Loans and any REO Properties as of the second preceding Due Date (or,
in the case of the first Payment Date, as of the Cut-off Date) as compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Indenture Trustee will pay
or xxxx xxxxx the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
Section 3.5. CUSTODIAN MAY RESIGN; INDENTURE TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans by giving written notice thereof to the Issuer, the
Depositor, the Master Servicer, the Servicers and the Indenture Trustee. Upon
receiving such notice of resignation, the Indenture Trustee shall either: (1)
take custody of the Mortgage Files itself and give prompt notice thereof to the
Issuer, the Depositor, the Master Servicer, the Servicers and the Custodian or
(2) promptly appoint a successor Custodian by written instrument, in duplicate,
which instrument shall be delivered to the resigning Custodian and to the
successor Custodian. If the Indenture Trustee shall not have taken custody of
the Mortgage Files and no successor Custodian shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Xxxxxxxxx.
The Indenture Trustee may remove the Custodian at any time. In such
event, the Indenture Trustee shall appoint, or petition a court of competent
jurisdiction to appoint, a successor Custodian hereunder. Any successor
Custodian shall be a depository institution or a trust company subject to
supervision by federal or state authority and shall be able to satisfy the other
requirements contained in Section 3.7.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Indenture Trustee shall give prompt notice to the Issuer, the Depositor, the
Master Servicer and the Servicers of the appointment of any successor Custodian.
No successor Custodian shall be appointed by the Indenture Trustee without the
prior approval of the Issuer.
C-10
In the event of the removal or resignation of the Custodian, the
Custodian shall transfer all files to the successor Custodian within 60 days
after receipt of tender of notice of removal or resignation.
Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person into
which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, provided such Person shall be able to satisfy the requirements in
Section 3.7, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian hereby
represents that it is a depository institution or a trust company subject to
supervision by a federal or state authority, has a combined capital and surplus
of at least $10,000,000 and is qualified to do business in the jurisdiction in
which it will hold any Mortgage File.
Section 3.8. LIABILITY OF THE CUSTODIAN. In the absence of bad faith
on the part of the Custodian, the Custodian may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any request, instructions, certificate, opinion or other document furnished
to the Custodian, reasonably believed by the Custodian to be genuine and to have
been signed or presented by the proper party or parties and conforming to the
requirements of this Agreement; but in the case of any loan document or other
request, instruction, document or certificate which by any provision hereof is
specifically required to be furnished to the Custodian, the Custodian shall be
under a duty to examine the same in accordance with the requirements of this
Agreement.
Neither the Custodian nor any of its directors, officers, agents or
employees, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith in good faith and believed by it or
them to be within the purview of this Agreement, except for its or their breach
of its or their obligations hereunder, or by its or their own negligence, lack
of good faith or willful misconduct. In no event shall the Custodian or its
directors, officers, agents and employees be held liable for any special,
indirect or consequential damages resulting from any action taken or omitted to
be taken by it or them hereunder or in connection herewith in good faith and
reasonably believed by it or them to be within the purview of this Agreement,
even if advised of the possibility of such damages.
Section 3.9. INSURANCE. The Custodian shall, at its own expense,
maintain in full force and effect at all times during the existence of this
Agreement the following:
(a) fidelity insurance;
(b) theft of documents insurance; and
(c) errors and omissions insurance.
C-11
All such insurance shall be in amounts with standard coverage and subject to
deductibles as is customary for insurance typically maintained by depository
institutions or trust companies which act as custodians, which insurance may be
self-insurance. The minimum coverage under any such insurance shall be at least
equal to the corresponding amounts required by Xxxxxx Xxx in the Xxxxxx Xxx
Mortgage-Backed Securities Selling and Servicing Guide or by Freddie Mac in the
Xxxxxxx Xxx Xxxxxxx' & Servicers' Guide. The Custodian shall, upon written
request, provide to the Issuer, the Depositor or the Indenture Trustee a copy of
any policy or certificate of insurance required to be maintained by the
Custodian pursuant to this Agreement.
ARTICLE IV
Miscellaneous Provisions
Section 4.1. NOTICES. All notices, requests, consents and demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by first class mail, postage prepaid, or by express delivery service,
at the addresses shown on the signature page hereto, or such other address as
may hereafter be furnished to the other parties by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date delivered to or received at the premises of the addressee.
