EXECUTION COPY
CHASE FUNDING, INC.,
Depositor
ADVANTA MORTGAGE CORP. USA,
Subservicer
CHASE MANHATTAN MORTGAGE CORPORATION
Master Servicer
and
CITIBANK, N.A.,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1999
--------------------------------------
CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 1999-2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS..............................................................................................1
SECTION 2.01. Conveyance of Mortgage Loans..........................................................46
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans...........................................49
SECTION 2.03. Representations, Warranties and Covenants of the Depositor............................51
SECTION 2.04. Representations and Warranties of the Subservicer.....................................61
SECTION 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases...........................................................................62
SECTION 2.06. Authentication and Delivery of Certificates...........................................63
SECTION 2.07. REMIC Election........................................................................63
SECTION 2.08. Covenants of the Subservicer..........................................................65
SECTION 2.09. Representations of the Master Servicer................................................65
SECTION 2.10. Conveyance of the Subsequent Mortgage Loans...........................................66
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS.......................................................................................68
SECTION 3.01. Subservicer to Service Mortgage Loans.................................................68
SECTION 3.02. Subservicing; Enforcement of the Obligations of Subservicer...........................70
SECTION 3.03. Rights of the Depositor, the Master Servicer and the Trustee in Respect
of the Subservicer....................................................................70
SECTION 3.04. Trustee to Act as Subservicer.........................................................70
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account; Distribution Account.............................................71
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts...................75
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans........................................................................76
SECTION 3.08. Permitted Withdrawals from the Collection Account, Certificate
Account and Distribution Account......................................................76
SECTION 3.09. [Reserved.]...........................................................................78
SECTION 3.10. Maintenance of Hazard Insurance.......................................................78
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements............................................................................80
- ii -
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Repurchase of Certain Mortgage Loans........................................81
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.......................................84
SECTION 3.14. Documents, Records and Funds in Possession of Subservicer to be
Held for the Trustee..................................................................85
SECTION 3.15. Servicing Compensation................................................................86
SECTION 3.16. Access to Certain Documentation.......................................................86
SECTION 3.17. Annual Statement as to Compliance.....................................................86
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements............................................................................87
ARTICLE IV
DISTRIBUTIONS;
ADVANCES BY THE SUBSERVICER.............................................................................87
SECTION 4.01. Advances..............................................................................87
SECTION 4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls...................................................................88
SECTION 4.03. Distributions on the Subsidiary REMIC.................................................89
SECTION 4.04. Distributions.........................................................................89
SECTION 4.05. Monthly Statements to Certificateholders..............................................95
SECTION 4.06. Pre-Funding Account...................................................................98
SECTION 4.07. Capitalized Interest Account.........................................................100
ARTICLE V
THE CERTIFICATES.......................................................................................101
SECTION 5.01. The Certificates.....................................................................101
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates.........................................................................102
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates....................................106
SECTION 5.04. Persons Deemed Owners................................................................106
SECTION 5.05. Access to List of Certificateholders' Names and Addresses............................107
SECTION 5.06. Book-Entry Certificates..............................................................107
SECTION 5.07. Notices to Depository................................................................108
SECTION 5.08. Definitive Certificates..............................................................108
SECTION 5.09. Maintenance of Office or Agency......................................................109
SECTION 5.10. Authenticating Agents................................................................109
SECTION 5.11. Appointment of Paying Agent..........................................................110
- iii -
ARTICLE VI
THE DEPOSITOR, THE SUBSERVICER AND
THE MASTER SERVICER....................................................................................110
SECTION 6.01. Respective Liabilities of the Depositor, the Subservicer and the Master
Servicer.............................................................................111
SECTION 6.02. Merger or Consolidation of the Depositor, the Subservicer or the
Master Servicer......................................................................111
SECTION 6.03. Limitation on Liability of the Depositor, the Master Servicer, the
Subservicer and Others...............................................................111
SECTION 6.04. Limitation on Resignation of Subservicer.............................................112
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.......................................112
SECTION 6.06. Compensation to the Master Servicer..................................................112
ARTICLE VII
DEFAULT; TERMINATION OF SUBSERVICER....................................................................113
SECTION 7.01. Events of Default....................................................................113
SECTION 7.02. Trustee to Act; Appointment of Successor.............................................115
SECTION 7.03. Notification to Certificateholders...................................................116
SECTION 8.01. Duties of Trustee....................................................................117
SECTION 8.02. Certain Matters Affecting the Trustee................................................118
SECTION 8.03. Trustee Not Liable for Mortgage Loans................................................119
SECTION 8.04. Trustee May Own Certificates.........................................................119
SECTION 8.05. Master Servicer to Pay Trustee's Fees and Expenses...................................120
SECTION 8.06. Eligibility Requirements for Trustee.................................................120
SECTION 8.07. Resignation and Removal of Trustee...................................................121
SECTION 8.08. Successor Trustee....................................................................122
SECTION 8.09. Merger or Consolidation of Trustee...................................................122
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee........................................122
SECTION 8.11. Tax Matters..........................................................................124
ARTICLE IX
TERMINATION............................................................................................126
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans.....................126
SECTION 9.02. Final Distribution on the Certificates...............................................127
SECTION 9.03. Additional Termination Requirements..................................................128
- iv -
ARTICLE X
MISCELLANEOUS PROVISIONS...............................................................................129
SECTION 10.01. Amendment............................................................................129
SECTION 10.02. Counterparts.........................................................................131
SECTION 10.03. Governing Law........................................................................131
SECTION 10.04. Intention of Parties.................................................................131
SECTION 10.05. Notices..............................................................................132
SECTION 10.06. Severability of Provisions...........................................................133
SECTION 10.07. Assignment...........................................................................133
SECTION 10.08. Limitation on Rights of Certificateholders...........................................133
SECTION 10.09. Inspection and Audit Rights..........................................................134
SECTION 10.10. Certificates Nonassessable and Fully Paid............................................134
EXHIBIT A FORM OF CERTIFICATES
EXHIBIT B [RESERVED]
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF CLASS R CERTIFICATE
EXHIBIT E [RESERVED]
EXHIBIT F MORTGAGE LOAN SCHEDULE
EXHIBIT G [RESERVED]
EXHIBIT H FORM OF TRUSTEE CERTIFICATION
EXHIBIT I FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT J FORM OF TRANSFEROR CERTIFICATE
EXHIBIT K FORM OF INVESTMENT LETTER
EXHIBIT L FORM OF RULE 144A LETTER
EXHIBIT M REQUEST FOR RELEASE
EXHIBIT N FORM OF SUBSEQUENT TRANSFER INSTRUMENT
EXHIBIT O FORM OF ADDITION NOTICE
- v -
POOLING AND SERVICING AGREEMENT, dated as of June 1, 1999,
among CHASE FUNDING, INC., a New York corporation, as depositor (the
"Depositor"), ADVANTA MORTGAGE CORP. USA, a Delaware corporation, as subservicer
(the "Subservicer"), CHASE MANHATTAN MORTGAGE CORPORATION, a New Jersey
corporation, as Master Servicer (the "Master Servicer") and CITIBANK, N.A., a
national banking association, as trustee (the "Trustee").
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund (other
than the Capitalized Interest Account and, prior to the Distribution Date in the
month immediately following the end of the Funding Period or any earlier
Subsequent Transfer Date on which the entire balance of the Pre-Funding Account
is applied to purchase Subsequent Mortgage Loans, the Pre-Funding Account) for
federal income tax purposes will consist of two REMICs. The Subsidiary REMIC
will consist of all of the assets constituting the Trust Fund (other than those
held by the Master REMIC) and will be evidenced by the Subsidiary REMIC Regular
Interests (which will be uncertificated and will represent the "regular
interests" in the Subsidiary REMIC) and the SR Interest as the single "residual
interest" in the Subsidiary REMIC. The Trustee will hold the Subsidiary REMIC
Regular Interests. The Master REMIC will consist of the Subsidiary REMIC Regular
Interests and will be evidenced by the Regular Certificates (which will
represent the "regular interests" in the Master REMIC) and the MR Interest as
the single "residual interest" in the Master REMIC. The Class R Certificates
initially will represent beneficial ownership of the SR Interest and the MR
Interest. The "latest possible maturity date" for federal income tax purposes of
all interests created hereby will be the Latest Possible Maturity Date.
In consideration of the mutual agreements herein contained,
the Depositor, the Subservicer, the Master Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: The Subservicer's normal
servicing practices, which will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service for their own account
mortgage loans of the same type as the Mortgages Loans in the jurisdictions in
which the related Mortgage Properties are located.
Accrual Period: With respect to the Group I Certificates
(other than the Class IA-1 Certificates) and any Distribution Date, the calendar
month immediately preceding such Distribution Date. With respect to the Group II
Certificates and the Class IA-1 Certificates and any Distribution Date, the
period commencing on the immediately preceding Distribution Date (or, in the
case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on the Group I Certificates
(other than the Class IA-1 Certificates) will be made on the basis of a 360-day
year consisting of twelve 30-day months, and all calculations of interest on the
Group II Certificates and the Class IA-1 Certificates will be made on the basis
of the actual number of days elapsed in the related Accrual Period and a 360 day
year.
Addition Notice: With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.10, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate Stated Principal Balance of such Subsequent Mortgage
Loans as of the Subsequent Cut-off Date. The Addition Notice shall be given to
the Master Servicer, the Trustee and the Paying Agent not later than three
Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form of Exhibit O.
Adjustment Date: As to each Group II Mortgage Loan, each date
on which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by
the Subservicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal (except with respect to the final Scheduled Payment on any
Balloon Loan) and interest (net of the Servicing Fees) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Determination Date (including monthly interest on the
Stated Principal Balance of a Balloon Loan remaining outstanding after the Due
Date with respect to the final Scheduled Payment for such Balloon Loan) and (B)
with respect to each REO Property that has not been liquidated, an amount equal
to the excess, if any, of (x) one month's interest (adjusted to the Net Mortgage
Rate) on the Stated Principal Balance of the related Mortgage Loan over (y) the
net monthly rental income (if any) from such REO Property deposited in the
Collection Account for such Distribution Date pursuant to Section 3.12, less the
aggregate amount of any such delinquent payments that the Subservicer has
determined would constitute a Non-Recoverable Advance were an advance to be made
with respect thereto.
Agreement: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Collection Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Date and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period.
- 2 -
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which, (i) with respect to the Group I
Certificates, the Group I Certificate Principal Balance after distributions of
principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Group I Mortgage Loans as of the end of the preceding Due Period,
and (ii) with respect to the Group II Certificates, the Group II Certificate
Principal Balance after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Group II Mortgage Loans as
of the end of the preceding Due Period.
Appraised Value: With respect to a Mortgage Loan the proceeds
of which were used to purchase the related Mortgage Property, the "Appraised
Value" of a Mortgaged Property is the lesser of (x) the appraised value based on
an appraisal made for the Seller by an independent fee appraiser at the time of
the origination of the related Mortgage Loan, and (y) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction where the related Mortgaged Property is located to
reflect of record the sale and assignment of the Mortgage Loan to the Trustee,
which assignment, notice of transfer or equivalent instrument may, if permitted
by law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.
Authenticating Agent: As defined in Section 5.10 hereof.
Balloon Loan: A Mortgage Loan having an original term to
stated maturity of approximately 15 years which provides for level monthly
payments of principal and interest based on a 30-year amortization schedule,
with a balloon payment of the remaining outstanding principal balance due on
such Mortgage Loan at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the States of Arizona,
California, Pennsylvania and Utah and in the City of New York, New York or the
city in which the Master Servicer or Subservicer is located are authorized or
obligated by law or executive order to be closed.
- 3 -
Capitalized Interest Account: The account established and
maintained pursuant to Section 4.07.
Capitalized Interest Amount: The amount to be paid by the
Depositor to the Trustee for deposit into the Capitalized Interest Account on
the Closing Date pursuant to Section 4.07, which amount is $1,026,266.71.
Certificate: Any one of the certificates of any Class executed
by the Depositor and authenticated by the Authenticating Agent in substantially
the forms attached hereto as exhibits A through D.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(c) in the
name of the Trustee for the benefit of the Certificateholders and designated
"Citibank, N.A., as trustee, in trust for registered holders of Chase Funding
Mortgage Loan Asset-Backed Certificates, Series 1999-2". Funds in the
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Group: Either of the Group I Certificates or the
Group II Certificates.
Certificate Owner: With respect to a Book-Entry Certificate,
the person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any Distribution Date, the Initial Certificate Principal Balance of such
Certificate less the sum of (i) all amounts distributed with respect to such
Certificate in reduction of the Certificate Principal Balance thereof on
previous Distribution Dates pursuant to Section 4.04, and (ii) any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to (i) Section 4.04(h) for the Group I Certificates and (ii)
Section 4.04(i) for the Group II Certificates.
Certificate Register: The register maintained pursuant to
Section 5.02 hereof.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co.),
as nominee for the Depository, in the case of any Class of Regular Certificates,
except that solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
- 4 -
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as
set forth in Section 5.01 hereof.
Class IA-1 Certificate: Any Certificate designated as a "Class
IA-1 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-1
Certificates.
Class IA-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IA-1
Pass-Through Rate on the Class IA-1 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IA-1 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IA-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IA-1 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IA-1 Certificates with respect to interest on such
prior Distribution Dates and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IA-1 Pass-Through Rate for the related
Accrual Period.
Class IA-1 Margin: 0.11% per annum.
Class IA-1 Pass-Through Rate: For the first Distribution Date
5.13% per annum. As of any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class IA-1 Margin and (ii) the Group I Net Rate.
Class IA-2 Certificate: Any Certificate designated as a "Class
IA-2 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IA-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-2
Certificates.
- 5 -
Class IA-2 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IA-2
Pass-Through Rate on the Class IA-2 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IA-2 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IA-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IA-2 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IA-2 Certificates with respect to interest on such
prior Distribution Dates and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IA-2 Pass-Through Rate for the related
Accrual Period.
Class IA-2 Pass-Through Rate: 6.860% per annum.
Class IA-3 Certificate: Any Certificate designated as a "Class
IA-3 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IA-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-3
Certificates.
Class IA-3 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IA-3
Pass-Through Rate on the Class IA-3 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IA-3 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IA-3 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IA-3 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IA-3 Certificates with respect to interest on such
prior Distribution Dates and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IA-3 Pass-Through Rate for the related
Accrual Period.
Class IA-3 Pass-Through Rate: 7.288% per annum.
- 6 -
Class IA-4 Certificate: Any Certificate designated as a "Class
IA-4 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IA-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-4
Certificates.
Class IA-4 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IA-4
Pass-Through Rate on the Class IA-4 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IA-4 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IA-4 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IA-4 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IA-4 Certificates with respect to interest on such
prior Distribution Date and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IA-4 Pass-Through Rate for the related
Accrual Period.
Class IA-4 Pass-Through Rate: The lesser of (i) 7.565% (or on
any Distribution Date after the Optional Termination Date 8.065%) and (ii) the
Group I Net Rate;.
Class IA-5 Certificate: Any Certificate designated as a "Class
IA-5 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IA-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-5
Certificates.
Class IA-5 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IA-5
Pass-Through Rate on the Class IA-5 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IA-5 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IA-5 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IA-5 Current
Interest with respect to prior Distribution Dates over (b) the
- 7 -
amount actually distributed to the Class IA-5 Certificates with respect to
interest on such prior Distribution Date and (ii) interest on such excess (to
the extent permitted by applicable law) at the Class IA-5 Pass-Through Rate for
the related Accrual Period.
Class IA-5 Pass-Through Rate: The lesser of (i) 7.333% and
(ii) the Group I Net Rate as of the related Due Date.
Class IA-5 Principal Distribution Amount: As of any
Distribution Date prior to the Distribution Date in July 2008, the principal to
be distributed to the Class IA-5 Certificates equal to the product of (i) a
fraction, the numerator of which is the Certificate Principal Balance of the
Class IA-5 Certificates immediately prior to such Distribution Date and the
denominator of which is the Group I Class A Certificate Principal Balance
immediately prior to such Distribution Date, (ii) the Group I Class A Principal
Distribution Amount for such Distribution Date and (iii) the Class IA-5 PDA
Factor for such Distribution Date. With respect to the Distribution Date in July
2008 and each Distribution Date thereafter until the Class IA-5 Certificate
Principal Balance has been reduced to zero, the Class IA-5 Principal
Distribution Amount will equal the Group I Class A Principal Distribution Amount
for such Distribution Date.
Class IA-5 PDA Factor: As of any Distribution Date set forth
below, the Percentage set forth across from such Distribution Date:
Distribution Date Occurring in Percentage
------------------------------ ----------
July 1999-June 2002.................................................. 0%
July 2002-June 2004.................................................. 45%
July 2004-June 2005.................................................. 80%
July 2005-June 2006.................................................. 100%
July 2006-June 2008 ................................................. 300%
Class IIA-1 Certificate: Any Certificate designated as a
"Class IIA-1 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IIA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIA-1
Certificates.
Class IIA-1 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class IIA-1 Certificates is based upon the Group II Available Funds Cap, the
excess of (i) the amount of interest the Class IIA-1 Certificates would
otherwise be entitled to receive on such Distribution Date had such rate been
calculated as the sum of One-Month LIBOR and the applicable Class IIA-1
Pass-Through Margin for such Distribution
- 8 -
Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the amount of
interest payable on the Class IIA-1 Certificates at the Group II Available Funds
Cap for such Distribution Date and (B) the Class IIA-1 Interest Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04(f)(ix), together with interest thereon at a rate equal to the sum of
One-Month LIBOR and the applicable Class IIA-1 Pass-Through Margin for such
Distribution Date.
Class IIA-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IIA-1
Pass-Through Rate on the Class IIA-1 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IIA-1 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IIA-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IIA-1 Current
Interest with respect to prior Distribution Dates (excluding any Class IIA-1
Interest Carryover Amount) over (b) the amount actually distributed to the Class
IIA-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IIA-1 Pass-Through Rate for the related Accrual Period.
Class IIA-1 Margin: As of any Distribution Date up to and
including the Optional Termination Date for the Group II Certificates, 0.25% per
annum and, as of any Distribution Date after such Optional Termination Date,
0.50% per annum.
Class IIA-1 Pass-Through Rate: For the first Distribution
Date, 5.27% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class IIA-1 Margin, (ii) the Group II Weighted Maximum
Rate Cap and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IB Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Group I
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IB Certificates.
Class IB Certificate: Any Certificate designated as a "Class
IB Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IB
Certificates.
- 9 -
Class IB Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IB Pass-Through
Rate on the Class IB Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IB Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IB Interest Carryforward Amount: As of any Distribution
Date, the sum of (i) the excess of (a) the Class IB Current Interest with
respect to prior Distribution Dates over (b) the amount actually distributed to
the Class IB Certificates with respect to interest on such prior Distribution
Dates and (ii) interest on such excess (to the extent permitted by applicable
law) at the Class IB Pass-Through Rate for the related Accrual Period.
Class IB Pass-Through Rate: The lesser of (i) 8.750% per annum
and (ii) the Group I Net Rate as of the related Due Date.
Class IB Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class IB Applied Realized Loss Amount over (ii) the
sum of all distributions in reduction of the Class IB Applied Realized Loss
Amount on all previous Distribution Dates.
Class IIB Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIB Certificates.
Class IIB Certificate: Any Certificate designated as a "Class
IIB Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IIB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIB
Certificates.
Class IIB Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IIB Pass-Through
Rate on the Class IIB Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIB Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
- 00 -
Xxxxx XXX Xxxxxxxx Xxxxxxxxxxxx Xxxxxx: As of any Distribution
Date, the sum of (i) the excess of (a) the Class IIB Current Interest with
respect to prior Distribution Dates (excluding any Class IIB Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIB Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIB
Pass-Through Rate for the related Accrual Period.
Class IIB Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class IIB Certificates is based upon the Group II Available Funds Cap, the
excess of (i) the amount of interest the Class IIB Certificates would otherwise
be entitled to receive on such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class IIB Pass-Through Margin
for such Distribution Date, up to the Group II Weighted Maximum Rate Cap, over
(ii) the amount of interest payable on the Class IIB Certificates at the Group
II Available Funds Cap for such Distribution Date and (B) the Class IIB Interest
Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04(f)(ix), together with interest thereon at a rate equal
to the sum of One-Month LIBOR and the applicable Class IIB Pass-Through Margin
for such Distribution Date.
Class IIB Margin: For any Distribution Date up to and
including the Optional Termination Date for the Group II Certificates, 2.65% per
annum and, as of any Distribution Date after such Optional Termination Date,
3.975% per annum.
Class IIB Pass-Through Rate: For the first Distribution Date,
7.67% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class IIB Margin, (ii) the Group II Weighted Maximum
Rate Cap and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IIB Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class IIB Applied Realized Loss Amount over (ii) the
sum of all distributions in reduction of the Class IIB Applied Realized Loss
Amounts on all previous Distribution Dates.
Class IM-1 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect to
the Group I Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class IM-1 Certificates.
Class IM-1 Certificate: Any Certificate designated as a "Class
IM-1 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-1
Certificates.
- 11 -
Class IM-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IM-1
Pass-Through Rate on the Class IM-1 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IM-1 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IM-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IM-1 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IM-1 Certificates with respect to interest on such
prior Distribution Dates and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IM-1 Pass-Through Rate for the related
Accrual Period.
Class IM-1 Pass-Through Rate: The lesser of (i) 7.573% per
annum and (ii) the Group I Net Rate, as of the related Due Date.
Class IM-1 Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class IM Applied Realized Loss Amount over (ii) the
sum of all distributions in reduction of the Class IM-1 Applied Realized Loss
Amount on all previous Distribution Dates.
Class IM-2 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect to
the Group I Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class IM-2 Certificates.
Class IM-2 Certificate: Any Certificate designated as a "Class
IM-2 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-2
Certificates.
Class IM-2 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IM-2
Pass-Through Rate on the Class IM-2 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IM-2 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be
- 12 -
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IM-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IM-2 Current
Interest with respect to prior Distribution Dates over (b) the amount actually
distributed to the Class IM-2 Certificates with respect to interest on such
prior Distribution Dates and (ii) interest on such excess (to the extent
permitted by applicable law) at the Class IM-2 Pass- Through Rate for the
related Accrual Period.
Class IM-2 Pass-Through Rate: The lesser of (i) 7.869% per
annum and (ii) the Group I Net Rate, as of the related Due Date.
Class IM-2 Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class IM-2 Applied Realized Loss Amount over (ii)
the sum of all distributions in reduction of the Class IM-2 Applied Realized
Loss Amount on all previous Distribution Dates.
Class IIM-1 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect to
the Group II Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class IIM-1 Certificates.
Class IIM-1 Certificate: Any Certificate designated as a
"Class IIM-1 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IIM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-1
Certificates.
Class IIM-1 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IIM-1
Pass-Through Rate on the Class IIM-1 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IIM-1 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IIM-1 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IIM-1 Current
Interest with respect to prior Distribution Dates (excluding any Class IIM-1
Interest Carryover Amount) over (b) the amount actually distributed to the Class
IIM-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such
- 13 -
excess (to the extent permitted by applicable law) at the Class IIM-1
Pass-Through Rate for the related Accrual Period.
Class IIM-1 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class IIM-1 Certificates is based upon the Group II Available Funds Cap, the
excess of (i) the amount of interest the Class IIM-1 Certificates would
otherwise be entitled to receive on such Distribution Date had such rate been
calculated as the sum of One-Month LIBOR and the applicable Class IIM-1
Pass-Through Margin for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, over (ii) the amount of interest payable on the Class IIM-1
Certificates at the Group II Available Funds Cap for such Distribution Date and
(B) the Class IIM-1 Interest Carryover Amount for all previous Distribution
Dates not previously paid pursuant to Section 4.04(f)(ix), together with
interest thereon at a rate equal to the sum of One-Month LIBOR and the
applicable Class IIM-1 Pass-Through Margin for such Distribution Date.
Class IIM-1 Margin: As of any Distribution Date up to and
including the Optional Termination Date for the Group II Certificates, 0.46% per
annum and, as of any Distribution Date after such Optional Termination Date,
0.69% per annum.
Class IIM-1 Pass-Through Rate: For the first Distribution
Date, 5.48% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class IIM-1 Margin, (ii) the Group II Weighted Maximum
Rate Cap and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IIM-1 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class IIM-1 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class IIM-1
Applied Realized Loss Amounts on all previous Distribution Dates.
Class IIM-2 Applied Realized Loss Amount: As of any
Distribution Date, the sum of all Applied Realized Loss Amounts with respect to
the Group II Mortgage Loans which have been applied to the reduction of the
Certificate Principal Balance of the Class IIM-2 Certificates.
Class IIM-2 Certificate: Any Certificate designated as a
"Class IIM-2 Certificate" on the face thereof, in the form of Exhibit A hereto,
representing the right to distributions as set forth herein.
Class IIM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-2
Certificates.
Class IIM-2 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class IIM-2
Pass-Through Rate on the Class IIM-2 Certificate Principal Balance as of the
first day of such Accrual Period (after giving effect to all distributions of
- 14 -
principal made or deemed to be made as of such first day) plus the interest
portion of any previous distributions on such Class that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class IIM-2 Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class IIM-2 Interest Carryforward Amount: As of any
Distribution Date, the sum of (i) the excess of (a) the Class IIM-2 Current
Interest with respect to prior Distribution Dates (excluding any Class IIM-2
Interest Carryover Amount) over (b) the amount actually distributed to the Class
IIM-2 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IIM-2 Pass-Through Rate for the related Accrual Period.
Class IIM-2 Interest Carryover Amount: As of any Distribution
Date, the sum of (A) if on such Distribution Date the Pass-Through Rate for the
Class IIM-2 Certificates is based upon the Group II Available Funds Cap, the
excess of (i) the amount of interest the Class IIM-2 Certificates would
otherwise be entitled to receive on such Distribution Date had such rate been
calculated as the sum of One-Month LIBOR and the applicable Class IIM-2
Pass-Through Margin for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, over (ii) the amount of interest payable on the Class IIM-2
Certificates at the Group II Available Funds Cap for such Distribution Date and
(B) the Class IIM-2 Interest Carryover Amount for all previous Distribution
Dates not previously paid pursuant to Section 4.04(f)(ix), together with
interest thereon at a rate equal to the sum of One-Month LIBOR and the
applicable Class IIM-2 Pass-Through Margin for such Distribution Date.
Class IIM-2 Margin: As of any Distribution Date up to and
including the Optional Termination Date for the Group II Certificates, 0.90% per
annum and, as of any Distribution Date after such Optional Termination Date,
1.35% per annum.
Class IIM-2 Pass-Through Rate: For the first Distribution
Date, 5.92% per annum. As of any Distribution Date thereafter, the least of (i)
One-Month LIBOR plus the Class IIM-2 Margin, (ii) the Group II Weighted Maximum
Rate Cap and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IIM-2 Unpaid Realized Loss Amount: As of any
Distribution Date, the excess of (i) the Class IIM-2 Applied Realized Loss
Amount over (ii) the sum of all distributions in reduction of the Class IIM-2
Applied Realized Loss Amounts on all previous Distribution Dates.
Class R Certificate: Any one of the Class R Certificates
executed by the Depositor and authenticated by the Authenticating Agent in
substantially the form set forth in Exhibit D.
- 15 -
Closing Date: June 18, 1999.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Account: The separate Eligible Account created and
initially maintained by the Subservicer pursuant to Section 3.05(b) in the name
of the Trustee for the benefit of the Certificateholders and designated
"Citibank, N.A., as trustee, in trust for registered holders of Chase Funding
Mortgage Loan Asset-Backed Certificates, Series 1999-2". Funds in the Collection
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Compensating Interest: With respect to any Mortgage Loan, an
amount equal to the amount set forth in Section 4.02 hereof, to be applied to
the interest portion of a Prepayment Interest Shortfall on such Mortgage Loan
pursuant to Section 4.02 hereof.
Corporate Trust Office: The designated office of the Trustee
in the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
Corresponding Classes: With respect to Subsidiary REMIC
Interest I, the Group I Certificates. With respect to Subsidiary REMIC Interest
II, the Group II Certificates.
Current Interest: Any of the Class IA-1 Current Interest, the
Class IA-2 Current Interest, the Class IA-3 Current Interest, the Class IA-4
Current Interest, the Class IA-5 Current Interest, the Class IIA-1 Current
Interest, the Class IM-1 Current Interest, the Class IIM-1 Current Interest, the
Class IM-2 Current Interest, the Class IIM-2 Current Interest, the Class IB
Current Interest or the Class IIB Current Interest.
Custodian: The custodian for the Mortgage Files appointed by
the Trustee. The initial Custodian shall be Bank One Trust Company, N.A.
Cut-off Date: With respect to each Initial Mortgage Loan, June
1, 1999.
Cut-off Date Principal Balance: As to any Initial Mortgage
Loan, the unpaid principal balance thereof as of the close of business on the
calendar day immediately preceding the Cut-off Date after application of all
payments of principal due on or prior to the Cut-off Date, whether or not
received, and all Principal Prepayments received prior to the Cut-off Date, but
without giving effect to any installments of principal received in respect of
Due Dates on and after the Cut-off Date.
Definitive Certificates: As defined in Section 5.06.
- 16 -
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Principal Balance of this
Certificate".
Depositor: Chase Funding, Inc., a New York corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. 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.
Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository.
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 any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Master Servicer pursuant to Section 3.05 in the name of
the Trustee for the benefit of the Certificateholders and designated "Citibank,
N.A., as trustee, in trust for registered holders of Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 1999-2". Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
- 17 -
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a Business
Day, the next succeeding Business Day, commencing in July 1999.
Due Date: With respect to any Distribution Date and any
Mortgage Loan, the day during the related Due Period on which a Scheduled
Payment is due.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, beginning on the Cut-off Date) and ending on the first day of
the month in which such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a
depository institution the long-term unsecured debt obligations of which are
rated by each Rating Agency in one of its two highest rating categories, or (ii)
maintained with the corporate trust department of a bank which has a rating of
at least Baa3 or P-3 by Xxxxx'x, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing in a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (v) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificate: Each of the Class IM-1, Class
IM-2, Class IB, Class IIM-1, Class IIM-2, Class IIB and Class R Certificates.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Subservicer)
up to the Due Date in the month in which such Liquidation Proceeds are required
to be distributed on the Stated Principal Balance of such Liquidated Loan
outstanding during each Due Period as to which such interest was not paid or
advanced.
- 18 -
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Funding Period: The period beginning on the Closing Date and
ending on the earlier of (a) the date on which the amount on deposit in the
Pre-Funding Account is reduced to zero or (b) 2:00 p.m., New York City time, on
August 18, 1999.
Gross Margin: The percentage set forth in the related Mortgage
Note for each of the Mortgage Loans in Loan Group II which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each of the Group
II Mortgage Loans.
Group I Certificate Principal Balance: The sum of the Class
IA-1 Certificate Principal Balance, the Class IA-2 Certificate Principal
Balance, the Class IA-3 Certificate Principal Balance, the Class IA-4
Certificate Principal Balance, the Class IA-5 Certificate Principal Balance, the
Class IM-1 Certificate Principal Balance, the Class IM-2 Certificate Principal
Balance and the Class IB Certificate Principal Balance.
Group I Certificates: Any of the Class IA-1, Class IA-2, Class
IA-3, Class IA-4, Class IA-5, Class IM-1, Class IM-2 or Class IB Certificates.
Group I Class A Certificate Principal Balance: The sum of the
Class IA-1 Certificate Principal Balance, the Class IA-2 Certificate Principal
Balance, the Class IA-3 Certificate Principal Balance, the Class IA-4
Certificate Principal Balance and the Class IA-5 Certificate Principal Balance.
Group I Class A Certificates: Any of the Class IA-1, Class
IA-2, Class IA-3, Class IA-4 or Class IA-5 Certificates.
Group I Class A Principal Distribution Amount: With respect to
any Distribution Date (i) prior to the Group I Stepdown Date or any Distribution
Date on which a Group I Trigger Event exists, 100% of the Group I Principal
Distribution Amount for such Distribution Date and (ii) on or after the Group I
Stepdown Date where a Group I Trigger Event does not exist, the excess of (A)
the Group I Class A Certificate Principal Balance immediately prior to such
Distribution Date over (B) the lesser of (I) 75.50% of the Stated Principal
Balance of the Group I Mortgage Loans as of the end of the
- 19 -
immediately preceding Due Period and (II) the Stated Principal Balance of the
Group I Mortgage Loans as of the end of the immediately preceding Due Period
less $1,000,000.
Group I Class B Principal Distribution Amount: With respect to
any Distribution Date on or after the Group I Stepdown Date and as long as a
Group I Trigger Event does not exist, the excess of (i) the sum of (A) the Group
I Class A Certificate Principal Balance (after taking into account distribution
of the Group I Class A Principal Distribution Amount on such Distribution Date),
(B) the Class IM-1 Certificate Principal Balance (after taking into account
distribution of the Group I Class IM-1 Distribution Amount on such Distribution
Date), (C) the Class IM-2 Certificate Principal Balance (after taking into
account distribution of the Group I Class IM-2 Principal Distribution Amount for
such Distribution Date), and (D) the Class IB Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 97.50%
of the Stated Principal Balance of the Group I Mortgage Loans as of the end of
the preceding Due Period and (B) the Stated Principal Balances of the Group I
Mortgage Loans as of the end of the preceding Due Period less $1,000,000,
provided, however, that after the Group I Class A Certificate Principal Balance,
the Class IM-1 Certificate Principal Balance and the Class IM-2 Certificate
Principal Balance has been reduced to zero, the Group I Class B Principal
Distribution Amount for such Distribution Date will equal 100% of the Group I
Principal Distribution Amount for such Distribution Date remaining after any
distributions on such Class A, Class M-1 and Class M-2 Certificates.
Group I Class IM-1 Principal Distribution Amount: With respect
to any Distribution Date on or after the Group I Stepdown Date, 100% of the
Group I Principal Distribution Amount for such Distribution Date if the Group I
Class A Certificate Principal Balance has been reduced to zero and a Group I
Trigger Event exists, or, if any of the Group I Class A Certificates are still
Outstanding and as long as a Group I Trigger Event does not exist, the excess of
(i) the sum of (A) the Group I Class A Certificate Principal Balance (after
taking into account distributions of the Group I Class A Principal Distribution
Amount on such Distribution Date) and (B) the Class IM-1 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (A)
84.50% of the Stated Principal Balances of the Group I Mortgage Loans as of the
end of the preceding Due Period and (B) the Stated Principal Balances for the
Group I Mortgage Loans as of the end of the preceding Due Period less
$1,000,000. Notwithstanding the foregoing, on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Group
I Class A Certificates has been reduced to zero, the Group I Class IM-1
Principal Distribution Amount will equal the lesser of (A) the outstanding
Certificate Principal Balance of the Class IM-1 Certificates and (B) 100% of the
Group I Principal Distribution Amount remaining after any distributions on such
Class A Certificates.
Group I Class IM-2 Principal Distribution Amount: With respect
to any Distribution Date on or after the Group I Stepdown Date, 100% of the
Group I Principal Distribution Amount for such Distribution Date if the Group I
Class A Certificate Principal Balance and the Class IM-1 Certificate Principal
Balance have been reduced to zero and a Group I Trigger Event exists, or, if any
- 20 -
of the Group I Class A or Class IM-1 Certificates are still Outstanding and as
long as a Group I Trigger Event does not exist, the excess of (i) the sum of (A)
the Group I Class A Certificate Principal Balance (after taking into account
distributions of the Group I Class A Principal Distribution Amount on such
Distribution Date), (B) the Class IM-1 Certificate Principal Balance (after
taking into account distributions of the Group I Class IM-1 Principal
Distribution Amount on such Distribution Date) and (C) the Class IM-2
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 92.00% of the Stated Principal Balances of the Group I
Mortgage Loans as of the end of the preceding Due Period and (B) the Stated
Principal Balances for the Group I Mortgage Loans as of the end of the preceding
Due Period less $1,000,000. Notwithstanding the foregoing, on any Distribution
Date prior to the Stepdown Date on which the Certificate Principal Balance of
each Class of Group I Class A Certificates and the Class IM-1 Certificates has
been reduced to zero, the Group I Class IM-2 Principal Distribution Amount will
equal the lesser of (A) the outstanding Certificate Principal Balance of the
Class IM-2 Certificates and (B) 100% of the Group I Principal Distribution
Amount remaining after any distributions on such Class A and Class M-1
Certificates.
Group I Extra Principal Distribution Amount: With respect to
any Distribution Date, an amount equal to (i) prior to the Group I Stepdown
Date, the excess of (A) the sum of (I) the Group I Certificate Principal Balance
and (II) $2,500,000 over (B) the Stated Principal Balance of the Group I
Mortgage Loans as of the end of the preceding Due Period and (ii) on and after
the Group I Stepdown Date, the excess of (A) the sum of (I) the Group I
Certificate Principal Balance and (II) the greater of (x) 2.50% of the Stated
Principal Balance of the Group I Mortgage Loans as of the end of the preceding
Due Period and (y) $1,000,000 over (B) the Stated Principal Balance of the Group
I Mortgage Loans; provided, however, that if on any Distribution Date, a Group I
Trigger Event is in effect, the Group I Extra Principal Distribution Amount will
not be reduced to the percentage of the then-current Stated Principal Balance of
the Group I Mortgage Loans (and will remain fixed at such percentage of the
then-current Stated Principal Balance of the Group I Mortgage Loans as of the
Due Date immediately prior to the occurrence of the Group I Trigger Event) until
the next Distribution Date on which a Group I Trigger Event is not in effect.
Group I Interest Funds: With respect to Group I Mortgage Loans
and any Servicer Advance Date, the sum, without duplication, of (i) all
scheduled interest due during the related Due Period and received before the
related Servicer Remittance Date or Advanced on or before the related Servicer
Remittance Date less the sum of (a) the Servicing Fee with respect to the Group
I Mortgage Loans and (b) the Master Servicer Fee with respect to the Group I
Mortgage Loans, (ii) all Advances relating to interest with respect to the Group
I Mortgage Loans, (iii) all Compensating Interest with respect to the Group I
Mortgage Loans, (iv) Liquidation Proceeds with respect to the Group I Mortgage
Loans (to the extent such Liquidation Proceeds relate to interest) less all
Non-Recoverable Advances with respect to the Group I Mortgage Loans relating to
interest reimbursed during the related Due Period, and (v) any amount withdrawn
from the Capitalized Interest Account allocable to Loan Group I pursuant to
Section 4.07 hereof.
- 21 -
Group I Mortgage Loans: The pool of Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof or pursuant to a Subsequent Transfer Instrument.
Group I Net Rate: With respect to any Distribution Date, the
weighted average Net Mortgage Rate for Mortgage Loans in Loan Group I as of the
related Due Date.
Group I Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group I Principal Funds for such
Distribution Date and (ii) any Group I Extra Principal Distribution Amount for
such Distribution Date.
Group I Principal Funds: With respect to the Group I Mortgage
Loans and any Distribution Date, the sum, without duplication, of (i) the
scheduled principal due during the related Due Period and received before the
related Servicer Remittance Date or Advanced on or before the related Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was repurchased by
the Depositor, (iv) the amount, if any, by which the aggregate unpaid principal
balance of any Replacement Mortgage Loan is less than the aggregate unpaid
principal balance of the related Deleted Mortgage Loans delivered by the
Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c), (v) all Liquidation Proceeds collected during the related Due
Period (to the extent such Liquidation Proceeds related to principal), and (vi)
with respect to the Distribution Date in the month immediately following the end
of the Funding Period, any amounts in the Pre-Funding Account allocable to Loan
Group I after giving effect to the purchase of any Subsequent Mortgage Loans,
less all Non-Recoverable Advances relating to principal reimbursed in respect of
Group I Mortgage Loans and all NonRecoverable Servicing Advances reimbursed
during the related Due Period.
Group I Required Percentage: As of any Distribution Date
following a Group I Stepdown Date, the quotient of (i) the excess of (A) the
Stated Principal Balances of the Group I Mortgage Loans over (B) the Certificate
Principal Balance of the most senior Class of Group I Certificates outstanding
as of the preceding Servicer Advance Date and (ii) the Stated Principal Balance
of the Group I Mortgage Loans.
Group I Stepdown Date: The later to occur of (i) the
Distribution Date in July 2002 or (ii) the first Distribution Date on which (A)
the Group I Class A Certificate Principal Balance is less than or equal to (B)
75.50% of the Stated Principal Balances of the Group I Mortgage Loans plus the
Pre-Funded Amount allocable to Loan Group I, in each case, as of the end of the
preceding Due Period.
Group I Subordinated Certificates: The Class IM-1, Class IM-2
and Class IB Certificates.
- 22 -
Group I Trigger Event: Any Distribution Date on or after the
occurrence of either of the following:
(1) With respect to the Group I Certificates after a Group I
Stepdown Date, the Distribution Date on which (A) the product
of two times the quotient of (i) the aggregate Stated
Principal Balance of all Group I Mortgage Loans which are 60
or more days delinquent (including, for the purposes of this
calculation, Group I Mortgage Loans in foreclosure and REO
Properties) and (ii) the Stated Principal Balance of the Group
I Mortgage Loans plus the Pre-Funded Amount allocable to Loan
Group I, in each case, as of the preceding Servicer Advance
Date equals or exceeds (b) the Group I Required Percentage.
(2) With respect to the Group I Certificates after a Group I
Stepdown Date, the Distribution Date on which cumulative
Realized Losses as a percentage of the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the
Cut-off Date plus the Original Pre-Funded Amount allocable to
Loan Group I as of such Distribution Date equals or exceeds
the following percentages:
Distribution Date Percentage
----------------- ----------
July 2002-June 2003............................................... 2.40%
July 2003-June 2004 .............................................. 2.90%
July 2004-June 2005............................................... 3.30%
July 2005-June 2006............................................... 3.50%
July 2006 and thereafter.......................................... 3.60%
Group II Available Funds Cap: As of any Distribution Date with
respect to the Group II Certificates, a per annum rate equal to 12 times the
quotient of (i) the sum of (A) the total scheduled interest on the Mortgage
Loans in Loan Group II based on the Net Mortgage Rates on the related Due Date
and (B)(I) with respect to the Distribution Date in July 1999, 50% of the amount
of funds then on deposit in the Capitalized Interest Account allocable to Loan
Group II immediately prior to such Distribution Date, (II) with respect to the
Distribution Date in August 1999, 100% of the amount of funds then on deposit in
the Capitalized Interest Account allocable to Loan Group II immediately prior to
such Distribution Date and (III) with respect to the Distribution Date in
September 1999 and thereafter, 0% of the amount in the Capitalized Interest
Account allocable to Loan Group II immediately prior to such Distribution Date
and (ii) the Group II Certificate Principal Balance as of the first day of the
applicable Accrual Period.
Group II Certificates: Any of the Class IIA-1, Class IIM-1,
Class IIM-2 and Class IIB Certificates.
- 23 -
Group II Certificate Principal Balance: The sum of the Class
IIA-1 Certificate Principal Balance, Class IIM-1 Certificate Principal Balance,
Class IIM-2 Certificate Principal Balance and the Class IIB Certificate
Principal Balance.
Group II Class A Certificate Principal Balance: The Class
IIA-1 Certificate Principal Balance.
Group II Class A Certificates: The Class IIA-1 Certificates.
Group II Class A Principal Distribution Amount: With respect
to any Distribution Date (i) prior to the Group II Stepdown Date or any
Distribution Date on which a Group II Trigger Event exists, 100% of the Group II
Principal Distribution Amount for such Distribution Date and (ii) on or after
the Group II Stepdown Date where a Group II Trigger Event does not exist, the
excess of (A) the Group II Class A Certificate Principal Balance immediately
prior to such Distribution Date over (B) the lesser of (I) 67.00% (or 65.50%, if
a Stepup Trigger Event has occurred) of the Stated Principal Balance of the
Group II Mortgage Loans as of the end of the immediately preceding Due Period
and (II) the Stated Principal Balance of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period less $1,900,000.
Group II Class B Principal Distribution Amount: With respect
to any Distribution Date on or after the Group II Stepdown Date and as long as a
Group II Trigger Event does not exist, the excess of (i) the sum of (A) the
Group II Class A Certificate Principal Balance (after taking into account
distribution of the Group II Class A Principal Distribution Amount on such
Distribution Date), (B) the Class IIM-1 Certificate Principal Balance after
taking into account distribution of the Group II Class IIM-1 Distribution Amount
on such Distribution Date), (C) the Class IIM-2 Certificate Principal Balance
(after taking into account distribution of the Group II Class IIM-2 Principal
Distribution Amount for such Distribution Date), and (D) the Class IIB
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 96.50% (or 95.00%, if a Stepup Trigger Event has
occurred) of the Stated Principal Balance of the Group II Mortgage Loans as of
the end of the preceding Due Period and (B) the Stated Principal Balances of the
Group II Mortgage Loans as of the end of the preceding Due Period less
$1,900,000, provided, however, that after the Group II Class A Certificate
Principal Balance, the Class IIM-1 Certificate Principal Balance and the Class
IIM-2 Certificate Principal Balance has been reduced to zero, the Group II Class
B Principal Distribution Amount for such Distribution Date will equal 100% of
the Group II Principal Distribution Amount for such Distribution Date remaining
after any distributions on such Class A, Class M-1 and Class M-2 Certificates.
Group II Class IIM-1 Principal Distribution Amount: With
respect to any Distribution Date on or after the Group II Stepdown Date, 100% of
the Group II Principal Distribution Amount for such Distribution Date if the
Group II Class A Certificate Principal Balance has been reduced to zero and a
Group II Trigger Event exists, or, if any of the Group II Class A Certificates
are still outstanding
- 24 -
and as long as a Group II Trigger Event does not exist, the excess of (i) the
sum of (A) the Group II Class A Certificate Principal Balance (after taking into
account distributions of the Group II Class A Principal Distribution Amount on
such Distribution Date) and (B) the Class IIM-1 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 79.00%
(or 77.50%, if a Stepup Trigger Event has occurred) of the Stated Principal
Balances of the Group II Mortgage Loans as of the end of the preceding Due
Period and (B) the Stated Principal Balances for the Group II Mortgage Loans as
of the end of the preceding Due Period less $1,900,000. Notwithstanding the
foregoing, on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Group II Class A Certificates has
been reduced to zero, the Group II Class IIM-1 Principal Distribution Amount
will equal the lesser of (A) the outstanding Certificate Principal Balance of
the Class IIM-1 Certificates and (B) 100% of the Group II Principal Distribution
Amount remaining after any distributions on such Class A Certificates.
Group II Class IIM-2 Principal Distribution Amount: With
respect to any Distribution Date on or after the Group II Stepdown Date, 100% of
the Group II Principal Distribution Amount for such Distribution Date if the
Group II Class A Certificate Principal Balance and the Class IIM-1 Certificate
Principal Balance have been reduced to zero and a Group II Trigger Event exists,
or, if any of the Group II Class A or Class IIM-1 Certificates are still
outstanding and as long as a Group II Trigger Event does not exist, the excess
of (i) the sum of (A) the Group II Class A Certificate Principal Balance (after
taking into account distributions of the Group II Class A Principal Distribution
Amount on such Distribution Date), (B) the Class IIM-1 Certificate Principal
Balance (after taking into account distributions of the Group II Class IIM-1
Principal Distribution Amount on such Distribution Date) and (C) the Class IIM-2
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 88.50% (or, 87.00%, if a Stepup Trigger Event has
occurred) of the Stated Principal Balances of the Group II Mortgage Loans as of
the end of the preceding Due Period and (B) the Stated Principal Balances of the
Group II Mortgage Loans as of the end of the preceding Due Period less
$1,900,000. Notwithstanding the foregoing, on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Group
II Class A Certificates and the Class IIM-1 Certificates has been reduced to
zero, the Group II Class IIM-2 Principal Distribution Amount will equal the
lesser of (A) the outstanding Certificate Principal Balance of the Class IIM-2
Certificates and (B) 100% of the Group II Principal Distribution Amount
remaining after any distributions on such Class A and Class M-1 Certificates.
Group II Extra Principal Distribution: With respect to any
Distribution Date, an amount equal to (i) prior to the Group II Stepdown Date,
the excess of (A) the sum of (I) the Group II Certificate Principal Balance and
(II) $6,650,000 (or, $9,500,000, if a Stepup Trigger Event has occurred) over
(B) the Stated Principal Balance of the Group II Mortgage Loans plus the
Pre-Funded Amount allocable to Loan Group II, in each case, as of the end of the
preceding Due Period and (ii) on and after the Group II Stepdown Date, the
excess of (A) the sum of (I) the Group II Certificate Principal Balance and (II)
the greater of (x) 3.50% (or 5.00%, if a Stepup Trigger Event has occurred) of
the Stated Principal Balance of the Group II Mortgage Loans as of the end of the
preceding Due
- 25 -
Period and (y) $1,900,000 over (B) the Stated Principal Balance of the Group II
Mortgage Loans; provided, however, that if on any Distribution Date, a Group II
Trigger Event is in effect, the Group II Extra Principal Distribution Amount
will not be reduced to the percentage of the then-current Stated Principal
Balance of the Group II Mortgage Loans (and will remain fixed at such percentage
of the then-current Stated Principal Balance of the Group II Mortgage Loans as
of the Due Date immediately prior to the occurrence of the Group II Trigger
Event) until the next Distribution Date on which a Group II Trigger Event is not
in effect.
Group II Interest Funds: With respect to Group II Mortgage
Loans and any Servicer Advance Date, the sum, without duplication, of (i) all
scheduled interest due during the related Due Period and received before the
related Servicer Remittance Date or Advanced on or before the related Servicer
Remittance Date less the sum of (a) the Servicing Fee with respect to the Group
II Mortgage Loans and (b) the Master Servicer Fee with respect to the Group II
Mortgage Loans, (ii) all Advances relating to interest with respect to the Group
II Mortgage Loans, (iii) all Compensating Interest with respect to the Group II
Mortgage Loans, (iv) Liquidation Proceeds with respect to the Group II Mortgage
Loans (to the extent such Liquidation Proceeds relate to interest) less all
Non-Recoverable Advances with respect to the Group II Mortgage Loans relating to
interest reimbursed during the related Due Period, and (v) any amount withdrawn
from the Capitalized Interest Account allocable to Loan Group II pursuant to
Section 4.07 hereof.