Section 4.2. AMENDMENTS. This Agreement may be amended from time to
time by the parties hereto, provided that any amendment be accompanied by a
letter from the Rating Agencies to the effect that the amendment will not result
in a downgrading or withdrawal of the ratings then assigned to the Notes.
Section 4.3. GOVERNING LAW. This Agreement shall be deemed a contract
made under the laws of the State of New York and shall be construed and enforced
in accordance with and governed by the laws of the State of New York.
Section 4.4. COUNTERPARTS. For purpose of facilitating the recordation
of this Agreement as herein provided and for other purposes, this Agreement may
be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 4.5. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
rights of the Holders thereof.
C-12
Section 4.6. NO RECOURSE TO OWNER TRUSTEE. It is expressly understood
and agreed by and between the parties hereto (i) that this Agreement is executed
and delivered by the Owner Trustee, not in its individual capacity but solely as
Owner Trustee under the Owner Trust Agreement in the exercise of the power and
authority conferred and vested in it as such Owner Trustee, (ii) each of the
representations, undertakings and agreements made herein by the Issuer are not
personal representations, undertakings and agreements of the Owner Trustee but
are binding only on the Issuer created pursuant to the Owner Trust Agreement,
(iii) nothing contained herein shall be construed as creating any liability on
the Owner Trustee, individually or personally, to perform any covenant of the
Issuer either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any person claiming by,
through or under any such party and (iv) under no circumstances shall the Owner
Trustee be personally liable for the payment of any indebtedness or expense of
the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant make or undertaken by the Issuer under this
Agreement.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
Address:
Norwest Center By:______________________________
Sixth & Marquette Name:
Minneapolis, Minnesota 55479 Title:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION,
as Custodian
Address:
000 Xxxx Xxxxxx Xxxx By:______________________________
Houston, Texas 77067 Name:
Title:
AMERIQUEST MORTGAGE COMPANY
Address: as Servicer
0000 Xxxx & Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000 By:______________________________
Name:
Title:
LONG BEACH MORTGAGE
COMPANY,
as Servicer
Address:
0000 Xxxx & Xxxxxxx Xxxx By:______________________________
Orange, California 92868 Name:
Title:
NATIONAL MORTGAGE
CORPORATION,
as Servicer
Address:
0000 Xxxx Xxxxxxx Xxxx By:______________________________
Englewood, Colorado 80111 Name:
Title:
WILSHIRE REIT TRUST SERIES 1998-1,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
Address:
c/o Wilmington Trust Company By:______________________________
Xxxxxx Square North Name:
0000 Xxxxx Xxxxxx Xxxxxx Xxxxx:
Xxxxxxxxxx, Xxxxxxxx 00000
WILSHIRE SERVICING
CORPORATION,
as Master Servicer
Address:
0000 Xxxxx Xxxx Xxxxxxx Xxxxxx By:______________________________
Portland, Oregon 97205 Name:
Title:
EXHIBIT ONE TO THE CUSTODIAL AGREEMENT
--------------------------------------
FORM OF CUSTODIAN INITIAL CERTIFICATION
September __, 1998
[Issuer]
[Indenture Trustee]
Re: Custodial Agreement, dated September __, 1998, among Wilshire REIT
Trust Series 1998-1, Long Beach Mortgage Company, Ameriquest
Mortgage Company, National Mortgage Corporation, Norwest Bank
Minnesota, National Association and Chase Bank of Texas, National
Association relating to Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Notes, Series 1998-11
----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2 of the above-referenced Custodial
Agreement, the undersigned, as Custodian, hereby certifies, subject to the
exceptions noted on the attached report, that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report as not being
covered by this certification), it has reviewed the Mortgage File and determined
that (i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.1(e)) required to be delivered to it pursuant
to the Custodial Agreement are in its possession, (ii) such documents have been
reviewed by it and appear regular on their face and relate to such Mortgage
Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii), (vi), (ix), (x), (xiii), (xvi), and (xvii) through (xx) of
the definition of "Mortgage Loan Schedule" in the Indenture accurately reflects
information set forth in the Mortgage File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Custodial Agreement. The Custodian makes no representations as
to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule,
1-2
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan, or (iii) whether any Mortgage File included any of the documents
specified in clause (e) of Section 2.1 of the Custodial Agreement.