Group II Mortgage Loans: The pool of Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable,
including any Mortgage Loans delivered in replacement thereof or pursuant to a
Subsequent Transfer Instrument.
Group II Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group II Principal Funds for such
Distribution Date and (ii) any Group II Extra Principal Distribution Amount for
such Distribution Date.
Group II Principal Funds: With respect to the Group II
Mortgage Loans and any Distribution Date, the sum, without duplication, of (i)
the scheduled principal due during the related Due Period and received before
the related Servicer Remittance Date or Advanced on or before the related
Servicer Remittance Date, (ii) prepayments collected in the related Prepayment
Period, (iii) the Stated Principal Balance of each Mortgage Loan that was
repurchased by the Depositor, (iv) the amount, if any, by which the aggregate
unpaid principal balance of any Replacement Mortgage Loan is less than the
aggregate unpaid principal of the related Deleted Mortgage Loans delivered by
the Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c), (v) all Liquidation Proceeds collected during the related Due
Period (to the extent such Liquidation Proceeds related to principal), and (vi)
with respect to the Distribution Date in the month immediately following the end
of the Funding Period, any amounts in the Pre-Funding Account allocable to Loan
Group II after giving effect to the purchase of any Subsequent Mortgage Loans,
less all Non-Recoverable Advances relating
- 26 -
to principal reimbursed and all Non-Recoverable Servicing Advances reimbursed in
respect of Group II Mortgage Loans during the related Due Period.
Group II Required Percentage: As of any Distribution Date
following a Group II Stepdown Date, the quotient of (i) the excess of (A) the
Stated Principal Balances of the Group II Mortgage Loans, plus the Pre-Funded
Amount allocable to Loan Group II over (B) the Certificate Principal Balance of
the most senior Class of Group II Certificates outstanding as of the preceding
Servicer Advance Date and (ii) the Stated Principal Balance of the Group II
Mortgage Loans on such Distribution Date.
Group II Stepdown Date: The later to occur of (i) the
Distribution Date in July 2002 or (ii) the first Distribution Date on which (A)
the Group II Class A Certificate Principal Balance is less than or equal to (B)
67.00% (or 65.50%, if a Stepup Trigger Event has occurred) of the Stated
Principal Balances of the Group II Mortgage Loans plus the Pre-Funded Amount
allocable to Loan Group II, in each case, as of the end of the preceding Due
Period.
Group II Subordinated Certificates: The Class IIM-1, Class
IIM-2 and Class IIB Certificates.
Group II Trigger Event: Any Distribution Date on or after the
occurrence of either of the following:
(1) With respect to the Group II Certificates after a Group II Stepdown
Date, the Distribution Date on which (A) the product of 2.5 times the
quotient of (i) the aggregate Stated Principal Balance of all Group II
Mortgage Loans which are 60 or more days delinquent (including, for the
purposes of this calculation, Group II Mortgage Loans in foreclosure
and REO Properties) and (ii) the Stated Principal Balance of the Group
II Mortgage Loans plus the Pre-Funded Amount allocable to Loan Group
II, in each case, as of the preceding Servicer Advance Date equals or
exceeds (b) the Group II Required Percentage.
(2) With respect to the Group II Certificates after a Group II Stepdown
Date, the Distribution Date on which cumulative Realized Losses as a
percentage of the aggregate Stated Principal Balance of the Group II
Mortgage Loans as of the Cut-off Date plus the Original Pre-Funded
Amount allocable to Loan Group II as of such Distribution Date equals
or exceeds the following percentages:
- 27 -
Distribution Date Percentage
----------------- ----------
July 2002-June 2003................................................ 3.20%
July 2003-June 2004 ............................................... 3.90%
July 2004-June 2005................................................ 4.30%
July 2005-June 2006................................................ 4.60%
July 2006 and thereafter........................................... 4.80%
Group II Weighted Maximum Rate Cap: As of any Distribution
Date, a rate equal to (i) the weighted average of the Maximum Mortgage Rates on
the Group II Mortgage Loans on such Distribution Date minus (ii) the sum of (a)
the Servicing Fee Rate and (b) the Master Servicer Fee Rate.
Initial Adjustment Date: As to any Mortgage Loan in Loan Group
II, the first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Loan: Any of the Mortgage Loans identified on
the Mortgage Loan Schedule as of the Closing Date, all of which were included in
the Subsidiary REMIC, all of which shall be "qualified mortgages" within the
meaning of Section 860G(a)(3)(A) of the Code.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate in effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any replacement
policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Subservicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Subservicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
- 28 -
Interest Carryforward Amount: With respect to a Class of
Certificates, as of any Distribution Date, the sum of (i) the excess of (a) the
Current Interest for such Class of Certificates with respect to prior
Distribution Dates (excluding any Class IIA-1 Interest Carryover Amount, Class
IIM-1 Interest Carryover Amount, Class IIM-2 Interest Carryover Amount and Class
IIM-2 Interest Carryover Amount, if applicable) over (b) the amount actually
distributed to such Certificates with respect to interest on such prior
Distribution Dates and (ii) interest on such excess (to the extent permitted by
applicable law) at the applicable pass-through rate for the related Accrual
Period.
Interest Carryover Amount: Any of the Class IIA-1 Interest
Carryover Amount, the Class IIM-1 Interest Carryover Amount, the Class IIM-2
Interest Carryover Amount or Class IIB Interest Carryover Amount, as the case
may be.
Interest Determination Date: With respect to the Group II
Certificates and the Class IA-1 Certificates, for any Accrual Period other than
the first Accrual Period, the second LIBOR Business Day preceding the
commencement of such Accrual Period.
Latest Possible Maturity Date: The Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Subservicer has certified (in
accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees, Servicing
Advances and any other expenses related to such Mortgage Loan.
Loan Group: Either of the Group I Mortgage Loans or the Group
II Mortgage Loans.
Loan Group I: The Group I Mortgage Loans.
- 29 -
Loan Group II: The Group II Mortgage Loans.
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the lesser of (X) the Appraised Value of
the related Mortgaged Property and (Y) the sales price of the related Mortgaged
Property at the time of origination.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: Chase Manhattan Mortgage Corporation, a New
Jersey corporation, or its successor in interest.
Master Servicer Fee: With respect to any Mortgage Loan and any
Distribution Date, the fee payable to the Master Servicer pursuant to Section
6.06 equal to the product of (a) 1/12th of the Master Servicer Fee Rate and (b)
the principal balance of such Mortgage Loan immediately prior to such
Distribution Date.
Master Servicer Fee Rate: A per annum rate equal to 0.0073%.
Maximum Mortgage Rate: With respect to each Group II Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.
Minimum Mortgage Rate: With respect to each Group II Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in an estate in
fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the Group I Mortgage Loans and Group
II Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. Any mortgage loan that was intended by
the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any
- 30 -
reason shall continue to be a Mortgage Loan hereunder until the Purchase Price
with respect thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Trustee to reflect the deletion of Deleted Mortgage
Loans and the addition of Replacement Mortgage Loans pursuant to the provisions
of this Agreement and as supplemented by each schedule of Subsequent Mortgage
Loans attached to a Subsequent Transfer Instrument) transferred to the Trustee
as part of the Trust Fund and from time to time subject to this Agreement,
attached hereto as Exhibit F, setting forth the following information with
respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date and the months remaining before
maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance (or Subsequent Cut-off
Date Principal Balance with respect to a Subsequent
Mortgage Loan);
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date
(or Subsequent Cut-off Date with respect to a Subsequent
Mortgage Loan);
(ix) the Loan-to-Value Ratio at origination;
(x) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Group II Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
- 31 -
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date (or
Subsequent Cut-off Date with respect to a
Subsequent Mortgage Loan);
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(xiii) location of the related Mortgaged Property.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified
in the Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from time to time.
Mortgaged Property: The underlying property securing a
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
MR Interest: The sole class of "residual interest" in the
Master REMIC.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the then current Mortgage Rate less the sum of (a)
the Servicing Fee Rate and (b) the Master Servicer Fee Rate.
Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry Certificate.
Non-Recoverable Advance: Any portion of an Advance previously
made or proposed to be made by the Subservicer that, in the good faith judgment
of the Subservicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Subservicer from the related Mortgagor,
related Liquidation Proceeds or otherwise.
- 32 -
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance previously made or proposed to be made by the Subservicer that, in the
good faith judgment of the Subservicer, will not be ultimately recoverable by
the Subservicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a vice
president (however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of the
Depositor, the Master Servicer or the Subservicer (or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Master Servicer and the Trustee, as the case may be, as required by this
Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Master Servicer on the related Interest Determination Date on
the basis of (a) the offered rates for one-month United States dollar deposits,
as such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on
such Interest Determination Date or (b) if such rate does not appear on Telerate
Page 3750 as of 11:00 a.m. (London time), the offered rates of the Reference
Banks for one-month United States dollar deposits, as such rates appear on the
Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each Interest Determination Date, One-Month LIBOR for the related
Accrual Period will be established by the Master Servicer as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be
the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of
0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related 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.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor, the Master Servicer or the Subservicer, reasonably
acceptable to each addressee of such opinion; provided, however, that with
respect to Section 6.04 or 10.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Depositor,
the
- 33 -
Master Servicer and the Subservicer, (ii) not have any direct financial interest
in the Depositor, the Master Servicer or the Subservicer or in any affiliate of
either, and (iii) not be connected with the Depositor, the Master Servicer or
the Subservicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Optional Termination: The termination of either Loan Group
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.
Optional Termination Amounts: With respect to either Loan
Group, the Repurchase Price paid by the Master Servicer in connection with any
repurchase of all of the Mortgage Loans in such Loan Group pursuant to Section
9.01.
Optional Termination Date: With respect to either Loan Group,
the Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in such Loan Group is equal to or less than 10% of the aggregate
Initial Certificate Principal Balance of the Certificates in such Loan Group.
Original Mortgage Loan: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Pre-Funded Amount: The amount deposited by the
Depositor in the Pre-Funding Account on the Closing Date, which amount is
$144,986,925, of which $49,989,802 is allocable to Loan Group I and $94,997,123
is allocable to Loan Group II.
Original Value: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying Mortgaged
Property, on the lower of an appraisal satisfactory to the Seller, or the sales
price of such property or, in the case of a refinancing, on an appraisal
satisfactory to the Seller.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except: (i) Certificates theretofore canceled by the Master
Servicer or delivered to the Master Servicer for cancellation; and (ii)
Certificates in exchange for which or in lieu of which other Certificates have
been executed by the Depositor and delivered by the Master Servicer pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Loan, prior to the end of the related Prepayment Period.
- 34 -
Ownership Interest: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Paying Agent: As defined in Section 5.11 hereof.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided
beneficial ownership interest in the related Certificate Group
evidenced by such Class which shall be equal to the Class Certificate
Principal Balance of such Class divided by the Class Principal Balance
of all Classes in such Certificate Group; and
(ii) any Certificate, the Percentage Interest evidenced
thereby of the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class.
Periodic Rate Cap: As to each Group II Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each such Rating Agency as evidenced by a letter from
each Rating Agency;
(iii)commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each such Rating Agency, or such lower rating as will not result in
the downgrading or withdrawal of the ratings then assigned to the
Certificates by each such Rating Agency as evidenced by a letter from
each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state
- 35 -
banking authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository institution or
trust company are then rated one of the two highest long-term and the
highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any such Rating Agency as evidenced by a letter from
each Rating Agency;
(v) demand or time deposits or certificates of deposit issued
by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two highest
long-term or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements, such terms
and conditions as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any such Rating Agency
as evidenced by a letter from each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency or such lower
rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any such Rating Agency, as
evidenced by a signed writing delivered by each such Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term
rating by each such Rating Agency or such lower rating as will not
result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by each such Rating Agency as evidenced by a
letter from each Rating Agency;
(x) short term investment funds sponsored by any trust company
or national banking association incorporated under the laws of the
United States or any state thereof which on the date of acquisition
has been rated by each such Rating Agency in their respective highest
applicable rating category or such lower rating as will not result in
the downgrading or withdrawal of the ratings then assigned to the
Certificates by each such Rating Agency as evidenced by a letter from
each Rating Agency; and
- 36 -
(xi) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to each Rating
Agency as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any such Rating Agency, as
evidenced by a signed writing delivered by each such Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, that no amount beneficially owned by any REMIC (including,
without limitation, any amounts collected by the Subservicer but not yet
deposited in the Collection Account) may be invested in investments (other than
money market funds) treated as equity interests for Federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely affect
the status of the Trust Fund as a REMIC under the Code or result in imposition
of a tax on the Trust Fund. Permitted Investments that are subject to prepayment
or call may not be purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, and (v) a
Person that is not a citizen or resident of the United States, a corporation or
partnership (or other entity treated as a corporation or partnership for United
States federal income tax purposes) created or organized in or under the laws of
the United States or any State thereof or the District of Columbia or an estate
whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust, unless
such Person has furnished the transferor, the Master Servicer and the Trustee
with a duly completed Internal Revenue Service Form 4224 or applicable successor
form. The terms "United States," "State" and "International Organization" shall
have the meanings set forth in section 7701 of the Code or successor provisions.
A corporation will not be treated as an instrumentality of the United States or
of any State thereof for these purposes if all of its activities are subject to
tax and, with the exception of
- 37 -
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date,
the sum of (i) the aggregate of the Stated Principal Balances, as of such
Distribution Date, of the Mortgage Loans that were Outstanding Mortgage Loans as
of such date and (ii) the Pre-Funded Amount.
Pre-Funded Amount: As of any date of determination and each
Loan Group, the amount on deposit in the Pre-Funding Account (not including any
income or gain on such amount) allocated to such Loan Group.
Pre-Funding Account: The account established and maintained
pursuant to Section 4.06.
Prepayment Assumption: A rate of prepayment, as described in
the Prospectus Supplement, relating to the Certificates in a Certificate Group.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in full (other than a Principal
Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 3.12 or 9.01 hereof), the amount, if any, by which (i) one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan immediately prior to such prepayment or in the
case of a partial Principal Prepayment on the amount of such prepayment exceeds
(ii) the amount of interest paid or collected in connection with such Principal
Prepayment.
Prepayment Period: As to any Distribution Date, the period
beginning with the opening of business on the first day of the calendar month
preceding the month in which such Distribution Date occurs and ending on the
close of business on the last day of such month.
Principal Prepayment: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Subservicer in accordance with the terms of
the related Mortgage Note.
- 38 -
Prospectus Supplement: The Prospectus Supplement dated June
16, 1999 relating to the public offering of the Group I Certificates and the
Group II Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required
to be repurchased by the Seller, pursuant to Section 2.02 or, 2.03 hereof or (y)
that the Master Servicer has a right to purchase pursuant to Section 3.12
hereof, an amount equal to the sum of (i) 100% of the unpaid principal balance
of the Mortgage Loan as of the date of such purchase together with any
unreimbursed Servicing Advances and (ii) accrued interest thereon at the
applicable Net Mortgage Rate from (a) the date through which interest was last
paid by the Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders.
Rating Agency: Xxxxx'x Investors Service, Inc. ("Moody's"),
and Fitch IBCA, Inc. ("Fitch"). If any such organization or its successor is no
longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Liquidated Loan, the
amount, if any, by which the Stated Principal Balance and accrued interest
thereon at the Net Mortgage Rate exceeds the amount actually recovered by the
Subservicer with respect thereto (net of reimbursement of Advances and Servicing
Advances) at the time such Mortgage Loan became a Liquidated Loan or (ii) with
respect to a Mortgage Loan which is not a Liquidated Loan, any amount of
principal that the Mortgagor is no longer legally required to pay (except for
the extinguishment of debt that results from the exercise of remedies due to
default by the Mortgagor).
Record Date: With respect to any Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
the applicable Distribution Date occurs.
Reference Banks: Barclays Bank PLC, The Chase Manhattan Bank,
Citibank, N.A. and NatWest, N.A.; provided that if any of the foregoing banks
are not suitable to serve as a Reference Bank, then any leading banks selected
by the Master Servicer which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, England, (ii) whose quotations appear on the Reuters Screen
LIBO Page on the relevant Interest Determination Date and (iii) which have been
designated as such by the Master Servicer.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any one of the Group I Certificates or
the Group II Certificates.
- 39 -
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code. References herein to "the REMIC" shall mean
either of (or, as the context requires, both of) the Master REMIC or the
Subsidiary REMIC created hereunder.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Subservicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor for a Deleted Mortgage Loan, which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit M, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not less than 90% of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) with respect to any Group I Mortgage Loan, have a
Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan and, with respect to any Group II
Mortgage Loan: (a) have a Maximum Mortgage Rate no more than 1% per annum higher
or lower than the Maximum Mortgage Rate of the Deleted Mortgage Loan; (b) have a
Minimum Mortgage Rate no more than 1% per annum higher or lower than the Minimum
Mortgage Rate of the Deleted Mortgage Loan; (c) have the same index and Periodic
Rate Cap as that of the Deleted Mortgage Loan and a Gross Margin not more than
1% per annum higher or lower than that of the Deleted Mortgage Loan; and (d) not
permit conversion of the related Mortgage Rate to a fixed Mortgage Rate; (iii)
have the same or higher credit quality characteristics than that of the Deleted
Mortgage Loan; (iv) be accruing interest at a rate not more than 1% per annum
higher or lower than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (vi) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (vii) provide for a prepayment charge on terms
substantially similar to those of the prepayment charge, if any, of the Deleted
Mortgage Loan; (viii) have the same lien priority as the Deleted Mortgage Loan;
(ix) constitute the same occupancy type as the Deleted Mortgage Loan; and (x)
comply with each representation and warranty set forth in Section 2.03 hereof.
Repurchase Price: As defined in Section 9.01.
Request for Release: The Request for Release submitted by the
Subservicer to the Trustee, substantially in the form of Exhibits M hereto.
- 40 -
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement.
Reserve Interest Rate: With respect to any Interest
Determination Date for the Group II Certificates, the rate per annum that the
Master Servicer determines to be either (i) the arithmetic mean (rounded upwards
if necessary to the nearest whole multiple of 0.03125%) of the one-month United
States dollar lending rates which New York City banks selected by the Master
Servicer are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or in
the event that the Master Servicer can determine no such arithmetic mean or (ii)
the lowest one-month United States dollar lending rate which New York City banks
selected by the Master Servicer are quoting on such Interest Determination Date
to leading European banks.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Reuters Screen LIBO Page: The display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks.
Sale Agreement: The Mortgage Loan Sale Agreement dated as of
June 18, 1999 between the Depositor and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
Securities Act: The Securities Act of 1933, as amended.
Seller: Chase Manhattan Mortgage Corporation, a New Jersey
corporation, or its successor in interest.
Servicer Advance Date: As to any Distribution Date, the
related Servicer Remittance Date.
Servicer Remittance Date: With respect to any Distribution
Date, the 18th day of the month in which such Distribution Date occurs, or if
such 18th day is not a Business Day, the Business Day preceding such 18th day.
- 41 -
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the
Subservicer of its servicing obligations hereunder, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, including without limitation advances in respect of real estate taxes
and assessments, (ii) any collection, enforcement or judicial proceedings,
including without limitation foreclosures, collections and liquidations, (iii)
the conservation, management, sale and liquidation of any REO Property and (iv)
compliance with the obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing Officer: Any officer of the Subservicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee and the Master Servicer by the Subservicer on the Closing Date
pursuant to this Agreement, as such list may from time to time be amended.
SR Interest: The sole class of "residual interest" in the
Subsidiary REMIC.
Startup Date: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date (or Subsequent Cut-off Date with
respect to Subsequent Mortgage Loans) and each day thereafter to and including
the first Distribution Date, the Cut-off Date Principal Balance thereof (or
Subsequent Cut-off Date Principal Balance thereof with respect to Subsequent
Mortgage Loans), and (ii) as of any Distribution Date after the first
Distribution Date after the Cut-off Date (or Subsequent Cut-off Date, as
applicable), such Cut-off Date Principal Balance or Subsequent Cut-off Date
Principal Balance, as applicable, minus the sum of (a) the principal portion of
the Scheduled Payments (x) due with respect to such Mortgage Loan during each
Due Period ending prior to the immediately preceding Distribution Date and (y)
that were received by the Subservicer as of the close of business on the
Determination Date related to such preceding Distribution Date or with respect
to which Advances were made on each Servicer Advance Date prior to such
preceding Distribution Date and (b) all Principal Prepayments with respect to
such Mortgage Loan received prior to the preceding Prepayment Period, and all
Liquidation Proceeds to the extent applied by the Subservicer as recoveries of
principal in accordance with Section 3.12 with respect to such Mortgage Loan,
that were received by the Subservicer as of the close of business on the
Determination Date related to such preceding Distribution Date. The Stated
Principal Balance of any Mortgage Loan immediately
- 42 -
following a given Distribution Date shall be deemed to equal the Stated
Principal Balance of such Mortgage Loan as of the immediately following
Distribution Date, and, in particular, the Stated Principal Balance of any
Mortgage Loan that becomes a Liquidated Loan will be zero immediately following
the Distribution Date following the Prepayment Period in which such Mortgage
Loan becomes a Liquidated Loan.
Stepup Trigger Event: Any Distribution Date on or after the
occurrence of either of the following:
(A) cumulative Realized Losses as a percentage of the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the Cut-off Date plus the Original
Pre-Funded Amount allocable to Loan Group II as of such Distribution Date equals
or exceeds the following percentages:
Distribution Date Percentage
----------------- ----------
July 1999-June 2001................................................... 1.00%
July 2001-June 2002 .................................................. 1.25%
July 2002-June 2003................................................... 2.00%
July 2003-June 2004................................................... 3.00%
July 2004 and thereafter.............................................. 4.00%
or (B) the Three Month Rolling Average of Group II Mortgage Loans that are 60
days or more Delinquent as of such Distribution Date as a percentage of the
aggregate Stated Principal Balances of the Group II Mortgage Loans plus the
Pre-Funded Amount allocable to Loan Group II equals or exceeds the following
percentages
Distribution Date Percentage
----------------- ----------
July 1999-June 2003................................................... 8.00%
July 2003-June 2005 .................................................. 10.00%
July 2005-June 2006................................................... 12.00%
July 2006-June 2007................................................... 14.00%
July 2007 and thereafter.............................................. 16.00%
Subsequent Cut-off Date Principal Balance: As to any
Subsequent Mortgage Loan, the unpaid principal balance thereof as of the close
of business on the calendar day immediately preceding the Subsequent Cut-off
Date after application of all payments of principal due on or prior to the
Subsequent Cut-off Date, whether or not received, and all Principal Prepayments
received prior to the Subsequent Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates on and after the
Subsequent Cut-off Date.
- 43 -
Subsequent Cut-off Date: With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the first day of the month in which the related Subsequent Transfer
Date occurs.
Subsequent Mortgage Loan: A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.10, such Mortgage Loan and its
related Loan Group being identified on the Mortgage Loan Schedule attached to a
Subsequent Transfer Instrument, all of which shall be "qualified mortgages"
within the meaning of Section 860G(a)(3)(A) of the Code.
Subsequent Mortgage Loan Purchase Agreement: The agreement
between the Depositor and the Mortgage Loan Seller regarding the transfer of the
Subsequent Mortgage Loans by the Seller to the Depositor.
Subsequent Transfer Date: With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.
Subsequent Transfer Instrument: Each Subsequent Transfer
Instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form of Exhibit N, by which Subsequent
Mortgage Loans are sold to the Trust Fund.
Subservicer: Advanta Mortgage Corp. USA, a Delaware
corporation, or its successor in interest.
Subservicing Agreement: As defined in Section 3.02(a).
Subsidiary REMIC: As described in Section 2.07.
Subsidiary REMIC Interest: Any one of the Subsidiary REMIC
Regular Interests or the SR Interest.
Subsidiary REMIC Regular Interest: Any one of the "regular
interests" in the Subsidiary REMIC described in Section 2.07.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(c), the excess of (x) the principal balance
of the Mortgage Loan that is substituted for, over (y) the principal balance of
the related substitute Mortgage Loan, each balance being determined as of the
date of substitution.
- 44 -
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation Section 1.860F-4(d) and
temporary Treasury regulation Section 301.6231(a)(7)-1T.
Three Month Rolling Average: As of any Distribution Date, the
average percentage (based on Stated Principal Balance) of Group II Mortgage
Loans which are 60 days or more Delinquent (including Mortgage Loans in
foreclosure and real estate owned) as of the last day of each of the three (or
one and two in the case of the first two Distribution Dates) most recently ended
months.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Trust Fund: The corpus of the trust (the "Chase Funding Trust,
Series 1999-2") created hereunder consisting of (i) the Mortgage Loans and all
interest and principal received on or with respect thereto on and after the
Cut-off Date to the extent not applied in computing the Cut-off Date Principal
Balance (or Subsequent Cut-off Date Principal Balance, as applicable) thereof,
exclusive of interest not required to be deposited in the Collection Account
pursuant to Section 3.05(b)(ii); (ii) the Collection Account, the Certificate
Account, the Distribution Account, the Capitalized Interest Account and the
Pre-Funding Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv)
the mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loan; and (v) all proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or other liquid property.
Trustee: Citibank, N.A., a national banking association, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Group I Certificates and Group II Certificates,
and 5% to the Class R Certificates, with the allocation among the Group I
Certificates and Group II Certificates to be in proportion to the Class
Certificate Principal Balance of each Class relative to the Class Certificate
Principal Balance of all other Classes. Voting Rights will be allocated among
the Certificates of each such Class in accordance with their respective
Percentage Interests.
- 45 -
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the
Initial Mortgage Loans, including all interest and principal received on or with
respect to the Initial Mortgage Loans on or after the Cut-off Date (other than
Scheduled Payments due on the Initial Mortgage Loans on or before the Cut-off
Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Initial Mortgage Loan so assigned and the Depositor shall, in
accordance with Section 2.10, deliver to, and deposit with, the Trustee the
following documents or instruments with respect to each Subsequent Mortgage
Loan:
(A) (I) Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
Consolidation, Extension and Modification Agreement (or a lost note
affidavit (including a copy of the original Consolidation, Extension
and Modification Agreement), in either case endorsed, "Pay to the
order of Citibank, N.A., as trustee, without recourse."
(B) The original Mortgage (including all riders thereto) with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such mortgage has been recorded or,
if the original Mortgage has not been returned from the applicable
public recording office, a true certified copy, certified by the
Seller, of the original Mortgage together with a certificate of the
Seller certifying that the original Mortgage has been delivered for
recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
(C) The original Assignment of Mortgage to "Citibank, N.A., as
trustee," which assignment shall be in form and substance acceptable
for recording, or a copy certified by the Seller as a true and correct
copy of the original Assignment which has been sent for recordation.
Subject to the foregoing, such assignments may, if permitted by law,
be by blanket assignments for Mortgage Loans covering Mortgaged
Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
- 46 -
(D) The original policy of title insurance, including riders
and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(E) Originals of all recorded intervening Assignments of
Mortgage, or copies thereof, certified by the public recording office
in which such Assignments or Mortgage have been recorded showing a
complete chain of title from the originator to the Depositor, with
evidence of recording, thereon, or a copy thereof certified by the
public recording office in which such Assignment of Mortgage has been
recorded or, if the original Assignment of Mortgage has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage
together with a certificate of the Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
(F) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not
been returned from the applicable public recording office, a true
certified copy, certified by the Seller, of such original document
together with certificate of Seller certifying the original of such
document has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
(G) If the Mortgaged Note or Mortgage or any other material
document or instrument relating to the Mortgaged Loan has been signed
by a person on behalf of the Mortgagor, the original power of attorney
or other instrument that authorized and empowered such person to sign
bearing evidence that such instrument has been recorded, if so
required in the appropriate jurisdiction where the Mortgaged Property
is located (or, in lieu thereof, a duplicate or conformed copy of such
instrument, together with a certificate of receipt from the recording
office, certifying that such copy represents a true and complete copy
of the original and that such original has been or is currently
submitted to be recorded in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located),
or if the original power of attorney or other such instrument has been
delivered for recording in the appropriate public recording office of
the jurisdiction in which the Mortgaged Property is located.
If in connection with any Mortgage Loan the Depositor cannot
deliver the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon
concurrently with the execution and delivery of this Agreement solely because of
a delay caused by the public recording office where such Mortgage, Assignments
of Mortgage or assumption, consolidation or modification, as the case may be,
has been delivered for
- 47 -
recordation, the Depositor shall deliver or cause to be delivered to the Trustee
written notice stating that such Mortgage, Assignments of Mortgage or
assumption, consolidation or modification, as the case may be, has been
delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording indicated thereon
upon receipt thereof from the public recording office.
The Master Servicer shall cause to be recorded in the
appropriate public recording office for real property records each Assignment of
Mortgage referred to in this Section 2.01 as soon as practicable. While each
Assignment of Mortgage to be recorded is being recorded, the Master Servicer
shall deliver to the Trustee a photocopy of such document. If any such
Assignment of Mortgage is returned unrecorded to the Master Servicer because of
any defect therein, the Master Servicer shall cause such defect to be cured and
such document to be recorded in accordance with this paragraph. The Depositor
shall deliver or cause to be delivered each original recorded Assignment of
Mortgage and intermediate assignment to the Trustee within 270 days of the
Closing Date (or Subsequent Transfer Date, with respect to Subsequent Mortgage
Loans) or shall deliver to the Trustee on or before such date an Officer's
Certificate stating that such document has been delivered to the appropriate
public recording office for recordation, but has not been returned solely
because of a delay caused by such recording office. In any event, the Depositor
shall use all reasonable efforts to cause each such document with evidence of
recording thereon to be delivered to the Trustee within 300 days of the Closing
Date (or Subsequent Transfer Date, with respect to Subsequent Mortgage Loans).
The ownership of each Mortgage Note, the Mortgage and the
contents of the related Mortgage File is vested in the Trustee. Neither the
Depositor, the Subservicer nor the Master Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest
therein. The Depositor, the Subservicer and the Master Servicer shall respond to
any third party inquiries with respect to ownership of the Mortgage Loans by
stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Subservicer, for
the benefit of the Trustee as the owner thereof, and the Subservicer's
possession of the contents of each Mortgage File so retained is for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Subservicer is in a custodial capacity only. The Depositor
agrees to take no action inconsistent with the Trustee's ownership of the
Mortgage Loans, to promptly indicate to all inquiring parties that the Mortgage
Loans have been sold and to claim no ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of
the Depositor's right, title and interest in and to the Trust Fund pursuant to
this Agreement shall constitute a purchase and sale and not a loan. If a
conveyance of Mortgage Loans from the Seller to the Depositor is characterized
as a pledge and not a sale, then the Depositor shall be deemed to have
transferred to the Trustee all of the Depositor's right, title and interest in,
to and under the obligations of the Seller deemed to be secured by said pledge;
and it is the intention of this Agreement that the Depositor shall also be
deemed to have
- 48 -
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of
this Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee all of its right, title and interest assigns to the Trustee for the
benefit of the Certificateholders those representations and warranties of the
Seller contained in the Sale Agreement and the benefit of the repurchase
obligations and the obligations of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
Except as set forth in the Exception Report delivered
contemporaneously herewith (the "Exception Report"), the Trustee acknowledges
receipt of the Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does not acknowledge receipt of all documents required to be included
in such Mortgage File) with respect to each Mortgage Loan and declares that it
holds and will hold such documents and any other documents constituting a part
of the Mortgage Files delivered to it in trust for the use and benefit of all
present and future Certificateholders. The Depositor will cause the Seller to
repurchase any Mortgage Loans to which an exception was taken in the Exception
Report unless such exception is cured to the satisfaction of the Trustee within
45 Business Days of the Closing Date (or Subsequent Transfer Date, with respect
to Subsequent Mortgage Loans).
The Trustee agrees, for the benefit of Certificateholders, to
review each Mortgage File delivered to it within 270 days after the Closing Date
(or Subsequent Transfer Date, with respect to Subsequent Mortgage Loans) to
ascertain that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit F that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days)
- 49 -
after such finding so notify the Subservicer, the Seller and the Depositor. In
addition, the Trustee shall also notify the Subservicer, the Seller and the
Depositor, if (a) in examining the Mortgage Files, the documentation shows on
its face (i) any adverse claim, lien or encumbrance, (ii) that any Mortgage Note
was overdue or had been dishonored, (iii) any evidence on the face of any
Mortgage Note or Mortgage of any security interest or other right or interest
therein, or (iv) any defense against or claim to the Mortgage Note by any party
or (b) the original Mortgage with evidence of recording thereon with respect to
a Mortgage Loan is not received within 270 days of the Closing Date (or
Subsequent Transfer Date, with respect to Subsequent Mortgage Loans). The
Trustee shall request that the Seller correct or cure such omission, defect or
other irregularity, or substitute a Mortgage Loan pursuant to the provisions of
Section 2.03(c), within 90 days from the date the Seller was notified of such
omission or defect and, if the Seller does not correct or cure such omission or
defect within such period, that the Seller purchase such Mortgage Loan from the
Trustee within 90 days from the date the Trustee notified the Seller of such
omission, defect or other irregularity at the Purchase Price of such Mortgage
Loan. The Purchase Price for any Mortgage Loan purchased pursuant to this
Section 2.02 shall be paid to the Subservicer and deposited by the Subservicer
in the Collection Account promptly upon receipt, and, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee shall promptly release to the Seller the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or
assignment, without recourse, as shall be necessary to vest in the Seller or its
designee, as the case may be, any Mortgage Loan released pursuant hereto, and
the Trustee shall have no further responsibility with regard to such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to purchase,
cure or substitute any Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to the Trustee on behalf of
Certificateholders. The Trustee shall be under no duty or obligation to inspect,
review and examine such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable or appropriate to the represented
purpose, or that they have actually been recorded, or that they are other than
what they purport to be on their face. The Trustee and the Subservicer each
shall keep confidential the name of each Mortgagor and neither the Trustee nor
the Subservicer shall solicit any such Mortgagor for the purpose of refinancing
the related Mortgage Loan. Without limiting the generality of the foregoing,
from and after the Closing Date, the Subservicer agrees that it will not take
any action or permit or cause any action to be taken by the Subservicer, any of
its agents or affiliates, or by any independent contractors on the Subservicer's
behalf, to personally, by telephone or mail, solicit the borrower or Mortgagor
under any Mortgage Loan to refinance the Mortgage Loan, in whole or in part.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Subservicer or any affiliate thereof which are directed to the
general public at large, including without limitation, mass mailing based on
commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this paragraph, nor is
the Subservicer or any affiliate thereof prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or agent of a Mortgagor;
provided, however that neither the Subservicer nor any affiliate thereof may
respond to any such unsolicited request or inquiry if such unsolicited request
or inquiry (including, without limitation, any verification of mortgage, payoff
request or refinance inquiry) was directed to the Subservicer in the
- 50 -
Subservicer's capacity as servicer of the related Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of Mortgagors and data relating to their Mortgages shall be retained by the
Master Servicer.
Within 280 days of the Closing Date (or Subsequent Transfer
Date, with respect to Subsequent Mortgage Loans), the Trustee shall deliver to
the Depositor and the Master Servicer the Trustee's Certification, substantially
in the form of Exhibit H attached hereto, setting forth the status of the
Mortgage Files as of such date.
SECTION 2.03. Representations, Warranties and Covenants of
the Depositor.
(a) The Depositor hereby represents and warrants to the
Subservicer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly
existing as a corporation in good standing under the laws of the State
of New York and has full power and authority (corporate and other)
necessary to own or hold its properties and to conduct its business as
now conducted by it and to enter into and perform its obligations
under this Agreement.
(ii) The Depositor has the full corporate power and
authority to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement and has
duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the Depositor
in accordance with its terms, subject, as to enforceability, to (i)
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and (ii) general principles
of equity, regardless of whether enforcement is sought in a proceeding
in equity or at law.
(iii) The execution and delivery of this Agreement by
the Depositor, the consummation of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of the Depositor and
will not (A) result in a material breach of any term or provision of
the charter or by-laws of the Depositor or (B) materially conflict
with, result in a violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which the Depositor is a party or by which it may be
bound or (C) constitute a material violation of any statute, order or
regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Depositor; and the Depositor is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body,
- 51 -
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair the Depositor's
ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Depositor of, or compliance
by the Depositor with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the
same. The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date, and following
the transfer of the Mortgage Loans to it by the Seller, the Depositor
had good title to the Mortgage Loans and the Mortgage Notes were
subject to no offsets, claims, defenses or counterclaims.
(vi) The Depositor hereby represents and warrants to
the Trustee for the benefit of the Certificateholders that on the
Closing Date it has entered into the Sale Agreement with the Seller,
that the Seller has made the following representations and warranties
with respect to each Mortgage Loan in such Sale Agreement as of the
Closing Date, which representations and warranties run to and are for
the benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the
Trustee for the benefit of the Certificateholders, pursuant to Section
2.01 hereof, the right to cause the Seller to repurchase a Mortgage
Loan as to which there has occurred an uncured breach of
representations and warranties in accordance with the provisions of
the Sale Agreement.
(1) The Seller is an approved seller of
conventional mortgage loans for FNMA or FHLMC
and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing
Act.
(2) The information set forth on the Mortgage
Loan Schedule is true and correct in all
material respects as of the Closing Date.
(3) The Seller will treat the transfer of the
Mortgage Loans to the Depositor as a sale of
the Mortgage Loans for all accounting and tax
purposes.
- 52 -
(4) No Initial Mortgage Loan is more than 59 days
delinquent in payment of principal and
interest, and no more than 1.5% of the
Mortgage Loans are 30-59 days delinquent in
the payment of principal and interest.
(5) Of the Initial Mortgage Loans, no Group I
Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95.00% and no Group
II Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95.00%.
(6) Each Mortgage is a valid and enforceable
first lien on the Mortgaged Property subject
only to (a) the lien of non-delinquent real
property taxes and assessments not yet due
and payable, (b) covenants, conditions and
restrictions, rights of way, easements and
other matters of public record as of the date
of recording of such Mortgage, such
exceptions appearing of record being
acceptable to mortgage lending institutions
generally, specifically referred to in the
lender's title insurance policy referred to
in (14) below or referred to or otherwise
considered in the appraisal made in
connection with the origination of the
related Mortgage Loan, and (c) other matters
to which like properties are commonly subject
that do not materially interfere with the
benefits of the security intended to be
provided by such Mortgage.
(7) Immediately prior to the assignment of the
Mortgage Loans to the Depositor, the Seller
had good title to, and was the sole owner of,
each Mortgage Loan free and clear of any
pledge, lien, encumbrance or security
interest and had full right and authority,
subject to no interest or participation of,
or agreement with, any other party, to sell
and assign the same pursuant to this
Agreement.
(8) There is no delinquent tax or assessment lien
against any Mortgaged Property.
(9) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or
Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note.
(10) There are no mechanics' liens or claims for
work, labor or material affecting any
Mortgaged Property that are or may be a lien
prior to, or equal with, the lien of such
Mortgage, except those that are insured
against by the title insurance policy
referred to in item (14) below.
- 53 -
(11) As of the Closing Date, to the best of the
Seller's knowledge, each Mortgaged Property
is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or
other casualty so as to affect adversely the
value of the Mortgaged Property as security
for the Mortgage Loan or the use for which
the premises were intended.
(12) Each Mortgage Loan at origination complied in
all material respects with applicable state
and federal laws, including, without
limitation, usury, equal credit opportunity,
real estate settlement procedures,
truth-in-lending and disclosure laws, and
consummation of the transactions contemplated
hereby will not involve the violation of any
such laws.
(13) As of the Closing Date, neither the Seller
nor any prior holder of any Mortgage has
modified the Mortgage in any material respect
(except that a Mortgage Loan may have been
modified by a written instrument that has
been recorded or submitted for recordation,
if necessary, to protect the interests of the
Certificateholders and the original or a copy
of which has been delivered to the Trustee);
satisfied, canceled or subordinated such
Mortgage in whole or in part; released the
related Mortgaged Property in whole or in
part from the lien of such Mortgage; or
executed any instrument of release,
cancellation, modification (except as
expressly permitted above) or satisfaction
with respect thereto.
(14) A lender's policy of title insurance together
with a condominium endorsement and extended
coverage endorsement, if applicable (subject
to exceptions acceptable in the industry,
including exceptions with respect to surveys
and endorsements), in an amount at least
equal to the Cut-off Date Stated Principal
Balance of each such Mortgage Loan or a
commitment (binder) to issue the same was
effective on the date of the origination of
each Mortgage Loan, each such policy is valid
and remains in full force and effect, and
each such policy was issued by a title
insurer qualified to do business in the
jurisdiction where the related Mortgaged
Property is located and acceptable to FNMA or
FHLMC and is in a form acceptable to FNMA or
FHLMC, which policy insures the Seller and
successor owners of indebtedness secured by
the related insured Mortgage, as to the first
priority lien, of the related Mortgage
subject to the exceptions set forth in
paragraph (6) above; to the best of the
Seller's knowledge, no claims have been made
under such mortgage title insurance policy
and no prior holder of the related Mortgage,
including
- 54 -
the Seller, has done, by act or omission,
anything that would impair the coverage of
such mortgage title insurance policy.
(15) To the best of the Seller's knowledge, as of
the date of origination all of the
improvements that were included for the
purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the
boundaries and building restriction lines of
such property, and no improvements on
adjoining properties encroach upon the
Mortgaged Property.
(16) To the best of the Seller's knowledge, as of
the date of origination no improvement
located on or being part of the Mortgaged
Property is in violation of any applicable
zoning law or regulation. To the best of the
Seller's knowledge, as of the date of
origination all inspections, licenses and
certificates required to be made or issued
with respect to all occupied portions of the
Mortgaged Property and, with respect to the
use and occupancy of the same, including but
not limited to certificates of occupancy and
fire underwriting certificates, have been
made or obtained from the appropriate
authorities, unless the lack thereof would
not have a material adverse effect on the
value of such Mortgaged Property, and the
Mortgaged Property is lawfully occupied under
applicable law.
(17) The Mortgage Note and the related Mortgage
are genuine, and each is the legal, valid and
binding obligation of the maker thereof,
enforceable in accordance with its terms and
under applicable law, except that (a) the
enforceability thereof may be limited by
bankruptcy, insolvency, moratorium,
receivership and other similar laws relating
to creditors' rights generally and (b) the
remedy of specific performance and injunctive
and other forms of equitable relief may be
subject to equitable defenses and to the
discretion of the court before which any
proceeding therefor may be brought. To the
best of the Seller's knowledge, all parties
to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note
and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed
by such parties.
(18) The proceeds of the Mortgage Loan have been
fully disbursed, there is no requirement for
future advances thereunder and completion of
any on-site or off-site improvements and as
to disbursements of any escrow funds therefor
have been complied with. All costs, fees and
expenses
- 55 -
incurred in making, or closing or recording
the Mortgage Loans were paid.
(19) The related Mortgage contains customary and
enforceable provisions that render the rights
and remedies of the holder thereof adequate
for the realization against the Mortgaged
Property of the benefits of the security,
including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's
sale, and (ii) otherwise by judicial
foreclosure.
(20) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified
under applicable law to serve as such, has
been properly designated and currently so
serves and is named in such Mortgage, and no
fees or expenses are or will become payable
by the Certificateholders to the trustee
under the deed of trust, except in connection
with a trustee's sale after default by the
Mortgagor.
(21) There exist no deficiencies with respect to
escrow deposits and payments, if such are
required, for which customary arrangements
for repayment thereof have not been made, and
no escrow deposits or payments of other
charges or payments due the Seller have been
capitalized under the Mortgage or the related
Mortgage Note.
(22) The origination and underwriting practices
used by the Seller with respect to each
Mortgage Loan have been in all respects legal
and customary in the mortgage lending
business.
(23) There is no pledged account or other security
other than real estate securing the
Mortgagor's obligations.
(24) Each Mortgage Loan contains a customary "due
on sale" clause.
(25) At the Cut-off Date, the improvements upon
each Mortgaged Property are covered by a
valid and existing hazard insurance policy
with a generally acceptable carrier that
provides for fire and extended coverage and
coverage for such other hazards as are
customary in the area where the Mortgaged
Property is located in an amount that is at
least equal to the lesser of (i) the maximum
insurable value of the improvements securing
such Mortgage Loan or (ii) the greater of (a)
the outstanding principal balance of the
Mortgage Loan and (b) an amount such that the
proceeds of such policy shall be sufficient
to prevent the Mortgagor and/or the mortgagee
from becoming a co-insurer. If the Mortgaged
- 56 -
Property is a condominium unit, it is
included under the coverage afforded by a
blanket policy for the condominium unit. All
such individual insurance policies and all
flood policies referred to in item (26) below
contain a standard mortgagee clause naming
the Seller or the original mortgagee, and its
successors in interest, as mortgagee, and the
Seller has received no notice that any
premiums due and payable thereon have not
been paid; the Mortgage obligates the
Mortgagor thereunder to maintain all such
insurance, including flood insurance, at the
Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor
from the Mortgagor.
(26) If the Mortgaged Property is in an area
identified in the Federal Register by the
Federal Emergency Management Agency as having
special flood hazards, a flood insurance
policy in a form meeting the requirements of
the current guidelines of the Flood Insurance
Administration is in effect with respect to
such Mortgaged Property with a generally
acceptable carrier in an amount representing
coverage not less than the least of (A) the
original outstanding principal balance of the
Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on
a replacement cost basis, or (C) the maximum
amount of insurance that is available under
the Flood Disaster Protection Act of 1973, as
amended.
(27) To the best of the Seller's knowledge, there
is no proceeding occurring, pending or
threatened for the total or partial
condemnation of the Mortgaged Property.
(28) There is no material monetary default
existing under any Mortgage or the related
Mortgage Note and, to the best of the
Seller's knowledge, there is no material
event that, with the passage of time or with
notice and the expiration of any grace or
cure period, would constitute a default,
breach, violation or event of acceleration
under the Mortgage or the related Mortgage
Note; and the Seller has not waived any
default, breach, violation or event of
acceleration.
(29) Each Mortgaged Property is of a type
described in the Prospectus Supplement.
(30) Each Mortgage Loan is being serviced by the
Subservicer.
- 57 -
(31) Any future advances made prior to the Cut-Off
date have been consolidated with the
outstanding principal amount secured by the
Mortgage, and the secured principal amount,
as consolidated, bears a single interest rate
and single repayment term. The lien of the
Mortgage securing the consolidated principal
amount is expressly insured as having first
lien priority by a title insurance policy, an
endorsement to the policy insuring the
mortgagee's consolidated interest or by other
title evidence acceptable to FNMA and FHLMC.
The consolidated principal amount does not
exceed the original principal amount of the
Mortgage Loan.
(32) Prior to the approval of the Mortgage Loan
application, an appraisal of the related
Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the
originator, who had no interest, direct or
indirect, in the Mortgaged Property or in any
loan made on the security thereof, and whose
compensation is not affected by the approval
or disapproval of the Mortgage Loan; such
appraisal is in a form acceptable to FNMA and
FHLMC.
(33) None of the Mortgage Loans is a graduated
payment mortgage loan or a growing equity
mortgage loan, and no Mortgage Loan is
subject to a buydown or similar arrangement.
(34) The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage
loans in the Seller's portfolio at the
Closing Date as to which the representations
and warranties made as to the Mortgage Loans
set forth in this Section 2.03(a)(vi) can be
made.
(35) The Mortgage Loans, individually and in the
aggregate, conform in all material respects
to the descriptions thereof in the Prospectus
Supplement.
(36) None of the Mortgage Loans are second
mortgage loans.
(37) Each Mortgage Loan represents a "qualified
mortgage" within the meaning of Section
860G(a)(3) of the Code (but without regard to
the rule in Treasury Regulation Section
1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any
substantially similar successor provision)
and applicable Treasury regulations
promulgated thereunder.
- 58 -
(b) [Reserved]
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 2.03(a) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties and to the Seller. Pursuant to the Sale Agreement, the Seller shall
within 90 days of the earlier of the discovery by or receipt of written notice
by the Seller from any party of a breach of any representation or warranty set
forth herein made that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, shall, (i) if such 90-
day period expires prior to the second anniversary of the Closing Date, remove
such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided, however, that any such substitution pursuant
to (i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit M and shall not be affected unless it is
within two years of the Startup Date. The Seller shall promptly reimburse the
Trustee for any expenses reasonably incurred by the Trustee in respect of
enforcing the remedies for such breach. To enable the Subservicer to amend the
Mortgage Loan Schedule, unless it cures such breach in a timely fashion pursuant
to this Section 2.03, the Seller shall promptly notify the Subservicer whether
the Seller intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties
described in this Section that are made to the best of the Seller's knowledge,
if it is discovered by any of the Seller, the Subservicer, the Master Servicer
or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the related Mortgage Note, Mortgage and assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Scheduled Payments due with respect to Replacement Mortgage Loans in
the Due Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller on such Distribution Date. For the month of substitution, distributions
to Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Trustee shall amend the Mortgage Loan Schedule for the benefit of
- 59 -
the Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Replacement Mortgage Loan or Loans. Upon such
substitution, the Replacement Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Seller shall be deemed to have
made with respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(a)
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Collection Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph, the
Trustee shall release to the Seller the Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of the Certificateholders and shall
execute and deliver at the Seller's direction such instruments of transfer or
assignment as have been prepared by the Seller, in each case without recourse,
as shall be necessary to vest in the Seller, or its respective designee, title
to the Trustee's interest in any Deleted Mortgage Loan substituted for pursuant
to this Section 2.03.
For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance (after application of the
principal portion of the Scheduled Payment due in the month of substitution) of
all such Deleted Mortgage Loans. An amount equal to the aggregate of the
deficiencies described in the preceding sentence (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Collection Account by the Seller
on the Determination Date for the Distribution Date relating to the Prepayment
Period during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Collection Account
pursuant to Section 3.08 on the Determination Date for the Distribution Date in
the month following the month during which the Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if any,
and the receipt of a Request for Release in the form of Exhibit M hereto, the
Trustee shall release the related Mortgage File held for the benefit of the
Certificateholders to the Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to the Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Depositor respecting such breach available to
Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
- 60 -
SECTION 2.04. Representations and Warranties of the
Subservicer.