Capitalized words and phrases used herein shall have the meanings
assigned to them in the above-captioned Custodial Agreement.
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By:________________________
Name:
Title:
EXHIBIT TWO TO THE CUSTODIAL AGREEMENT
--------------------------------------
FORM OF CUSTODIAN FINAL CERTIFICATION
[Date]
[Issuer]
[Indenture Trustee]
Re: Custodial Agreement, dated September __, 1998, among Wilshire REIT
Trust Series 1998-1, Long Beach Mortgage Company, Ameriquest
Mortgage Company, National Mortgage Corporation, Norwest Bank
Minnesota, National Association and Chase Bank of Texas, National
Association relating to Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Floating Rate Notes, Series 1998-11
----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or listed on the attachment hereto), it has received:
(i) the original Mortgage Note, endorsed in the following form:
"Pay to the order of Norwest Bank Minnesota, N.A., as Indenture Trustee for
the registered holders of the Notes, under the applicable agreement,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Indenture Trustee;
(ii) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the public
recording office retains the original or where the original has been lost;
and
(iii) an original recorded Assignment of the Mortgage to the
Indenture Trustee together with the original recorded Assignment or
Assignments of the Mortgage showing a complete chain of assignment from the
originator, or a certified copy of such Assignments in those instances
where the public recording retains the original or where original has been
lost; and
2-2
(iv) the original lender's title insurance policy.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Indenture Agreement. The Custodian makes no representations as
to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in the Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the meanings
assigned to them in the above-captioned Custodial Agreement.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:_____________________________
Name:
Title:
EXHIBIT THREE TO THE CUSTODIAL AGREEMENT
----------------------------------------
REQUEST FOR RELEASE
(for Indenture Trustee/Custodian)
Loan Information
----------------
Name of Mortgagor: _____________________________
Servicer
Loan No.: _____________________________
Indenture Trustee/Custodian
---------------------------
Name: _____________________________
Address: _____________________________
_____________________________
Indenture Trustee/Custodian
Mortgage File No.: _____________________________
Depositor
---------
Name: XXXXXXX XXXXXXXX MORTGAGE
SECURITIES VII, INC.
Address: _____________________________
_____________________________
Notes: Asset-Backed Floating Rate Notes, Series 1998-11.
3-2
The undersigned Servicer hereby acknowledges that it has received from
_______________________, as Indenture Trustee (or a Custodian on its behalf) for
the Holders of Salomon Brothers Mortgage Securities VII, Inc. Asset-Backed
Floating Rate Notes, Series 1998-11, 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 Servicing Agreement, dated as
of September 1, 1998, among the Indenture Trustee, the Issuer and the Servicer
(the "Agreement").
( ) Promissory Note dated _______________, 19__, in the original principal sum
of $__________, made by _____________________, payable to, or endorsed to
the order of, the Indenture 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 Indenture 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 Servicer hereby acknowledges and agrees as follows:
(1) The Servicer shall hold and retain possession of the Documents in
trust for the benefit of the Indenture Trustee, solely for the purposes
provided in the Agreement.
3-3
(2) The 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 Servicer assert or
seek to assert any claims or rights of setoff to or against the Documents
or any proceeds thereof.
(3) The Servicer shall return each and every Document previously
requested from the Mortgage File to the Indenture Trustee (or a Custodian
on its behalf) 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 Servicer shall at
all times be ear marked for the account of the Indenture Trustee, and the
Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Servicer's possession, custody or control.
Dated:
[Servicer]
By:_____________________________
Name:
Title:
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
XXXXXXX XXXXXXXX MORTGAGE SECURITIES VII, INC.
ASSET-BACKED FLOATING RATE NOTES, SERIES 1998-11
__________________________________________________ HEREBY CERTIFIES THAT HE/SHE
IS AN OFFICER OF THE 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 SERVICING
AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:____________ XXXXXXXX'S NAME:______________________
COUNTY:_________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLEC TION ACCOUNT PURSUANT TO
SECTION 3.10 OF THE SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
_________________________ DATED:____________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
[AVAILABLE UPON REQUEST]
SCHEDULE 2
MORTGAGE LOAN SCHEDULE FOR MORTGAGE LOANS FROM SERIES 1996-LB3
[AVAILABLE UPON REQUEST]