The Subservicer hereby represents and warrants to the
Depositor, the Master Servicer and the Trustee as follows, as of the date
hereof:
(i) The Subservicer is a duly organized
corporation and is validly existing and in good standing under the
laws of the state of its incorporation and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by the Subservicer in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Subservicer has the full corporate
power and authority to service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Subservicer the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Subservicer, enforceable against the
Subservicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this
Agreement by the Subservicer, the servicing of the Mortgage Loans by
the Subservicer under this Agreement, the consummation of any other of
the transactions contemplated by this Agreement, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Subservicer and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the
Subservicer or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to
which the Subservicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Subservicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Subservicer; and the Subservicer is not in breach or violation of
any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
- 61 -
jurisdiction over it which breach or violation may materially impair
the Subservicer's ability to perform or meet any of its obligations
under this Agreement.
(iv) The Subservicer is an approved Subservicer
of conventional mortgage loans for FNMA or FHLMC.
(v) No litigation is pending or, to the best of
the Subservicer's knowledge, threatened, against the Subservicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Subservicer to
service the Mortgage Loans or to perform any of its other obligations
under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Subservicer of, or
compliance by the Subservicer with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Subservicer has
obtained the same.
(vii) The Subservicer's computer and other
systems used in servicing the Mortgage Loans currently are capable of
operating in a manner so that on and after January 1, 2000 (A) the
Subservicer can service the Mortgage Loans in accordance with the
terms of this Agreement and (B) the Subservicer can operate its
business in the same manner as it is operating on the date hereof.
SECTION 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which default
is not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Person making such repurchase or substitution delivers
to the Trustee an Opinion of Counsel, addressed to the Trustee, to the effect
that such repurchase or substitution would not (i) result in the imposition of
the tax on "prohibited transactions" of the Trust Fund or contributions after
the "startup date", as defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such loan and (b) receipt by the Trustee of an
Opinion of Counsel to the effect that such repurchase or substitution, as
applicable, will not result in the events described in clause (i) or clause (ii)
of the preceding sentence.
- 62 -
(b) Upon discovery by the Depositor, the Subservicer, the
Master Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within 5 Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Depositor, at the
Depositor's option, to either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan
for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
within 90 days of such discovery in the same manner as it would a Mortgage Loan
for a breach of representation or warranty contained in Section 2.03. The
Trustee shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has caused
to be authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, Certificates duly authenticated by the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
SECTION 2.07. REMIC Election.
(a) The Depositor hereby instructs and authorizes the Trustee
to make an appropriate election to treat each of the Master REMIC and the
Subsidiary REMIC as a REMIC. This Agreement shall be construed so as to carry
out the intention of the parties that the Master REMIC and the Subsidiary REMIC
each be treated as a REMIC at all times prior to the date on which the Trust
Fund is terminated.
(b) The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Date" for purposes of the REMIC Provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar year.
The Subsidiary REMIC will consist of all of the assets of the
Trust Fund (other than the uncertificated interests issued by such REMIC, the
Capitalized Interest Account and, prior to the Distribution Date in the month
immediately following the end of the Funding Period or any earlier Subsequent
Transfer Date on which the entire balance of the Pre-Funding Account is applied
to purchase Subsequent Mortgage Loans, the Pre-Funding Account). The Subsidiary
REMIC will issue
- 63 -
two interests, Subsidiary REMIC Interest I and Subsidiary REMIC Interest II,
that shall be designated as regular interests of such REMIC and shall issue the
SR Interest that shall be designated as the sole class of residual interest in
the Subsidiary REMIC.
Subsidiary REMIC Interest I shall have an initial principal
balance equal to the principal balance of the Group I Mortgage Loans, plus the
Pre-Funded Amount allocable to Loan Group I, in each case as of the Cut-off
Date, an interest rate equal to the weighted average Mortgage Rate of the Group
I Mortgage Loans (net of the Servicing Fee Rate and Master Servicer Fee Rate),
and pay on each Distribution Date. All Realized Losses from the Group I Mortgage
Loans shall be allocated to Subsidiary Interest I and all payments of principal
and interest (net of fees and expenses) received from the Group I Mortgage Loans
shall be paid to Subsidiary REMIC Interest I in payment of accrued interest and
principal until the principal balance of such interest is reduced to zero and
any losses allocated to such interest have been reimbursed. Any excess funds
shall first be applied to reimburse prior losses on the Group II Mortgage Loans
and then distributed to the SR Interest.
Subsidiary REMIC Interest II shall have an initial principal
balance equal to the principal balance of the Group II Mortgage Loans, plus the
Pre-Funded Amount allocable to Loan Group II, in each case as of the Cut-off
Date, an interest rate equal to the weighted average Mortgage Rate (net of the
Servicing Fee Rate and the Master Servicer Fee Rate) of the Group II Mortgage
Loans, and pay on each Distribution Date. All Realized Losses from the Group II
Mortgage Loans shall be allocated to Subsidiary REMIC Interest II and all
payments of principal and interest (net of fees and expenses) received from the
Group II Mortgage Loans shall be paid to Subsidiary REMIC Interest II in payment
of accrued interest and principal until the principal balance of such interest
is reduced to zero and any losses allocated to such interest have been
reimbursed. Any excess funds shall first be applied to reimburse prior losses on
the Group I Mortgage Loans and then distributed to the SR Interest.
The SR Interest shall have no principal balance and shall not
bear interest.
The assets of the Master REMIC shall be Subsidiary REMIC
Interest I and Subsidiary REMIC Interest II. Each Class of Group I Certificates
and each Class of Group II Certificates shall be designated as regular interests
in such REMIC and the MR Interest shall be designated as the sole class of
residual interests in the Master REMIC.
The beneficial ownership of the SR Interest and the MR
Interest shall be represented by the Class R Certificate.
(c) The "tax matters person" with respect to each REMIC for
purposes of the REMIC provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of a Class R Certificate, by its
acceptance thereof, irrevocably appoints the Master Servicer as
- 64 -
its agent and attorney-in-fact to act as "tax matters person" with respect to
each REMIC for purposes of the REMIC provisions.
SECTION 2.08. Covenants of the Subservicer.
The Subservicer hereby covenants to the Depositor, the Master
Servicer and the Trustee as follows:
(a) the Subservicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, the
Master Servicer or the Trustee, any affiliate of the Depositor, the Master
Servicer or the Trustee and prepared by the Subservicer pursuant to this
Agreement will be inaccurate in any material respect.
SECTION 2.09. Representations of the Master Servicer.
The Master Servicer represents and warrants to, and covenants with,
the Trustee for the benefit of the Certificateholders that as of the Closing
Date:
(a) The Master Servicer is a corporation duly chartered and
validly existing in good standing under the laws of the State of New Jersey;
(b) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this Agreement
will not violate the Master Servicer's corporate charter or by-laws or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer is a party
or which may be applicable to the Master Servicer or any of its assets;
(c) This Agreement, assuming due authorization, execution and
delivery by the Trustee, the Subservicer and the Depositor, constitutes a valid,
legal and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and the rights of insured depository institutions
specifically and to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;
- 65 -
(d) The Master Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of the Master Servicer or its properties or might have consequences
that would affect its performance hereunder; and
(e) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations under
this Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.09 shall survive the issuance and
delivery of the Certificates and shall be continuing as long as any Certificate
shall be outstanding or this Agreement has been terminated.
SECTION 2.10. Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b)
below, in consideration of the remittance on each Subsequent Transfer Date to or
upon the order of the Depositor of all or a portion of the balance of funds in
the Pre-Funding Account, which constitute the purchase price for the related
Subsequent Mortgage Loans, as described in the next paragraph, the Depositor
shall on such Subsequent Transfer Date sell, transfer, assign, set over and
convey without recourse all of the right, title and interest of the Depositor in
and to (i) the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule attached to the related Subsequent Transfer Instrument delivered by the
Depositor on such Subsequent Transfer Date, including all interest and principal
received on or with respect to the Subsequent Mortgage Loans so assigned and the
Depositor shall deliver to, and deposit with, the Trustee all items with respect
to such Subsequent Mortgage Loans to be delivered pursuant to Section 2.01;
provided, however, that the Depositor reserves and retains all right, title and
interest in and to principal received and interest accruing on the Subsequent
Mortgage Loans prior to the related Subsequent Cut-off Date. The transfer to the
Trustee for deposit in the Mortgage Pool by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale of the Subsequent
Mortgage Loans by the Depositor to the Trust Fund. The related Mortgage File for
each Subsequent Mortgage Loan shall be delivered to the Trustee or to the
Custodian (as the duly appointed agent of the Trustee) on or before the related
Subsequent Transfer Date.
The purchase price paid by the Trustee for the Subsequent
Mortgage Loans on each Subsequent Transfer Date shall be one-hundred percent
(100%) of the aggregate Stated Principal Balance of the Subsequent Mortgage
Loans so transferred (as identified on the Mortgage Loan Schedule provided by
the Depositor). On each Subsequent Transfer Date, the aggregate purchase price
for all Subsequent Mortgage Loans purchased on such date shall be withdrawn by
the Paying
- 66 -
Agent from the Pre-Funding Account and paid to the Depositor. Thereafter, the
portion of the Pre-Funding Amount allocable to either Loan Group will equal the
Original Pre-Funded Amount allocable to such Loan Group reduced by the purchase
price paid for fixed rate Subsequent Mortgage Loans (with respect to the
Pre-Funding Amount allocated to Group I) or the purchase price paid for
adjustable rate Subsequent Mortgage Loans (with respect to the Pre-Funding
Amount allocated to Group II). This Agreement shall constitute a fixed-price
purchase contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for deposit in
the Mortgage Pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Paying Agent
shall release funds from the Pre-Funding Account, only upon the satisfaction of
each of the following conditions on or prior to the related Subsequent Transfer
Date:
(i) the Depositor shall have provided the Trustee, the Paying
Agent and the Subservicer with a timely Addition Notice;
(ii) the Depositor shall have delivered to the Trustee (with a
copy to the Paying Agent) a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing the
Subsequent Mortgage Loans, and the Depositor shall have delivered a
computer file containing such Mortgage Loan Schedule to the Paying
Agent, the Trustee and the Subservicer at least three Business Days
prior to the related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form of Exhibit N, the Depositor shall not be insolvent nor shall it
have been rendered insolvent by such transfer nor shall it be aware of
any pending insolvency;
(iv) the Funding Period shall not have terminated;
(v) the Depositor shall have delivered to the Trustee (with a
copy to the Paying Agent) a Subsequent Transfer Instrument confirming
the satisfaction of the conditions precedent specified in this Section
2.10 and, pursuant to the Subsequent Transfer Instrument, assigned to
the Trustee without recourse for the benefit of the Certificateholders
all the right, title and interest of the Depositor, in, to and under
the Subsequent Mortgage Loan Purchase Agreement, to the extent of the
Subsequent Mortgage Loans;
(vi) the Depositor shall have delivered to the Trustee a
letter (with copies provided to each Rating Agency), which the Trustee
may rely on, including for purposes of paragraph (c) and (d) stating
that the characteristics of the Subsequent Mortgage Loans
substantially conform to the characteristics set forth in paragraphs
(c) and (d) below and that such Subsequent
- 67 -
Mortgage Loans were not selected in a manner that the Depositor
believes to be adverse to Certificateholders;
(vii) the Depositor shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agencies
with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinion of Counsel delivered to the
Trustee on the Closing Date regarding the true sale of the Subsequent
Mortgage Loans; and
(viii) the Trustee shall have delivered to the Depositor an
Opinion of Counsel addressed to the Depositor and the Rating Agencies
with respect to the Subsequent Transfer Instrument substantially in
the form of the Opinion of Counsel delivered to the Depositor on the
Closing Date regarding certain corporate matters relating to the
Trustee.
(c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the Subsequent Cut-off Date: (i) the Subsequent
Mortgage Loan may not be 30 or more days delinquent as of the related Subsequent
Cut-off Date (except with respect to 1.5% of the Subsequent Mortgage Loans, by
aggregate principal balance as of the related Subsequent Cut-off Date, which may
be 30 or more days delinquent but less than 60 days delinquent as of the related
Subsequent Cut-off Date); (ii) the stated term to maturity of the Subsequent
Mortgage Loan will not be less than 120 months and will not exceed 360 months;
(iii) the Subsequent Mortgage Loan may not provide for negative amortization;
(iv) the Subsequent Mortgage Loan will not have a Loan-to-Value Ratio greater
than 95.0%; (v) the Subsequent Mortgage Loans will have as of the Subsequent
Cut-off Date, a weighted average term since origination not in excess of 6
months; (vi) the Subsequent Mortgage Loan must have a first Monthly Payment due
on or before October 1, 1999; and (vii) the Subsequent Mortgage Loan will be
underwritten in accordance with the criteria set forth under the section "Chase
Manhattan Mortgage Corporation--Underwriting Standards" in the Prospectus
Supplement.
(d) Following the purchase of the Subsequent Mortgage Loans by
the Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans)
will, as of the Subsequent Cut-off Date not be materially inconsistent with the
Initial Mortgage Loans.
(e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by either Rating Agency if the inclusion of any such
Subsequent Mortgage Loan would adversely affect the ratings of any Class of
Certificates.
- 68 -
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Subservicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Subservicer
shall service and administer the Mortgage Loans in accordance with Accepted
Servicing Practices. In connection with such servicing and administration, the
Subservicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.02 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that the Subservicer shall take no
action that is inconsistent with or prejudices the interests of the Trust Fund
or the Certificateholders in any Mortgage Loan or the rights and interests of
the Depositor, the Master Servicer and the Trustee under this Agreement. The
Subservicer shall represent and protect the interest of the Trust Fund in the
same manner as it currently protects its own interest in mortgage loans in its
own portfolio in any claim, proceeding or litigation regarding a Mortgage Loan
and shall not make or permit any modification, waiver or amendment of any term
of any Mortgage Loan which would cause the Trust Fund to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860G(a) or 860G(d) of
the Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Subservicer, in its own name or in the name of
the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Subservicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Subservicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by any or all
of them as are necessary or appropriate to enable the Subservicer to service and
administer the Mortgage Loans, including without limitation, any powers of
attorney. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Subservicer.
In accordance with the standards of the preceding paragraph,
the Subservicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes
- 69 -
and assessments on the Mortgaged Properties, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.06, and further as provided in Section 3.08. All costs
incurred by the Subservicer, if any, in effecting the timely payments of taxes
and assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
The Subservicer shall deliver a list of Servicing Officers to
the Trustee and the Master Servicer by the Closing Date.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicer.
(a) The Subservicer may arrange for the subservicing of any
Mortgage Loan by a subservicer, which may be an affiliate (each, a
"subservicer") pursuant to a subservicing agreement (each, a "Subservicing
Agreement"); provided, however, that such subservicing arrangement and the terms
of the related subservicing agreement must provide for the servicing of such
Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Subservicer and a subservicer or reference to actions
taken through a subservicer or otherwise, the Subservicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the subservicer and to the same extent and under the same
terms and conditions as if the Subservicer alone were servicing and
administering the Mortgage Loans. Every subservicing agreement entered into by
the Subservicer shall contain a provision giving the successor Subservicer the
option to terminate such agreement in the event a successor Subservicer is
appointed. All actions of each subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Subservicer with
the same force and effect as if performed directly by the Subservicer.
(b) For purposes of this Agreement, the Subservicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Subservicer.
- 70 -
SECTION 3.03. Rights of the Depositor, the Master Servicer and
the Trustee in Respect of the Subservicer.
Neither the Trustee, the Master Servicer nor the Depositor
shall have any responsibility or liability for any action or failure to act by
the Subservicer, and none of them is obligated to supervise the performance of
the Subservicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Subservicer.
In the event that the Subservicer shall for any reason no
longer be the Subservicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Subservicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Subservicer pursuant to
Section 3.10 hereof or any acts or omissions of the predecessor Subservicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for expenses of the Subservicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.03 or the first paragraph of Section 6.02 hereof). If the
Subservicer shall for any reason no longer be the Subservicer (including by
reason of any Event of Default), the Trustee (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Subservicer
under any subservicing agreement in accordance with the terms thereof; provided,
however, that the Trustee (or any other successor servicer) shall not incur any
liability or have any obligations in its capacity as servicer under a
subservicing agreement arising prior to the date of such succession unless it
expressly elects to succeed to the rights and obligations of the Subservicer
thereunder; and the Subservicer shall not thereby be relieved of any liability
or obligations under the subservicing agreement arising prior to the date of
such succession.
The Subservicer shall, upon request of the Trustee, but at the
expense of the Subservicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced and otherwise use its best efforts to effect the orderly and
efficient transfer of the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection
Account; Certificate Account; Distribution
Account.
(a) The Subservicer shall make reasonable efforts in
accordance with Accepted Servicing Practices to collect all payments called for
under the terms and provisions of the Mortgage Loans to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Required Insurance Policy. Consistent with the foregoing, the
Subservicer may in its discretion (i) waive any late payment charge or any
prepayment charge or penalty interest in connection with the prepayment of a
Mortgage Loan (provided that the Subservicer shall not waive any
- 71 -
prepayment charge or penalty interest in connection with the prepayment of a
Mortgage Loan without the prior written consent of the Master Servicer;
provided, further, that if the Master Servicer does not respond within 3
Business Days after notice from the Subservicer, the Master Servicer shall be
deemed to have consented to any action taken by the Subservicer with respect to
such prepayment charges or penalty interest) and (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than 270 days. In the
event of any such arrangement, the Subservicer shall make Advances on the
related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Subservicer shall not be required to institute
or join in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(b) The Subservicer shall establish and initially maintain, on
behalf of the Certificateholders, the Collection Account. The Subservicer shall
deposit into the Collection Account daily, within two Business Days of receipt
thereof, in immediately available funds, the following payments and collections
received or made by it on and after the Cut-Off Date with respect to the Initial
Mortgage Loans, or Subsequent Cut-off Date with respect to the Subsequent
Mortgage Loans (to the extent not applied in computing the Cut-off Date
Principal Balance or Subsequent Cut-off Date Principal Balance, as applicable,
thereof):
(i) all payments on account of principal,
including Principal Prepayments, on the Mortgage Loans, other
than principal due on the Mortgage Loans on or prior to the
Cut-off Date (in the case of the Initial Mortgage Loans) or
the Subsequent Cut-off Date (in the case of the Subsequent
Mortgage Loans);
(ii) all payments on account of interest on the
Mortgage Loans net of the related Servicing Fee permitted
under Section 3.15, other than interest due on the Mortgage
Loans on or prior to the Cut-off Date (in the case of the
Initial Mortgage Loans) or the Subsequent Cut-off Date (in the
case of the Subsequent Mortgage Loans).
(iii) all Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance
with the Subservicer's normal servicing procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the
Subservicer pursuant to Section 3.05(e) in connection with any
losses on Permitted Investments;
- 72 -
(vi) any amounts required to be deposited by the
Subservicer pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution
Adjustment Amount;
(viii) all Advances made by the Subservicer
pursuant to Section 4.01; and
(ix) any other amounts required to be deposited
hereunder.
The foregoing requirements for remittance by the Subservicer
into the Collection Account shall be exclusive, it being understood and agreed
that, without limiting the generality of the foregoing, payments in the nature
of prepayment penalties, late payment charges or assumption fees, if collected,
need not be remitted by the Subservicer. In the event that the Subservicer shall
remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the Trustee, or such other institution maintaining the Collection
Account, to withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the Trustee, or such other
institution maintaining the Collection Account, that describes the amounts
deposited in error in the Collection Account. The Subservicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Subservicer.
(c) The Master Servicer shall establish and maintain, on
behalf of the Certificateholders, the Certificate Account. The Master Servicer
shall, promptly upon receipt, deposit in the Certificate Account and retain
therein the following:
(i) the aggregate amount withdrawn from the
Collection Account and required to be deposited into the
Certificate Account pursuant to the second paragraph of
Section 3.08(a); and
(ii) any amount required to be deposited by the
Master Servicer pursuant to Section 3.05(e) in connection with
any losses on Permitted Investments.
Any amounts received by the Master Servicer prior to 3:00 p.m.
New York City Time (or such earlier deadline for investment in the Permitted
Investments designated by the Master Servicer) which are required to be
deposited in the Certificate Account pursuant to Section 3.08(a) shall be
invested in Permitted Investments on the Business Day on which they were
received. The foregoing requirements for deposit by the Master Servicer into the
Certificate Account shall be exclusive. In the
- 73 -
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw such amount from the Certificate Account,
any provision herein to the contrary notwithstanding. All funds deposited in the
Certificate Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Certificate Account at the direction of the
Master Servicer.
(d) The Master Servicer shall establish and maintain, on
behalf of the Certificateholders, the Distribution Account. The Master Servicer
shall, promptly upon receipt, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount withdrawn by the
Master Servicer pursuant to the second paragraph of Section
3.08(b);
(ii) any amount required to be deposited by the
Master Servicer pursuant to Section 3.05(e) in connection with
any losses on Permitted Investments;
(iii) the aggregate amount withdrawn by the
Master Servicer pursuant to Section 4.06(c); and
(iv) the aggregate amount withdrawn by the
Master Servicer pursuant to Section 4.07.
The foregoing requirements for remittance by the Master
Servicer and deposit by the Master Servicer into the Distribution Account shall
be exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. All
funds deposited in the Distribution Account shall be held by the Trustee in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.08. In no event shall the
Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Master Servicer.
(e) Each institution that maintains the Collection Account,
the Certificate Account or the Distribution Account may invest the funds in each
such account, as directed by the Subservicer with respect to the Collection
Account and as directed by the Master Servicer with respect to the Certificate
Account and the Distribution Account, in Permitted Investments, which shall
mature not later than (i) in the case of the Collection Account, the Business
Day preceding the related Servicer Remittance Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Collection Account or is otherwise immediately available, then such Permitted
Investment shall mature not later than such Servicer Remittance Date), (ii) in
the case of the Certificate
- 74 -
Account, the second preceding Business Day preceding the Distribution Date that
follows the date of such investment (except that if such Permitted Investment is
an obligation of the institution that maintains such Certificate Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than the Business Day immediately preceding such Distribution Date) and,
in each case, shall not be sold or disposed of prior to its maturity and (iii)
in the case of the Distribution Account, the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains such Distribution Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than such Distribution Date)
and, in each case, shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from amounts on deposit in the Collection Account shall be for the
benefit of the Subservicer as servicing compensation and shall be remitted to it
monthly as provided herein. The amount of any losses incurred in the Collection
Account in respect of any such investments shall be deposited by the Subservicer
in the Collection Account out of the Subservicer's own funds immediately as
realized. All income and gain net of any losses realized from amounts on deposit
in the Certificate Account and the Distribution Account shall be for the benefit
of the Master Servicer as compensation and shall be remitted to it monthly as
provided herein. The amount of any losses incurred in the Certificate Account
and the Distribution Account in respect of any such investments shall be
deposited by the Master Servicer, or the Trustee upon receipt from the Master
Servicer, in the Certificate Account or the Distribution Account out of the
Master Servicer's own funds immediately as realized. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or lack
of investment of funds held in the Collection Account, the Certificate Account
or the Distribution Account and made in accordance with this Section 3.05.
(f) The party maintaining the Collection Account, the
Certificate Account or the Distribution Account, as the case may be, shall give
at least 30 days advance notice to each of the other parties to this Agreement
and each Rating Agency of any proposed change of the location of the Collection
Account, the Certificate Account or the Distribution Account prior to any change
thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
To the extent required by the related Mortgage Note, the
Subservicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Subservicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Subservicer to compel a Mortgagor to establish
an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD
- 75 -
association dues, or comparable items, to reimburse the Subservicer out of
related collections for any payments made pursuant to Sections 3.01 hereof (with
respect to taxes and assessments and insurance premiums) and 3.10 hereof (with
respect to hazard insurance), to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required by law or the terms of
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Subservicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Subservicer
designated by it.
Upon reasonable advance notice in writing if required by
federal regulation, the Subservicer will provide to each Certificateholder that
is a savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Subservicer shall be entitled
to be reimbursed by each such Certificateholder for actual expenses incurred by
the Subservicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Collection
Account, Certificate Account and Distribution
Account.
(a) The Subservicer (or the Depositor in the case of clauses
(vi) and (vii) below) may from time to time, make withdrawals from the
Collection Account for the following purposes:
(i) to pay to the Subservicer (to the extent
not previously paid to or withheld by the Subservicer), as
servicing compensation in accordance with Section 3.15, that
portion of any payment of interest that equals the Servicing
Fee for the period with respect to which such interest payment
was made, and, as additional servicing compensation, those
other amounts set forth in Section 3.15;
(ii) to reimburse the Subservicer for Advances
made by it with respect to the Mortgage Loans, such right of
reimbursement pursuant to this subclause (ii) being limited to
amounts received on particular Mortgage Loan(s) (including,
for this purpose, Liquidation Proceeds) that represent late
recoveries of payments of principal
- 76 -
and/or interest on such particular Mortgage Loan(s) in respect
of which any such Advance was made;
(iii) to reimburse the Subservicer for any
Non-Recoverable Advance previously made and any
Non-Recoverable Servicing Advance;
(iv) to reimburse the Subservicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance
Policy;
(v) to pay the Subservicer any unpaid Servicing
Fees and to reimburse it for any unreimbursed Servicing
Advances, the Subservicer's right to reimbursement of
Servicing Advances pursuant to this subclause (v) with respect
to any Mortgage Loan being limited to amounts received on
particular Mortgage Loan(s)(including, for this purpose,
Liquidation Proceeds and purchase and repurchase proceeds)
that represent late recoveries of the payments for which such
advances were made pursuant to Section 3.01 or Section 3.06;
(vi) to pay to the Depositor or the Master
Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related
Stated Principal Balance of such repurchased Mortgage Loan;
(vii) to reimburse the Subservicer, the Master
Servicer or the Depositor for expenses incurred by any of them
in connection with the Mortgage Loans or Certificates and
reimbursable pursuant to Section 6.03 hereof;
(viii) to withdraw pursuant to Section 3.05 any
amount deposited in the Collection Account and not required to
be deposited therein; and
(ix) to clear and terminate the Collection
Account upon termination of this Agreement pursuant to Section
9.01 hereof.
In addition, no later than 12:00 noon Pacific Standard Time on
the Servicer Remittance Date (or such earlier time on the Servicer Remittance
Date as the Master Servicer requires as specified in writing not later than two
Business Days prior to such Servicer Remittance Date, such earlier time
requirement being due to the operations of the Master Servicer's designated
Permitted Investment closing early on such Servicer Remittance Date), the
Subservicer shall cause to be withdrawn from the Collection Account the Group I
Interest Funds (other than amounts specified in item (v) of such definition),
the Group I Principal Funds (other than amounts specified in item (vi) of such
definition), the Group II Interest Funds (other than amounts specified in item
(v) of such definition), the Group II
- 77 -
Principal Funds (other than amounts specified in item (vi) of such definition)
and the Master Servicer Fee, to the extent on deposit, and such amount shall be
deposited in the Certificate Account.
The Subservicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account.
(b) The Master Servicer may, from time to time, make
withdrawals from the Certificate Account for the following purposes:
(i) to pay the Master Servicer the Master
Servicer Fee;
(ii) to pay to the Master Servicer, as
additional compensation, earnings on or investment income with
respect to funds in or credited to the Certificate Account;
(iii) to withdraw pursuant to Section 3.05 any
amount deposited in the Certificate Account and not required
to be deposited therein; and
(iv) to clear and terminate the Certificate
Account upon termination of the Agreement pursuant to Section
9.01 hereof.
In addition, no later than the Business Day preceding the
Distribution Date, the Master Servicer shall cause to be withdrawn from the
Certificate Account the Group I Interest Funds, the Group I Principal Funds, the
Group II Interest Funds and the Group II Principal Funds, to the extent on
deposit, and such amount shall be deposited in the Distribution Account.
(c) The Master Servicer shall withdraw funds from the
Distribution Account for distribution to the Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn, the
amount of any taxes that it is authorized to retain pursuant to the last
paragraph of Section 8.11). In addition, the Master Servicer may from time to
time make withdrawals from the Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as
additional compensation, earnings on or investment income with
respect to funds in or credited to the Distribution Account,
as well as any amounts in respect of prepayment penalties or
late payment charges, to the extent not previously remitted to
the Master Servicer by the Subservicer in accordance with
Section 3.15;
(ii) to withdraw pursuant to Section 3.05 any
amount deposited in the Distribution Account and not required
to be deposited therein; and
- 78 -
(iii) to clear and terminate the Distribution
Account upon termination of the Agreement pursuant to Section
9.01 hereof.
SECTION 3.09. [Reserved.]
SECTION 3.10. Maintenance of Hazard Insurance.
The Subservicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the replacement value of the improvements that
are part of such Mortgaged Property and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Subservicer shall also cause flood insurance to
be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Subservicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Subservicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the
Subservicer in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Subservicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Subservicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the lesser of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of such Mortgaged Property,
or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.
In the event that the Subservicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3.10, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the
- 79 -
Subservicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property a policy complying with the first sentence of this
Section 3.10, and there shall have been a loss that would have been covered by
such policy, deposit in the Collection Account the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as servicer of the Mortgage Loans, the Subservicer agrees to
present, on behalf of itself, the Depositor, the Master Servicer and the Trustee
for the benefit of the Certificateholders, claims under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Subservicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Subservicer is not required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Subservicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Subservicer is authorized, subject to Section 3.11(b),
to take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Subservicer
enters such agreement) by the applicable Required Insurance Policies. The
Subservicer, subject to Section 3.11(b), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Subservicer shall not be deemed to be in default under this
Section 3.11(a) by reason of any transfer or assumption that the Subservicer
reasonably believes it is restricted by law from preventing.
(b) Subject to the Subservicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the
Subservicer shall prepare and deliver or cause to be prepared
- 80 -
and delivered to the Trustee for signature and shall direct, in writing, the
Trustee to execute the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note (including, but not limited
to, the Mortgage Rate, the amount of the Scheduled Payment, the Maximum Rate,
the Minimum Rate, the Gross Margin, the Periodic Rate Cap, the Adjustment Date
and any other term affecting the amount or timing of payment on the Mortgage
Loan) may be changed. The Subservicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Subservicer as additional servicing
compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds; Repurchase of
Certain Mortgage Loans.
(a) The Subservicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Subservicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided,
however, that the Subservicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account pursuant to Section 3.08
hereof). The Subservicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Subservicer has knowledge that a Mortgaged Property that the Subservicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Subservicer, the Subservicer will, prior to acquiring
the Mortgaged Property, consider such risks and only take action in accordance
with Accepted Servicing Practices.
- 81 -
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Subservicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Subservicer shall either itself or through an agent
selected by the Subservicer protect and conserve such REO Property in the same
manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Subservicer deems to be in the best interest of the Subservicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Subservicer shall prepare for and deliver to the Master Servicer a statement
with respect to each REO Property that has been rented showing the aggregate
rental income received and all expenses incurred in connection with the
management and maintenance of such REO Property at such times as is necessary to
enable the Master Servicer to comply with the reporting requirements of the
REMIC Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the Collection Account no later than the close of business
on each Determination Date. The Subservicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Subservicer shall dispose of such Mortgaged
Property prior to the expiration of three years from the end of the year of its
acquisition by the Trust Fund or, at the expense of the Trust Fund, request more
than 60 days prior to the day on which such three-year period would otherwise
expire, an extension of the three-year grace period unless the Trustee shall
have been supplied with an Opinion of Counsel (such Opinion not to be an expense
of the Trustee) to the effect that the holding by the Trust Fund of such
Mortgaged Property subsequent to such three-year period will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined in
section 860F of the Code or cause the Trust Fund to fail to qualify as a REMIC
at any time that any Certificates are outstanding, in which case the Trust Fund
may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Subservicer, the Master Servicer or
the Depositor has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
- 82 -
The decision of the Subservicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Subservicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Subservicer for expenses incurred (including any property
or other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Advances, Servicing Advances and any management fee paid or to
be paid with respect to the management of such Mortgaged Property, shall be
applied to the payment of principal of, and interest on, the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Collection Account. To the extent
the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net of any payment to the Subservicer as provided above, shall be
deposited in the Collection Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Subservicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second, to
reimburse the Subservicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the
extent no Advance has been made for such amount) on the Mortgage Loan or related
REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in
which such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan.
(b) On each Determination Date, the Subservicer shall
determine the respective aggregate amounts of Excess Proceeds, if any, that
occurred in the related Prepayment Period.
(c) The Master Servicer, in its sole discretion, shall have
the right to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund any Mortgage Loan that is 91 days or more
delinquent at a price equal to the Purchase Price. The Purchase Price for any
Mortgage Loan purchased hereunder shall be delivered to the Trustee for deposit
in the Collection Account and the Trustee, upon receipt of such deposit and a
Request for Release from the Depositor in the form of Exhibit M hereto, shall
release or cause to be released to the purchaser of such Mortgage Loan the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the purchaser of such Mortgage Loan, in each case
without recourse, as shall be
- 83 -
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Subservicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Subservicer will promptly notify the
Trustee or its designee by delivering a Request for Release substantially in the
form of Exhibit M. Upon receipt of such request, the Trustee or its designee
shall promptly release the related Mortgage File to the Subservicer, and the
Trustee or its designee shall at the Subservicer's written direction execute and
deliver to the Subservicer the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage in each case provided by the Subservicer, together with the Mortgage
Note with written evidence of cancellation thereon. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account, the Certificate Account, the Distribution
Account or the related subservicing account. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit M signed by a Servicing Officer, release the Mortgage File to the
Subservicer. Subject to the further limitations set forth below, the Subservicer
shall cause the Mortgage File or documents so released to be returned to the
Trustee or its designee when the need therefor by the Subservicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the Collection Account, in which case the Trustee or its designee
shall deliver the Request for Release to the Subservicer.
Each Request for Release may be delivered to the Trustee or
its designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Subservicer and the Trustee or its designee shall mutually agree. The
Trustee or its designee shall promptly release the related Mortgage File(s)
within five (5) to seven (7) Business Days of receipt of a properly completed
Request for Release pursuant to clauses (i), (ii) or (iii) above. Receipt of a
properly completed Request for Release shall be authorization to the Trustee or
its designee to release such Mortgage Loan Files, provided the Trustee or its
designee has determined that such Request for Release has been executed, with
respect to clauses (i) or (ii) above, or approved, with respect to clause (iii)
above, by an authorized Servicing Officer of the Subservicer,
- 84 -
and so long as the Trustee or its designee complies with its duties and
obligations under the agreement. If the Trustee or its designee is unable to
release the Mortgage Files within the period previously specified, the Trustee
or its designee shall immediately notify the Subservicer indicating the reason
for such delay, but in no event shall such notification be later than five
Business Days after receipt of a Request for Release. If the Subservicer is
required to pay penalties or damages due to the Trustee or its designee's
negligent failure to release the related Mortgage File or the Trustee or its
designee's negligent failure to execute and release documents in a timely
manner, the Trustee or its designee, shall be liable for such penalties or
damages respectively caused by it.
On each day that the Subservicer remits to the Trustee or its
designee Requests for Releases pursuant to clauses (ii) or (iii) above, the
Subservicer shall also submit to the Trustee or its designee a summary of the
total amount of such Requests for Releases requested on such day by the same
method as described in such clauses (ii) and (iii) above.
If the Subservicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Subservicer shall deliver or cause to be delivered to the Trustee or its
designee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Subservicer shall cause possession of any Mortgage File or of the documents
therein that shall have been released by the Trustee or its designee to be
returned to the Custodian promptly after possession thereof shall have been
released by the Trustee or its designee unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account, and the Subservicer shall have delivered to
the Trustee or its designee a Request for Release in the form of Exhibit M or
(ii) the Mortgage File or document shall have 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 and the Subservicer shall have delivered to the Trustee
or its designee an Officer's Certificate of a Servicing Officer certifying as to
the name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
SECTION 3.14. Documents, Records and Funds in Possession of
Subservicer to be Held for the Trustee.
All Mortgage Files and funds collected or held by, or under
the control of, the Subservicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Collection Account,
shall be held by the Subservicer for and on behalf of the Trustee and shall be
and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this
- 85 -
Agreement. The Subservicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account, the Certificate Account or Distribution Account or in any Escrow
Account (as defined in Section 3.06), or any funds that otherwise are or may
become due or payable to the Trustee for the benefit of the Certificateholders,
to any claim, lien, security interest, judgment, levy, writ of attachment or
other encumbrance, or assert by legal action or otherwise any claim or right of
set off against any Mortgage File or any funds collected on, or in connection
with, a Mortgage Loan, except, however, that the Subservicer shall be entitled
to set off against and deduct from any such funds any amounts that are properly
due and payable to the Subservicer under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Subservicer
shall be entitled to retain or withdraw from the Collection Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess
Proceeds, assumption fees and other similar charges, and all income and gain net
of any losses realized from Permitted Investments in the Collection Account
shall be retained by the Subservicer to the extent not required to be deposited
in the Collection Account pursuant to Section 3.05 or 3.12(a) hereof. Prepayment
penalties and late payment charges received by the Subservicer shall be remitted
on the related Servicer Remittance Date by the Subservicer to the Master
Servicer as part of the Master Servicer's compensation in accordance with
Section 6.06. The Subservicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
SECTION 3.16. Access to Certain Documentation.
The Subservicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Subservicer designated by it.
Nothing in this Section shall limit the obligation of the Subservicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Subservicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
- 86 -
SECTION 3.17. Annual Statement as to Compliance.
The Subservicer shall deliver to the Depositor and the Trustee
on or before April 15 of each year (except that the first delivery shall occur
on March 25, 2000), an Officer's Certificate stating, as to the signer thereof,
that (i) a review of the activities of the Subservicer during the preceding
calendar year and of the performance of the Subservicer under this Agreement has
been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Subservicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof and (iii) to the best of
such officer's knowledge, each subservicer has fulfilled all its obligations
under its Subservicing Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation specifying each such default
known to such officer and the nature and status thereof. The Trustee shall
forward a copy of each such statement to each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Certificateholder's expense, provided such statement is delivered by the
Subservicer to the Trustee.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) April 15 of each year (except
that the first delivery shall occur on March 25, 2000) or (ii) within 30 days of
the issuance of the annual audited financial statements beginning with the audit
for the period ending in 1999, the Subservicer at its expense shall cause a
nationally recognized firm of independent public accountants (who may also
render other services to the Subservicer or any affiliate thereof) that is a
member of the American Institute of Certified Public Accountants to furnish a
report to the Trustee and the Depositor in compliance with the Uniform Single
Attestation Program for Mortgage Bankers. Copies of such report shall be
provided by the Trustee to any Certificateholder upon request at the
Certificateholder's expense, provided such report is delivered by the
Subservicer to the Trustee. Upon written request, the Subservicer shall provide
to the Certificateholders its publicly available annual financial statements
(or, for so long as Advanta Mortgage Corp. USA is the Subservicer hereunder, the
Subservicer's parent company's publicly available annual financial statements),
if any, promptly after they become available.
- 87 -
ARTICLE IV
DISTRIBUTIONS;
ADVANCES BY THE SUBSERVICER
SECTION 4.01. Advances.
Subject to the conditions of this Article IV, the Subservicer,
as required below, shall make an Advance and deposit such Advance in the
Collection Account. Each such Advance shall be remitted to the Collection
Account no later than 1:00 p.m. California time on the Servicer Advance Date in
immediately available funds. The Subservicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Non-Recoverable
Advance. If the Subservicer shall have determined that it has made a
Non-Recoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Non-Recoverable Advance, the Subservicer shall
deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, the Master Servicer, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination. The
Subservicer may, in its sole discretion, make an Advance with respect to the
principal portion of the final Scheduled Payment on a Balloon Loan, but the
Subservicer is under no obligation to do so; provided, however, that nothing in
this sentence shall affect the Subservicer's obligation under this Section 4.01
to Advance the interest portion of the final Scheduled Payment with respect to a
Balloon Loan as if such Balloon Loan were a fully amortizing Mortgage Loan. If a
Mortgagor does not pay its final Scheduled Payment on a Balloon Loan when due,
the Subservicer shall Advance (unless it determines in its good faith judgment
that such amounts would constitute a Non-Recoverable Advance) a full month of
interest (net of the Servicing Fee) on the Stated Principal Balance thereof each
month until its Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its
own funds, the Subservicer may (i) cause to be made an appropriate entry in its
records relating to the Collection Account that any Amount Held for Future
Distributions has been used by the Subservicer in discharge of its obligation to
make any such Advance and (ii) transfer such funds from the Collection Account
to the Certificate Account. Any funds so applied and transferred shall be
replaced by the Subservicer by deposit in the Collection Account no later than
the close of business on the Servicer Advance Date on which such funds are
required to be distributed pursuant to this Agreement. The Subservicer shall be
entitled to be reimbursed from the Collection Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trust Fund pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01.
- 88 -
SECTION 4.02. Reduction of Servicing Compensation in
Connection with Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Subservicer shall, from amounts in respect of
the Servicing Fee for such Distribution Date, deposit into the Collection
Account, as a reduction of the Servicing Fee for such Distribution Date, no
later than the Servicer Advance Date immediately preceding such Distribution
Date, an amount up to the Prepayment Interest Shortfall; provided, however, that
with respect to any Distribution Date, the Subservicer's obligation to deposit
any such amount is limited to an amount equal to the product of (i) one-twelfth
of 0.35% and (ii) the aggregate Stated Principal Balance of the Mortgage loans
with respect to such Distribution Date; and in case of such deposit, the
Subservicer shall not be entitled to any recovery or reimbursement from the
Depositor, the Master Servicer, the Trustee, the Trust Fund or the
Certificateholders. With respect to any Distribution Date, to the extent that
the Prepayment Interest Shortfall exceeds Compensating Interest (such excess, a
"Non-Supported Interest Shortfall"), such Non-Supported Interest Shortfall shall
reduce the Current Interest with respect to each Class of Group I Certificates
and Group II Certificates, pro rata based upon the amount of interest each such
Class would otherwise be entitled to receive on such Distribution Date.
SECTION 4.03. Distributions on the Subsidiary REMIC.
On each Distribution Date, amounts on deposit in the
Distribution Account shall be applied to distributions on the Subsidiary REMIC
Regular Interests, in each case in an amount sufficient to make the
distributions on the respective Corresponding Classes of Certificates on such
Distribution Date in accordance with the provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Interest Funds in the following order of priority:
(i) to each Class of Group I Class A
Certificates, the Current Interest and any Interest Carryforward
Amount with respect to such Class; provided, however, if such amount
is not sufficient to make a full distribution of the Current Interest
and any Interest Carryforward Amount with respect to all the Group I
Class A Certificates, such amount will be distributed pro rata among
each Class of the Group I Class A Certificates based on the ratio of
(x) the Current Interest and Interest Carryforward Amount for each
Class of the Group I Class A Certificates to (y) the total amount of
Current Interest and any Interest Carryforward Amount for the Group I
Class A Certificates;
- 89 -
(ii) to the Class IM-1 Certificates, the Class
IM-1 Current Interest and any Class IM-1 Interest Carryforward Amount;
(iii) to the Class IM-2 Certificates, the Class
IM-2 Current Interest and any Class IM-2 Interest Carryforward Amount;
(iv) to the Class IB Certificates, the Class IB
Current Interest and any Class IB Interest Carryforward Amount; and
(v) any remainder pursuant to Section 4.04(e)
hereof.
(b) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Interest Funds in the following order of priority:
(i) to the Class IIA-1 Certificates, the
Current Interest and any Interest Carryforward Amount with respect to
such Class;
(ii) to the Class IIM-1 Certificates, the Class
IIM-1 Current Interest and any Class IIM-1 Interest Carryforward
Amount;
(iii) to the Class IIM-2 Certificates, the Class
IIM-2 Current Interest and any Class IIM-2 Interest Carryforward
Amount;
(iv) to the Class IIB Certificates, the Class
IIB Current Interest and any Class IIB Interest Carryforward Amount;
and
(v) any remainder pursuant to Section 4.04(f)
hereof.
(c) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(a) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Group I Class A Certificates, the
Group I Class A Principal Distribution Amount to be distributed first,
to the Class IA-5 Certificates, the Class IA-5 Principal Distribution
Amount, and then the remainder sequentially to the Class IA-1, Class
IA-2, Class IA-3, Class IA-4 and Class IA-5 Certificates, until the
Certificate Principal Balances thereof have been reduced to zero;
provided, however, that, on any Distribution Date on which the Group I
Class A Certificate Principal Balance is equal to or greater than the
- 90 -
Stated Principal Balances of Group I Mortgage Loans, plus the
Pre-Funded Amount allocable to Loan Group I, the Group I Class A
Principal Distribution Amount will be distributed pro rata based upon
the Certificate Principal Balance of each such Class and not
sequentially;
(ii) to the Class IM-1 Certificates, the Class
IM-1 Principal Distribution Amount;
(iii) to the Class IM-2 Certificates, the Class
IM-2 Principal Distribution Amount;
(iv) to the Class IB Certificates, the Class IB
Principal Distribution Amount; and
(v) any remainder pursuant to Section 4.04(e)
hereof.
(d) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Class IIA-1 Certificates, the Group
II Class A Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero;
(ii) to the Class IIM-1 Certificates, the Class
IIM-1 Principal Distribution Amount;
(iii) to the Class IIM-2 Certificates, the Class
IIM-2 Principal Distribution Amount;
(iv) to the Class IIB Certificates, the Class
IIB Principal Distribution Amount; and
(v) any remainder pursuant to Section 4.04(f)
hereof.
(e) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to Section 4.04(a)(v) and (c)(v) and, to the
extent required to make the distributions set forth below in clauses (i) through
(iv) of this Section 4.04(e), Section 4.04(f)(v) hereof in the following order
of priority, and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(a)
- 91 -
and (c) above shall have been made until such remainders shall have been fully
distributed for such Distribution Date; provided, however, that no Optional
Termination Amounts for Loan Group I shall be used to make the distributions
described in clause (v) of this Section 4.04(e):
(i) for distribution as part of the Group I
Principal Distribution Amount, the Group I Extra Principal
Distribution Amount;
(ii) to the Class IM-1 Certificates, the Class
IM-1 Unpaid Realized Loss Amount;
(iii) to the Class IM-2 Certificates, the Class
IM-2 Unpaid Realized Loss Amount;
(iv) to the Class IB Certificates, the Class IB
Unpaid Realized Loss Amount;
(v) to the extent required to make the
allocations set forth below, in the following order of priority:
(A) to the Class IIA-1 Certificates,
the Class IIA-1 Current Interest and the Class IIA-1
Interest Carryforward Amount;
(B) for distribution as part of the
Group II Principal Distribution Amount, the Group II
Extra Principal Distribution Amount;
(C) to the Class IIM-1 Certificates,
the Class IIM-1 Current Interest, the Class IIM-1
Interest Carryforward Amount and the Class IIM-1
Unpaid Realized Loss Amount;
(D) to the Class IIM-2 Certificates,
the Class IIM-2 Current Interest, the Class IIM-2
Interest Carryforward Amount and the Class IIM-2
Unpaid Realized Loss Amount;
(E) to the Class IIB Certificates,
the Class IIB Current Interest, the Class IIB
Interest Carryforward Amount and the Class IIB Unpaid
Realized Loss Amount;
(vi) the remainder pursuant to Section 4.04(g)
hereof.
(f) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to
- 92 -
Section 4.04(b)(v) and (d)(v) hereof and, to the extent required to make the
distributions set forth below in clauses (i) through (iv) of this Section
4.04(f), Section 4.04(e)(v) hereof in the following order of priority, and each
such distribution shall be made only after all distributions pursuant to
Sections 4.04(b) and (d) above shall have been made until such remainders shall
have been fully distributed for such Distribution Date; provided, however, that
no Optional Termination Amounts for Loan Group II shall be used to make the
distributions described in clause (viii) of this Section 4.04(f):
(i) for distribution as part of the Group II
Principal Distribution Amount, the Group II Extra Principal
Distribution Amount;
(ii) to the Class IIM-1 Certificates, the Class
IIM-1 Unpaid Realized Loss Amount;
(iii) to the Class IIM-2 Certificates, the Class
IIM-2 Unpaid Realized Loss Amount;
(iv) to the Class IIB Certificates, the Class
IIB Unpaid Realized Loss Amount;
(v) to the extent required to make the
allocations set forth below, in the following order of priority
(provided, however, that to the extent the amounts to be allocated
pursuant to clauses (A) through (E) are insufficient to make all
payments of Current Interest and Interest Carryforward Amounts for
such Class IA Certificates, the distributions made pursuant to clauses
(A) through (E) shall be made on a pro rata basis and not
sequentially):
(A) to the Class IA-1 Certificates,
the Class IA-1 Current Interest and the Class IA-1
Interest Carryforward Amount;
(B) to the Class IA-2 Certificates,
the Class IA-2 Current Interest and the Class IA-2
Interest Carryforward Amount;
(C) to the Class IA-3 Certificates,
the Class IA-3 Current Interest and the Class IA-3
Interest Carryforward Amount;
(D) to the Class IA-4 Certificates,
the Class IA-4 Current Interest and the Class IA-4
Interest Carryforward Amount;
(E) to the Class IA-5 Certificates,
the Class IA-5 Current Interest and the Class XX-0
Xxxxxxxx Xxxxxxxxxxxx Xxxxxx;
- 00 -
(X) for distribution as part of the
Group I Principal Distribution Amount, the Group I
Extra Principal Distribution Amount;
(G) to the Class IM-1 Certificates,
the Class IM-1 Current Interest, the Class IM-1
Interest Carryforward Amount and the Class IM-1
Unpaid Realized Loss Amount;
(H) to the Class IM-2 Certificates,
the Class IM-2 Current Interest, the Class IM-2
Interest Carryforward Amount and the Class IM-2
Unpaid Realized Loss Amount;
(I) to the Class IB Certificates, the
Class IB Current Interest, the Class IB Interest
Carryforward Amount and the Class IB Unpaid Realized
Loss Amount;
(vi) to the (i) Class IIA-1 Certificates, the
Interest Carryover Amount for the Class IIA-1 Certificates, (ii) Class
IIM-1 Certificates, the Class IIM-1 Certificate Interest Carryover
Amount, (iii) Class IIM-2 Certificates, the Class IIM-2 Certificate
Interest Carryover Amount, and (iv) Class IIB Certificates, the Class
IIB Certificate Interest Carryover Amount, on a pro rata basis; and
(vii) the remainder pursuant to Section 4.04(g)
hereof.
(g) On each Distribution Date, the Paying Agent shall allocate
the remainders pursuant to Section 4.04(e)(ix) and (f)(x) hereof, to the Class R
Certificates, in respect of the Residual Interest, any remaining funds, and such
distribution shall be made only after all preceding distributions shall have
been made until such remainders shall have been fully distributed.
(h) On each Distribution Date, the Paying Agent shall allocate
the Applied Realized Loss Amount for the Group I Certificates to reduce the
Certificate Principal Balances of the Group I Subordinated Certificates in the
following order of priority:
(i) to the Class IB Certificates until the
Class IB Certificate Principal Balance is reduced to zero;
(ii) to the Class IM-2 Certificates until the
Class IM-2 Certificate Principal Balance is reduced to zero; and
(iii) to the Class IM-1 Certificates until the
Class IM-1 Certificate Principal Balance is reduced to zero.
- 94 -
(i) On each Distribution Date, the Paying Agent shall allocate
the Applied Realized Loss Amount for the Group II Certificates to reduce the
Certificate Principal Balances of the Group II Subordinated Certificates in the
following order of priority:
(i) to the Class IIB Certificates until the
Class IIB Certificate Principal Balance is reduced to zero;
(ii) to the Class IIM-2 Certificates until the
Class IIM-2 Certificate Principal Balance is reduced to zero; and
(iii) to the Class IIM-1 Certificates until the
Class IIM-1 Certificate Principal Balance is reduced to zero.
(j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Paying Agent shall make
distributions to each Certificateholder of record on the preceding Record Date
either by wire transfer in immediately available funds to the account of such
holder at a bank or other entity having appropriate facilities therefor, if (i)
such Holder has so notified the Trustee at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold 100% of a Class of Regular
Certificates or Certificates with an aggregate Initial Certificate Balance of
$1,000,000 or more, or, if not, by check mailed by first Class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register. Notwithstanding the foregoing, but subject to Section 9.02 hereof
respecting the final distribution, distributions with respect to Certificates
registered in the name of a Depository shall be made to such Depository in
immediately available funds.
On or before 5:00 p.m. California Time on the second Business
Day following each Determination Date, the Subservicer shall deliver a report to
the Master Servicer in the form of a computer readable magnetic tape (or by such
other means as the Subservicer and the Master Servicer may agree from time to
time) containing such data and information as agreed to by the Subservicer and
the Master Servicer such as to permit the Master Servicer to prepare the Monthly
Statement to Certificateholders and make the required distributions for the
related Distribution Date (the "Remittance Report").
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Master Servicer
shall prepare and cause to be forwarded by first Class mail to each Holder of a
Class of Certificates of the Trust Fund, the Subservicer and the Depositor a
statement setting forth for the Certificates:
(i) the amount of the related distribution to
Holders of each Class allocable to principal, separately
identifying (A) the aggregate amount of any Principal
- 95 -
Prepayments included therein and(B) the aggregate of all
scheduled payments of principal included therein and (C) the
Extra Principal Distribution Amount, if any;
(ii) the amount of such distribution to Holders
of each Class allocable to interest;
(iii) any Interest Carryforward Amount;
(iv) the Class Certificate Principal Balance of
each Class after giving effect (i) to all distributions allocable to
principal on such Distribution Date and (ii) the allocation of any
Applied Realized Loss Amounts for such Distribution Date;
(v) the Pool Stated Principal Balance for the
following Distribution Date;
(vi) the related amount of the Servicing Fee
paid to or retained by the Subservicer;
(vii) the related amount of the Master Servicer
Fee paid to or retained by the Master Servicer;
(viii) the Pass-Through Rate for each Class of
Certificates for such Distribution Date;
(ix) the Net Mortgage Rates for each of the
Group I Mortgage Loans and the Group II Mortgage Loans;
(x) the amount of Advances for each Certificate
Group included in the distribution on such Distribution Date;
(xi) the cumulative amount of (A) Realized
Losses and (B) Applied Realized Loss Amounts for each Certificate
Group to date;
(xii) the amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts for each Certificate Group with respect
to such Distribution Date;
(xiii) the number and aggregate principal amounts
of Mortgage Loans in each Loan Group (A) delinquent (exclusive of
Mortgage Loans in foreclosure) (1) 31 to 60 days, (2) 61 to 90 days
and (3) 91 or more days, and (B) in foreclosure and delinquent (1) 31
- 96 -
to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case as
of the close of business on the last day of the calendar month
preceding such Distribution Date;
(xiv) with respect to any Mortgage Loan that
became an REO Property during the preceding calendar month in each
Loan Group, the loan number and Stated Principal Balance of such
Mortgage Loan as of the close of business on the Determination Date
preceding such Distribution Date and the date of acquisition thereof;
(xv) the total number and principal balance of
any REO Properties in each Loan Group as of the close of business on
the Determination Date preceding such Distribution Date;
(xvi) the aggregate Stated Principal Balance of
all Liquidated Loans in each Loan Group; and
(xvii) with respect to any Liquidated Loan in each
Loan Group, the loan number and Stated Principal Balance relating
thereto;
(xviii) with respect to each Loan Group, whether a
Group I Trigger Event or a Group II Trigger Event has occurred or, if
applicable, a Stepup Trigger Event has occurred;
(xix) with respect to each Class of Group II
Certificates, any Interest Carryforward Amount with respect to such
Distribution Date for each such Class, any Interest Carryforward
Amount paid for each such Class and any remaining Interest
Carryforward Amount for each such Class; and
(xx) with respect to each Class of Group II
Certificates any Interest Carryover Amount with respect to such
Distribution Date for each such Class, any Interest Carryover Amount
paid for each such Class and any remaining Interest Carryover Amount
for each such Class;
(xxi) the number and Stated Principal Balance of
any Mortgage Loans with respect to each Loan Group which were
purchased or repurchased during the preceding Due Period and since the
Cut-off Date;
(xxii) the number and aggregate Stated Principal
Balance of all Subsequent Mortgage Loans purchased during the
preceding Due Period;
- 97 -
(xxiii) the amount on deposit in the Pre-Funding
Account and the Capitalized Interest Account (in the aggregate and
with respect to each Loan Group); and
(xxiv) for the Distribution Date in the month
immediately following the end of the Funding Period, the current
balance on deposit in the Pre-Funding Account, if any, that has not
been used to purchase Subsequent Mortgage Loans and that is being
distributed to Certificateholders as a mandatory prepayment of
principal on such Distribution Date.
(b) The Master Servicer's responsibility for disbursing the
above information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Subservicer. The
Master Servicer will send a copy of each statement provided pursuant to this
Section 4.05 to each Rating Agency.
(c) Within a reasonable period of time after the end of each
calendar year, the Master Servicer shall cause to be furnished to each Person
who at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 4.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Master
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Master Servicer pursuant to any
requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Master
Servicer shall furnish to the Holders of the Class R Certificates the Form 1066
and each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class R Certificates with respect to
the following matters:
(i) The original projected principal and
interest cash flows on the Closing Date on each Class of regular and
residual interests created hereunder and on the Mortgage Loans, based
on the Prepayment Assumption;
(ii) The projected remaining principal and
interest cash flows as of the end of any calendar quarter with respect
to each Class of regular and residual interests created hereunder and
the Mortgage Loans, based on the Prepayment Assumption;
(iii) The Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the
case of the Mortgage Loans, market discount) or premium accrued or
amortized through the end of such calendar quarter with respect to
each Class of regular or residual interests created hereunder and to
the Mortgage Loans, together with each constant yield to maturity used
in computing the same;
- 98 -
(v) The treatment of losses realized with
respect to the Mortgage Loans or the regular interests created
hereunder, including the timing and amount of any cancellation of
indebtedness income of the REMIC with respect to such regular
interests or bad debt deductions claimed with respect to the Mortgage
Loans;
(vi) The amount and timing of any non-interest
expenses of the REMIC; and
(vii) Any taxes (including penalties and
interest) imposed on the REMIC, including, without limitation, taxes
on "prohibited transactions," "contributions" or "net income from
foreclosure property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 8.11.
SECTION 4.06. Pre-Funding Account.
(a) No later than the Closing Date, the Paying Agent shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Pre-Funding Account, Citibank, N.A., as trustee for the
registered holders of Chase Funding, Mortgage Loan Asset-Backed Certificates,
Series 1999-2" (the "Pre-Funding Account"). The Paying Agent shall, promptly
upon receipt, deposit in the Pre-Funding Account and retain therein the Original
Pre-Funded Amount remitted on the Closing Date to the Paying Agent by the
Depositor. Funds deposited in the Pre-Funding Account shall be held in trust by
the Trustee for the Certificateholders for the uses and purposes set forth
herein.
(b) The Paying Agent shall invest funds deposited in the
Pre-Funding Account in Permitted Investments with a maturity date no later than
the Business Day preceding each Distribution Date or Subsequent Transfer Date,
as the case may be. For federal income tax purposes, the Depositor shall be the
owner of the Pre-Funding Account and shall report all items of income,
deduction, gain or loss arising therefrom. All income and gain realized from
investment of funds deposited in the Pre-Funding Account shall be transferred to
the Capitalized Interest Account on the Business Day immediately preceding each
Distribution Date or Subsequent Transfer Date, as the case may be. The Master
Servicer shall deposit in the Pre-Funding Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon
realization of such loss without any right of reimbursement therefor. Prior to
the Distribution Date in the month immediately following the end of the Funding
Period or any earlier Subsequent Transfer Date on which the entire balance of
the Original Pre-Funded Amount is applied to purchase Subsequent Mortgage Loans,
the Pre-Funding Account will not be an asset of either of the Subsidiary REMIC
or the Master REMIC.
- 99 -
(c) Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Paying Agent as follows:
(i) On any Subsequent Transfer Date, the Paying Agent
shall withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate Stated Principal Balances of the
Subsequent Mortgage Loans transferred and assigned to the
Trustee for deposit in the Mortgage Pool on such Subsequent
Transfer Date and pay such amount to or upon the order of the
Depositor upon satisfaction of the conditions set forth in
Section 2.10 with respect to such transfer and assignment;
(ii) To withdraw any amount not required to be deposited
in the Pre-Funding Account or deposited therein in error; and
(iii) To clear and terminate the Pre-Funding Account upon
the earlier to occur of (A) the Distribution Date in the month
immediately following the end of the Funding Period and (B)
the termination of this Agreement, with any amounts remaining
on deposit therein being deposited into the Certificate
Account for distribution to the related Loan Group in
accordance with the terms thereof.
SECTION 4.07. Capitalized Interest Account.
(a) No later than the Closing Date, the Paying Agent shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Capitalized Interest Account, Citibank, N.A., as trustee
for the registered holders of Chase Funding, Mortgage Loan Asset-Backed
Certificates, Series 1999-2" (the "Capitalized Interest Account"). The Paying
Agent shall, promptly upon receipt, deposit in the Capitalized Interest Account
and retain therein the Capitalized Interest Amount remitted on the Closing Date
to the Paying Agent by the Depositor. Funds deposited in the Capitalized
Interest Account shall be held in trust by the Paying Agent for the
Certificateholders for the uses and purposes set forth herein.
(b) The Paying Agent will invest funds deposited in the
Capitalized Interest Account in Permitted Investments with a maturity date no
later than the Business Day preceding each Distribution Date. For federal income
tax purposes, the Depositor shall be the owner of the Capitalized Interest
Account and shall report all items of income, deduction, gain or loss arising
therefrom. At no time will the Capitalized Interest Account be an asset of
either of the Subsidiary REMIC or the Master REMIC. All income and gain realized
from investment of funds deposited in the Capitalized Interest Account shall be
for the sole and exclusive benefit of the Master Servicer and shall be remitted
by the Paying Agent to the Master Servicer on each Distribution Date. The Master
Servicer shall deposit in the Capitalized Interest Account the amount of any net
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss.
- 100 -
(c) With respect to each Distribution Date during the Funding
Period and on the Distribution Date immediately following the end of the Funding
Period, the Paying Agent shall withdraw from the Capitalized Interest Account
and deposit in the Certificate Account an amount, as provided in the related
Monthly Statement, equal to (i) 30 days' (or in the case of the Class IA-1,
Class IIA-1, Class IIM-1, Class IIM-2 and Class IIB Certificates and the
Distribution Date in July 1999, 37 days' or in the case of the Class IA-1, Class
IIA-1, Class IIM-1, Class IIM-2 and Class IIB Certificates and the Distribution
Date in August 1999, 31 days) interest on the Original Pre-Funded Amount
(reduced by any amounts withdrawn from the Pre-Funding Account to purchase
Subsequent Mortgage Loans) calculated at an annual rate equal to sum of (1) the
weighted average of the Pass-Through Rates on the Group I and Group II
Certificates and (2) 0.0073% per annum, minus (ii) the sum of (1) all scheduled
interest due during the related Due Period on Subsequent Mortgage Loans and
received before the related Servicer Remittance Date or Advanced on or before
the related Servicer Remittance Date and (2) any Advance in respect of the
interest portion of delinquent Scheduled Payments on the Subsequent Mortgage
Loans conveyed to the Trustee during the related Due Period.
(d) Upon the earliest of (i) the Distribution Date in the
month immediately following the end of the Funding Period, (ii) the reduction of
the Certificate Principal Balance of the Group I Class A Certificates, Class
IIA-1 Certificates, Class IM-1 Certificates, Class IM-2 Certificates, Class
IIM-1 Certificates and Class IIM-2 Certificates to zero and (iii) the
termination of this Agreement in accordance with Section 9.01, any amount
remaining on deposit in the Capitalized Interest Account after distributions
pursuant to paragraph (c) above shall be withdrawn by the Paying Agent and paid
to the Depositor or its designee.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in registered form, in
the minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate in of each Class may be issued in a different
amount which must be in excess of the applicable minimum dollar denomination)
and aggregate dollar denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
IA-1 $25,000.00 $1,000.00 $ 76,619,000.00
IA-2 $25,000.00 $1,000.00 $ 52,940,000.00
IA-3 $25,000.00 $1,000.00 $ 5,000,000.00
IA-4 $25,000.00 $1,000.00 $ 19,441,000.00
IA-5 $25,000.00 $1,000.00 $ 24,000,000.00
IM-1 $25,000.00 $1,000.00 $ 9,000,000.00
IM-2 $25,000.00 $1,000.00 $ 7,500,000.00
IB $25,000.00 $1,000.00 $ 5,500,000.00
IIA-1 $25,000.00 $1,000.00 $323,950,000.00
IIM-1 $25,000.00 $1,000.00 $ 22,800,000.00
IIM-2 $25,000.00 $1,000.00 $ 18,050,000.00
IIB $25,000.00 $1,000.00 $ 15,200,000.00
R 100% N/A N/A
- 101 -
The Certificates shall be executed by manual or facsimile
signature on behalf of the Depositor by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Depositor
shall bind the Depositor, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Authenticating Agent by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Authenticating Agent shall authenticate
the Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.
(a) The Master Servicer shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Master Servicer shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the
- 102 -
Master Servicer. Whenever any Certificates are so surrendered for exchange, the
Depositor shall execute and the Authenticating Agent shall authenticate and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Master Servicer duly executed by the holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Master Servicer in accordance with
the Master Servicer's customary procedures.
(b) No Transfer of a Class R Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Master Servicer in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit J (the "Transferor Certificate")
and (i) deliver a letter in substantially the form of either Exhibit K (the
"Investment Letter") or Exhibit L (the "Rule 144A Letter") or (ii) there shall
be delivered to the Master Servicer an Opinion of Counsel that such Transfer may
be made pursuant to an exemption from the Securities Act, which Opinion of
Counsel shall not be an expense of the Depositor, the Master Servicer, the
Subservicer or the Trustee. The Depositor shall provide to any Holder of a Class
R Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for Transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Master Servicer shall cooperate with the
Depositor in providing the Rule 144A information referenced in the preceding
sentence, including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
Transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Master Servicer and the Subservicer against any liability that may result if
the Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No Transfer of a Class IM-1, Class IM-2, Class IB, Class
IIM-1, Class IIM-2, Class IIB or Class R Certificate (an "ERISA Restricted
Security") shall be made unless the Master Servicer
- 103 -
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Master
Servicer, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
or a Person acting on behalf of any such plan or using the assets of any such
plan (except pursuant to clause (ii) below), (ii) if such purchaser is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995) ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under PTCE 95-60, or (iii) in the case of any such ERISA Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan subject to Section 4975 of the Code (or comparable provisions
of any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Master Servicer and the Subservicer to the effect that the purchase or holding
of such ERISA Restricted Certificate will not result in a prohibited transaction
under ERISA or the Code and will not subject the Master Servicer or the
Subservicer to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Master
Servicer or the Subservicer. For purposes of clause (i) of the preceding
sentence, such representation shall be deemed to have been made to the Master
Servicer by the transferee's acceptance of an ERISA Restricted Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA Restricted Certificates) unless the Master Servicer shall have
received from the transferee an alternative representation acceptable in form
and substance to the Subservicer and the Master Servicer. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code without the
delivery to the Master Servicer and the Subservicer of an Opinion of Counsel
satisfactory to the Master Servicer and the Subservicer as described above shall
be void and of no effect; provided, however, that the restriction set forth in
this sentence shall not be applicable if there has been delivered to the Master
Servicer and the Subservicer an Opinion of Counsel satisfactory to the Master
Servicer and the Subservicer to the effect that the purchase or holding of an
ERISA Restricted Certificate will not result in a prohibited transaction under
ERISA or the Code and will not subject the Master Servicer or the Subservicer to
any obligation in addition to those expressly undertaken in this Agreement. The
Master Servicer shall be under no liability to any Person for any registration
of transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered by the
Master Servicer in accordance with the foregoing requirements. The Master
Servicer shall be entitled, but not obligated, to recover from any Holder of any
ERISA Restricted Certificate that was in fact an employee benefit plan subject
to Section 406 of ERISA or a plan subject to Section 4975 of the Code or a
Person acting on behalf of any such plan at the time it became a Holder or, at
such subsequent time as it became such a plan or Person acting on behalf of such
a plan, all payments made on such ERISA Restricted Certificate at and after
either such time. Any such payments so recovered by the Master
- 104 -
Servicer shall be paid and delivered by the Master Servicer to the last
preceding Holder of such Certificate that is not such a plan or Person acting on
behalf of a plan.
(c) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any
Ownership Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Master Servicer of any change
or impending change in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R
Certificate may be registered on the Closing Date or thereafter
transferred, and the Master Servicer shall not register the Transfer
of any Class R Certificate unless, in addition to the certificates
required to be delivered to the Master Servicer under subparagraph (b)
above, the Master Servicer shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any
Ownership Interest in a Class R Certificate shall agree (A) to obtain
a Transfer Affidavit from any other Person to whom such Person
attempts to Transfer its Ownership Interest in a Class R Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such
Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its
Ownership Interest in a Class R Certificate or to cause the Transfer
of an Ownership Interest in a Class R Certificate to any other Person
if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Class R Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Master Servicer shall be under no liability to any
Person for any registration of Transfer of a Class R Certificate that
is in fact not permitted by Section 5.02(b) and this Section 5.02(c)
or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter.
The Master Servicer shall be entitled but not obligated to recover
from any Holder of a Class R Certificate that was in fact not a
- 105 -
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such
time. Any such payments so recovered by the Master Servicer shall be
paid and delivered by the Master Servicer to the last preceding
Permitted Transferee of such Certificate.
(v) The Subservicer shall use its best efforts
to make available, upon receipt of written request from the Master
Servicer, all information necessary to compute any tax imposed under
Section 860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Class R Certificate to any Holder who is not a Permitted
Transferee.
(vi) At the option of the Holder of the Class R
Certificate, the SR Interest and the MR Interest may be severed and
represented by separate certificates; provided, however, that such
separate certification may not occur until the Trustee receives an
Opinion of Counsel to the effect that separate certification in the
form and manner proposed would not result in the imposition of federal
tax upon either REMIC Pool or cause either REMIC Pool to fail to
qualify as a REMIC; and provided further, that the provisions of
Sections 5.02(b) and (c) will apply to each such separate certificate
as if the separate certificate were a Class R Certificate. If, as
evidenced by an Opinion of Counsel, it is necessary to preserve the
REMIC status of either REMIC Pool, the SR Interest and the MR Interest
shall be severed and represented by separate Certificates.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Master Servicer of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Master Servicer, the Depositor
or the Subservicer to the effect that the elimination of such restrictions will
not cause the Trust Fund to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class R Certificate hereby consents to any amendment
of this Agreement that, based on an Opinion of Counsel furnished to the Master
Servicer, is reasonably necessary (a) to ensure that the record ownership of, or
any beneficial interest in, a Class R Certificate is not transferred, directly
or indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates, opinions
and other writings referred to above in this Section 5.02 shall not be an
expense of the Trust Fund, the Master Servicer, the Depositor, the Trustee or
the Subservicer.
- 106 -
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the Master
Servicer, or the Master Servicer receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to Master Servicer such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Master Servicer that such Certificate has been acquired by a bona fide
purchaser, the Master Servicer shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Master Servicer may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Master Servicer) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Master Servicer under the terms of this Section 5.03 shall be canceled and
destroyed by the Master Servicer in accordance with its standard procedures
without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The Subservicer, the Master Servicer and any agent of the
Subservicer or the Master Servicer may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Subservicer, the Master Servicer nor any agent of
the Subservicer or the Master Servicer shall be affected by any notice to the
contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Master Servicer, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the Depositor or Subservicer shall request such information in
writing from the Master Servicer, then the Master Servicer shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Subservicer or such Certificateholders at such recipients' expense the most
recent list of the Certificateholders of the Trust Fund held by the Master
Servicer, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Master Servicer shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
- 107 -
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be
issued in the form of one or more typewritten Certificates representing the
Book- Entry Certificates, to be delivered to the Depository by or on behalf of
the Depositor. Such Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Subservicer, the Trustee and the Master
Servicer may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Master Servicer except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Master Servicer may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
- 108 -
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Master Servicer and the
Trustee shall give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Master Servicer that
the Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Master Servicer or the Depositor is unable to locate a
qualified successor, (b) the Depositor, at its sole option, advises the Master
Servicer that it elects to terminate the book-entry system with respect to such
Certificates through the Depository or (c) after the occurrence and continuation
of an Event of Default, Certificate Owners of such Book-Entry Certificates
having not less than 51% of the Voting Rights evidenced by any Class of
Book-Entry Certificates advise the Master Servicer and the Depository in writing
through the Depository Participants that the continuation of a book-entry system
with respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of such
Class, then the Master Servicer shall notify all Certificate Owners of such
Certificates, through the Depository, of the occurrence of any such event and of
the availability of Definitive Certificates to Certificate Owners of such Class
requesting the same. The Depositor shall provide the Master Servicer with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon surrender to the Master Servicer or the Master
Servicer of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Authenticating Agent
shall authenticate and the Master Servicer shall deliver such Definitive
Certificates. Neither the Depositor nor the Master Servicer shall be liable for
any delay in delivery of such instructions and each may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
such Definitive Certificates, all references herein to obligations imposed upon
or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Master Servicer, to the extent applicable with respect to such
Definitive Certificates and the Master Servicer shall recognize the Holders of
such Definitive Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Master Servicer will maintain or cause to be maintained at
its expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Master Servicer initially designates its offices at x/x Xxx Xxxxx Xxxxxxxxx
Bank, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as offices for such
purposes. The Master
- 109 -
Servicer will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
SECTION 5.10. Authenticating Agents. (a) The Trustee may
appoint one or more Authenticating Agents (each, an "Authenticating Agent")
which shall be authorized to act on behalf of the Trustee in authenticating the
Certificates. Wherever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
must be an entity organized and doing business under the laws of the United
States of America or of any state, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. If the
Authenticating Agent is a party other than the Trustee, the Trustee shall have
no liability in connection with the performance or failure of performance of the
Authenticating Agent. The Trustee hereby appoints The Chase Manhattan Bank as
the initial Authenticating Agent. The Trustee shall be the Authenticating Agent
during any such time as no other Authenticating Agent has been appointed.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 5.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and any such compensation
shall be payable solely by the Trustee, without any right of reimbursement from
the Depositor, the Subservicer or the Trust Fund.
- 110 -
SECTION 5.11. Appointment of Paying Agent. The Master Servicer
may appoint a Paying Agent hereunder (the "Paying Agent"). In the event of any
such appointment, the Master Servicer shall cause the Paying Agent to perform
each of the obligations of the Paying Agent set forth herein and shall be liable
to the Trustee and the Certificateholders for failure of the Paying Agent to
perform such obligations. If the Paying Agent is a party other than the Trustee,
the Trustee shall have no liability in connection with the performance or
failure of performance of the Paying Agent. The Master Servicer designates the
Corporate Trust Department of The Chase Manhattan Bank as the initial Paying
Agent.
The Master Servicer shall cause each Paying Agent other than
the Trustee to execute and deliver to the Master Servicer and the Trustee on the
Closing Date or, if subsequently appointed, on the date of appointment, a
written instrument executed by an officer of the Paying Agent in which such
Paying Agent shall agree with the Master Servicer and the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders.
ARTICLE VI
THE DEPOSITOR, THE SUBSERVICER AND
THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor, the
Subservicer and the Master Servicer.
The Depositor, the Subservicer and the Master Servicer shall
each be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor, the
Subservicer or the Master Servicer.
The Depositor, the Subservicer and the Master Servicer will
each keep in full effect its existence, rights and franchises as a corporation
under the laws of the United States or under the laws of one of the States
thereof and will each obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor, the Subservicer or the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Subservicer or the Master
Servicer shall be a party, or any person succeeding to the
- 111 -
business of the Depositor, the Subservicer or the Master Servicer, shall be the
successor of the Depositor, the Subservicer or the Master Servicer, as the case
may be, hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Subservicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer, the Subservicer and Others.
None of the Depositor, the Master Servicer, the Subservicer
nor any of the directors, officers, employees or agents of the Depositor, the
Master Servicer or the Subservicer shall be under any liability to the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Master Servicer, the Subservicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Master Servicer, the Subservicer or any such Person from any
liability that would otherwise be imposed by reasons of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer, the Subservicer and any director, officer, employee or agent of the
Depositor, the Master Servicer or the Subservicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer,
the Subservicer and any director, officer, employee or agent of the Depositor,
the Master Servicer or the Subservicer shall be indemnified by the Trust Fund
and held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the Master
Servicer nor the Subservicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor, the Master Servicer or
the Subservicer may, in its discretion undertake any such action that it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Master Servicer and the
Subservicer shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 3.08 hereof.
- 112 -
SECTION 6.04. Limitation on Resignation of Subservicer.
The Subservicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination
permitting the resignation of the Subservicer shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer to such appointment
shall have assumed the Subservicer's responsibilities, duties, liabilities and
obligations hereunder.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Subservicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of FNMA or FHLMC for persons
performing servicing for mortgage loans purchased by FNMA or FHLMC. In the event
that any such policy or bond ceases to be in effect, the Subservicer shall use
its reasonable best efforts to obtain a comparable replacement policy or bond
from an insurer or issuer, meeting the requirements set forth above as of the
date of such replacement.
SECTION 6.06. Compensation to the Master Servicer. The Master
Servicer shall be entitled to receive the Master Servicer Fee as compensation
for services rendered by the Master Servicer under this Agreement. The Master
Servicer shall pay itself such Master Servicer Fee monthly from amounts on
deposit in the Certificate Account. The Master Servicer shall also be entitled
to all income and gain net of any losses realized from Permitted Investments in
the Certificate Account and the Distribution Account, as well as any amounts in
respect of prepayment penalties or late payment charges.
ARTICLE VII
DEFAULT; TERMINATION OF SUBSERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Subservicer to deposit
in the Collection Account or the Certificate Account or remit to the
Trustee or any Paying Agent any payment (excluding a payment required
to be made under Section 4.01 hereof) required to be made under the
terms of this Agreement, which failure shall continue unremedied for
five calendar
- 113 -
days and, with respect to a payment required to be made under Section
4.01 hereof, for one calendar day, after the date on which written
notice of such failure shall have been given to the Subservicer by the
Trustee or the Depositor, or to the Trustee and the Subservicer by the
Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(ii) any failure by the Subservicer to observe
or perform in any material respect any other of the covenants or
agreements on the part of the Subservicer contained in this Agreement
or any representation or warranty shall prove to be untrue, which
failure or breach shall continue unremedied for a period of 60 days
after the date on which written notice of such failure shall have been
given to the Subservicer by the Trustee or the Depositor, or to the
Trustee by the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Subservicer and such decree or
order shall have remained in force undischarged or unstayed for a
period of 60 consecutive days; or
(iv) consent by the Subservicer to the
appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Subservicer or all or substantially
all of the property of the Subservicer;
(v) admission by the Subservicer in writing of
its inability to pay its debts generally as they become due, file a
petition to take advantage of, or commence a voluntary case under, any
applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or
(vi) If either of the following events shall
occur:
(A) With respect to the Group I Mortgage Loans, the sum
(without duplication) of:
(1) the aggregate Stated Principal Balance of the Group I
Mortgage Loans that are 30 days Delinquent multiplied by 7.40%;
(2) the aggregate Stated Principal Balance of the Group I
Mortgage Loans that are 60 days Delinquent multiplied by 14.81%;
- 114 -
(3) the aggregate Stated Principal Balance of the Group I
Mortgage Loans that are at least 90 days Delinquent (including Group I Mortgage
Loans that are in foreclosure and REO Properties) multiplied by 29.61%; and
(4) the cumulative Realized Losses on the Mortgage Pool.
exceeds the product of (a) (i) on any date on or prior to June 1, 2004, 5.75%
and (ii) on any date after June 1, 2004, 8.75% and (b) the aggregate Cut-Off
Date Principal Balance with respect to the Group I Mortgage Loans plus the
Original Pre-Funded Amount allocable to Loan Group I; or
(B) With respect to the Group II Mortgage Loans, the sum (without
duplication) of:
(1) the aggregate Stated Principal Balance of the Group II
Mortgage Loans that are 30 days Delinquent multiplied by 10.58%;
(2) the aggregate Stated Principal Balance of the Group II
Mortgage Loans that are 60 days Delinquent multiplied by 21.15%;
(3) the aggregate Stated Principal Balance of the Group II
Mortgage Loans that are at least 90 days Delinquent (including Mortgage Loans
that are in foreclosures and REO Properties) multiplied by 42.30%; and
(4) the Applied Realized Loss Amount;
exceeds the product of (a) (i) on any date on or prior to June 1, 2004, 10.75%
and (ii) on any date after June 1, 2004, 16.25% and (b) the aggregate Cut-Off
Date Principal Balance with respect to the Group II Mortgage Loans plus the
Original Pre-Funded Amount allocable to Loan Group II.
If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee may, or at the direction of the Holders of Certificates evidencing
not less than 25% (or 51%, in the case of the Event of Default specified in (vi)
above) of the Voting Rights evidenced by the Certificates, shall, by notice in
writing to the Subservicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Subservicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Subservicer of such
written notice, all authority and power of the Subservicer hereunder, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee. The Trustee shall thereupon make any Advance described in Section
4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Subservicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination,
- 115 -
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. Unless expressly provided in such
written notice, no such termination shall affect any obligation of the
Subservicer to pay amounts owed pursuant to Article VIII. The Subservicer agrees
to cooperate with the Trustee in effecting the termination of the Subservicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be credited
to the Collection Account, or thereafter be received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Subservicer
hereunder, such Subservicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Subservicer's rights and obligations as Subservicer
hereunder and received after such notice, that portion thereof to which such
Subservicer would have been entitled pursuant to Sections 3.08(a)(i) through
(viii), and any other amounts payable to such Subservicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Subservicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Subservicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Subservicer by the terms and provisions hereof
and applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all fees, costs
and expenses relating to the Mortgage Loans that the Subservicer would have been
entitled to if the Subservicer had continued to act hereunder. Notwithstanding
the foregoing, if the Trustee has become the successor to the Subservicer in
accordance with Section 7.01 hereof, the Trustee may, if it shall be unwilling
to so act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Subservicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Subservicer hereunder. Any
successor Subservicer shall be an institution that is a FNMA and FHLMC approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Subservicer (other
than liabilities of the Subservicer under Section 6.03 hereof incurred prior to
termination of the Subservicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
- 116 -
reduced as a result of such assignment and delegation. No appointment of a
successor to the Subservicer hereunder shall be effective until the Trustee
shall have consented thereto, and written notice of such proposed appointment
shall have been provided by the Trustee to each Certificateholder. The Trustee
shall not resign as servicer until a successor servicer has been appointed and
has accepted such appointment. Pending appointment of a successor to the
Subservicer hereunder, the Trustee, unless the Trustee is prohibited by law from
so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Subservicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Subservicer to deliver or provide,
or any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Subservicer as servicer shall give notice
to the Mortgagors of such change of servicer and shall, during the term of its
service as servicer maintain in force the policy or policies that the
Subservicer is required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Subservicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use
- 117 -
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.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the Trustee
shall take action as it deems appropriate to have the instrument corrected.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct, its negligent failure to perform its
obligations in compliance with this Agreement, or any liability that would be
imposed by reason of its willful misfeasance or bad faith; provided, however,
that:
(i) prior to the occurrence of an Event of
Default, and after the curing of all such Events of Default that may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable, individually or as Trustee, except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable,
individually or as Trustee, for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee,
unless the Trustee was negligent or acted in bad faith or with willful
misfeasance; and
(iii) the Trustee shall not be liable,
individually or as Trustee, with respect to any action taken, suffered
or omitted to be taken by it in good faith in accordance with the
direction of Holders of each Class of Certificates evidencing not less
than 25% of the Voting Rights of such Class relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement.
- 118 -
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and
shall be protected in acting or refraining from acting upon any
resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel of its
choice and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(iii) the Trustee shall not be liable,
individually or as Trustee, for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of
Default hereunder and after the curing of all Events of Default that
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such liability is not assured to it;
(vii) the Trustee shall not be liable,
individually or as Trustee, for any loss on any investment of funds
pursuant to this Agreement (other than as issuer of the investment
security);
- 119 -
(viii) the Trustee shall not be deemed to have
knowledge of an Event of Default until a Responsible Officer of the
Trustee shall have received written notice thereof; and
(ix) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
the trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
SECTION 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements
of the Depositor or the Subservicer, as the case may be, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Agreement or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Subservicer of any funds paid to the
Depositor or the Subservicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account, Certificate Account or Distribution
Account by the Depositor or the Subservicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Master Servicer to Pay Trustee's Fees and
Expenses.
The Master Servicer covenants and agrees (i) to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee and (ii) to
pay or reimburse the Trustee, upon its request, for all reasonable expenses,
- 120 -
disbursements and advances incurred or made by the Trustee on behalf of the
Trust Fund in accordance with any of the provisions of this Agreement
(including, without limitation: (A) the reasonable compensation and the expenses
and disbursements of its counsel, but only for representation of the Trustee
acting in its capacity as Trustee hereunder and (B) to the extent that the
Trustee must engage persons not regularly in its employ to perform acts or
services on behalf of the Trust Fund, which acts or services are not in the
ordinary course of the duties of a trustee, paying agent or certificate
registrar, in the absence of a breach or default by any party hereto, the
reasonable compensation, expenses and disbursements of such persons, except any
such expense, disbursement or advance as may arise from its negligence, bad
faith or willful misconduct). The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability or expense (i) incurred in connection with
any legal action relating to this Agreement or the Certificates, or in
connection with the performance of any of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Trustee's duties
hereunder or by reason of reckless disregard of the Trustee's obligations and
duties hereunder and (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Master Servicer and the Subservicer
and their respective affiliates; provided, however, that such corporation cannot
be an affiliate of the Subservicer other than the Trustee in its role as
successor to the Subservicer.
- 121 -
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Subservicer and by mailing notice of resignation by first
Class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register and each Rating Agency, not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Subservicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered by the successor Trustee to the
Subservicer, one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be given
to each Rating Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee and the Subservicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or
- 122 -
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.06 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Subservicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Subservicer and the Trustee may consider necessary or desirable. The Trustee
shall be ultimately liable for the actions of any co-trustee. If the Subservicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
- 123 -
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations
conferred or imposed upon the Trustee, except for the obligation of
the Trustee under this Agreement to advance funds on behalf of the
Subservicer, shall be conferred or imposed upon and exercised or
performed by the 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 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 (whether as
Trustee hereunder or as successor to the Subservicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held
personally liable by reason of any act or omission of any other
trustee hereunder; and
(iii) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Subservicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
- 124 -
SECTION 8.11. Tax Matters.
It is intended that each of the Master REMIC and Subsidiary
REMIC shall constitute, and that the affairs of the Trust Fund shall be
conducted so as to qualify as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Master Servicer covenants and agrees that it shall act as agent
(and the Master Servicer is hereby appointed to act as agent) on behalf of each
of the Master REMIC and Subsidiary REMIC and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, in a timely manner, a U.S.
Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable
state or local tax authorities income tax or information returns for each
taxable year with respect to each of the Master REMIC and Subsidiary REMIC,
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for each of the Master REMIC and Subsidiary REMIC; (c) make or cause to be made
elections, on behalf of each of the Master REMIC and Subsidiary REMIC to be
treated as a REMIC on the federal tax return of each of the Master REMIC and
Subsidiary REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when required
to be provided to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue discount using the
Prepayment Assumption; (e) provide information necessary for the computation of
tax imposed on the transfer of a Class R Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax); (f) to the extent that they are under its control conduct
the affairs of each of the Master REMIC and Subsidiary REMIC at all times that
any Certificates are outstanding so as to maintain the status of each of the
Master REMIC and Subsidiary REMIC as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of each of the Master REMIC and
Subsidiary REMIC; (h) pay, from the sources specified in the last paragraph of
this Section 8.11, the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on each of the Master
REMIC and Subsidiary REMIC prior to the termination of the Trust Fund when and
as the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not
- 125 -
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) sign or cause to be signed
federal, state or local income tax or information returns; (j) maintain records
relating to each of the Master REMIC and Subsidiary REMIC, including but not
limited to the income, expenses, assets and liabilities of each of the Master
REMIC and Subsidiary REMIC, and the fair market value and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the Code,
as may be necessary to prepare the foregoing returns, schedules, statements or
information; and (k) as and when necessary and appropriate, represent each of
the Master REMIC and Subsidiary REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of each
of the Master REMIC and Subsidiary REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of either the Subsidiary REMIC or the Master REMIC, and otherwise
act on behalf of either the Subsidiary REMIC or the Master REMIC in relation to
any tax matter involving either the Subsidiary REMIC or the Master REMIC or
controversy involving the Trust Fund.
In order to enable the Master Servicer to perform its duties
as set forth herein, the Depositor shall provide, or cause to be provided, to
the Master Servicer within 10 days after the Closing Date all information or
data that the Master Servicer requests in writing and determines to be relevant
for tax purposes to the valuations and offering prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flows of the Certificates and the Mortgage Loans. Thereafter, the
Depositor shall provide to the Master Servicer promptly upon written request
therefor, any such additional information or data that the Master Servicer may,
from time to time, request in order to enable the Master Servicer to perform its
duties as set forth herein. The Depositor hereby agrees to indemnify the Master
Servicer for any losses, liabilities, damages, claims or expenses of the Master
Servicer arising from any errors or miscalculations of the Master Servicer that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Master Servicer on a timely basis.
In the event that any tax is imposed on "prohibited
transactions" of either the Subsidiary REMIC or the Master REMIC as defined in
Section 860F(a)(2) of the Code, on the "net income from foreclosure property" of
the Trust Fund as defined in Section 860G(c) of the Code, on any contribution to
the Trust Fund after the Startup Day pursuant to Section 860G(d) of the Code, or
any other tax is imposed, if not paid as otherwise provided for herein, such tax
shall be paid by (i) the Master Servicer, if any such other tax arises out of or
results from a breach by the Master Servicer of any of its obligations under
this Agreement, (ii) (x) the Subservicer, in the case of any such minimum tax,
and (y) any party hereto (other than the Master Servicer) to the extent any such
other tax arises out of or results from a breach by such other party of any of
its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders (pro rata), and
second with amounts otherwise to be distributed to all other
- 126 -
Certificateholders in the following order of priority: first, to the Class IB
and Class IIB Certificates (pro rata), second, to the Class IM-2 and IIM-2
Certificates (pro rata), third, to the Class IM-1 and IIM-1 Certificates (pro
rata), and fourth, to the Group I Class A Certificates and the Group II Class A
Certificates (pro rata). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class R Certificates, the
Master Servicer is hereby authorized to instruct the Trustee or Paying Agent, as
applicable and the Trustee or Paying Agent, as applicable is hereby authorized
pursuant to such instruction to retain on any Distribution Date, from the
Holders of the Class R Certificates (and, if necessary, second, from the Holders
of the all other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Master Servicer agrees to promptly notify in writing the
party liable for any such tax of the amount thereof and the due date for the
payment thereof.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of
all Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Subservicer, the Master Servicer and the Trustee created
hereby with respect to the Trust Fund shall terminate upon the earlier of (a)
the repurchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in each Loan Group at the price (the "Repurchase Price")
equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
Loan in such Loan Group (other than in respect of REO Property), (ii) accrued
interest thereon at the applicable Mortgage Rate, (iii) the appraised value of
any REO Property in such Loan Group (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Depositor and the Trustee and (iv) any unreimbursed Servicing
Fees, Advances and Servicing Advances with respect to the Mortgage Loans in such
Loan Group prior to the exercise of such repurchase, together with any
unreimbursed Master Servicing Fees; and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created hereby continue beyond the earlier of (i) the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties
in a Loan Group pursuant to clause (a) above shall be conditioned upon the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group, at
the time of any such repurchase, aggregating ten percent or less of the
aggregate Initial Certificate Principal Balance of the Certificates in such Loan
Group.
- 127 -
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Collection Account, the
Trustee shall send a final distribution notice promptly to each
Certificateholder or (ii) the Master Servicer determines that a Class of
Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the Certificateholders within seven (7) Business Days after
such Determination Date that the final distribution in retirement of such Class
of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the office of the Master Servicer. If the Master
Servicer elects to terminate the Trust Fund pursuant to clause (a) of Section
9.01, at least 10 days prior to the date notice is to be mailed to the affected
Certificateholders, the Master Servicer shall notify the Depositor, the
Subservicer and the Trustee of the date such electing party intends to terminate
the Trust Fund and of the applicable repurchase price of the Mortgage Loans and
REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and no later than the 15th day of the month immediately preceding the month
of such final distribution. Any such notice shall specify (a) the Distribution
Date upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated, (b)
the location of the office or agency at which such presentation and surrender
must be made, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Collection Account and the Certificate Account to be
deposited in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Master Servicer the Mortgage Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class the
amounts allocable to such Certificates held in the Distribution Account in the
order and priority set forth in Section 4.04 hereof on the final Distribution
Date and in proportion to their respective Percentage Interests.
- 128 -
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all Certificates shall not have been surrendered for cancellation, the
Class R Certificateholders shall be entitled to all unclaimed funds and other
assets of the Trust Fund that remain subject hereto. Upon payment to the Class R
Certificateholders of such funds and assets, the Trustee shall have no further
duties or obligations with respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase
option on both of the Group I Mortgage Loans and the Group II Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited transactions"
of the Trust Fund as defined in section 860F of the Code, or (ii) cause the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) The Depositor shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn
specify the first day of such period in a statement attached to the
Trust Fund's final Tax Return pursuant to Treasury Regulation Section
1.860F-1. The Depositor shall satisfy all the requirements of a
qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained
at the expense of the Subservicer;
(ii) During such 90-day liquidation period, and
at or prior to the time of making the final payment on the
Certificates, the Depositor as agent of the Trustee shall sell all of
the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final
payment on the Certificates, the Trustee shall distribute or credit,
or cause to be distributed or credited, to the Class R
Certificateholders all cash on hand (other than cash retained to meet
outstanding claims known to the Trustee), and the Trust Fund shall
terminate at that time, whereupon the Trustee shall have no further
duties or obligations with respect to sums distributed or credited to
the Class R Certificateholders.
- 129 -
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Depositor to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Master Servicer as agent for each REMIC hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Depositor, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1) and to take such other action in connection therewith as may
be reasonably requested by the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, or to make such other provisions with respect
to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder; provided, however, that any such amendment
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates, it being understood
and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Depositor, the Subservicer and the Master
Servicer may at any time and from time to time amend this Agreement to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or appropriate to maintain the qualification of the Subsidiary REMIC and the
Master REMIC as REMICs under the Code or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee and the Holders
of each Class of Certificates affected
- 130 -
thereby evidencing not less than 66 2/3% of the Voting Rights of such Class for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Holders of Certificates; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing 66% or more of the Voting Rights of such Class or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required to
be reached pursuant to this Section 10.01.
SECTION 10.02 Counterparts. 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.
- 131 -
SECTION 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 10.04 Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other reason
this Agreement is held or deemed to create a security interest in such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyance provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
SECTION 10.05 Notices.
(a) The Master Servicer shall use its best efforts to promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(i) Any material change or amendment to this
Agreement;
(ii) The occurrence of any Event of Default that
has not been cured;
- 132 -
(iii) The resignation or termination of the
Master Servicer, the Subservicer or the Trustee and the appointment of
any successor;
(iv) The repurchase or substitution of Mortgage
Loans pursuant to Sections 2.02, 2.03 and 3.12; and
(v) The final payment to Certificateholders.
The Master Servicer shall promptly furnish to each Rating
Agency copies of the following:
(i) Each report to Certificateholders described
in Section 4.04;
(ii) Each annual statement as to compliance
described in Section 3.17; and
(iii) Each annual independent public accountants'
servicing report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, Chase Funding, Inc., 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx,
Xxxxxxxxx Lake, New Jersey 07675, Attention: Structured Finance; (b) in the case
of the Subservicer, Advanta Mortgage Corp. USA, 00000 Xxxxxx Xxxxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Senior Vice President, Loan Servicing; (c)
in the case of the Trustee, Citibank, N.A., 111 Wall Street, 0xx Xxxxx, Xxxx 0,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Department; (d) in the
case of the Master Servicer, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000,
Attention: Structured Finance (with a copy to The Chase Manhattan Bank, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Services);
(e) in the case of the Rating Agencies, (i) Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential
Mortgage Monitoring Group and (ii) Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and (f) in the case of any of the foregoing persons, such
other addresses as may hereafter be furnished by any such persons to the other
parties to this Agreement. Notices to Certificateholders shall be deemed given
when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
SECTION 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or
- 133 -
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 10.07 Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be assigned
by the Subservicer without the prior written consent of the Trustee and
Depositor.
SECTION 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of
- 134 -
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 10.09 Inspection and Audit Rights.
The Subservicer agrees that, on reasonable prior notice, it
will permit any representative of the Depositor or the Trustee during the
Subservicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Subservicer relating to the Mortgage
Loans, to make copies and extracts therefrom, to cause such books to be audited
by independent certified public accountants selected by the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Subservicer hereby authorizes such accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 10.09 shall be borne by the party requesting
such inspection; all other such expenses shall be borne by the Subservicer.
SECTION 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Authenticating Agent pursuant to this Agreement,
are and shall be deemed fully paid.
* * *
- 135 -
IN WITNESS WHEREOF, the Depositor, the Subservicer, the Master
Servicer and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
CHASE FUNDING, INC.,
as Depositor
By:_________________________________
Name:
Title:
ADVANTA MORTGAGE CORP. USA,
as Subservicer
By:_________________________________
Name:
Title:
CHASE MANHATTAN MORTGAGE CORPORATION,
as Master Servicer
By:_________________________________
Name:
Title:
CITIBANK, N.A.,
not in its individual capacity,
but solely as Trustee
By:_________________________________
Name:
Title:
EXHIBIT A
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE MASTER SERVICER, THE SUBSERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, ADVANTA MORTGAGE CORP., USA THE TRUSTEE OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE MASTER SERVICER.
CLASS IA-1 CERTIFICATE
Number 99-2-IA-1-1 Original Denomination
$
Cut-off Date: June 1, 1999 Final Scheduled
Distribution Date:
First Distribution Date: Aggregate Initial Certificate
July 26, 1999 Balance of all Class IA-1
Certificates: $
Pass-Through Rate: CUSIP:
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 1999-2
evidencing an ownership interest in distributions allocable to the Class IA-1-1
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
Unless this Certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation ("DTC"),
to the Trustee for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class IA-1 Certificates) in certain
distributions with respect to a pool of conventional, sub-prime mortgage loans
(the "Mortgage Loans") formed and sold by Chase Funding, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Advanta Mortgage Corp., USA (the "Subservicer") and are
secured by first mortgages on Mortgaged Properties. The Trust Fund was created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
June 1, 1999 among the Depositor, the Subservicer, Chase Manhattan Mortgage
Corporation (the "Master Servicer") and Citibank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as Mortgage Loan Asset-Backed Certificates, Series
1999-2, Class IA-1 (the "Class IA-1 Certificates") and is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which Agreement such Holder is bound. Also issued under the
Agreement are Certificates designated as Mortgage Loan Asset-Backed
Certificates, Series 1999-2, Class IA-2, Class IA-3, Class IA-4 and Class IA-5
Certificates (collectively, with the Class IA-1 Certificates, the "Group I Class
A Certificates"), Class IIA-1 Certificates (the "Group II Class A
Certificates"), Class IM-1 and Class IM-2 Certificates (the "Mezzanine Group I
Certificates"), Class IIM-1 and Class IIM-2 Certificates (together the
"Mezzanine Group II Certificates"), Class IB Certificates (the "Class IB
Certificates") and Class IIB Certificates (the "Class IIB Certificates").
The Group I Class A Certificates, the Group II Class A
Certificates, the Mezzanine Group I Certificates, the Mezzanine Group II
Certificates, the Class IB Certificates and the Class IIB Certificates are
collectively referred to herein as the "Certificates".
Pursuant to the terms of the Agreement, the Master Servicer
will distribute from funds in the Distribution Account the amount as described
on the reverse hereof on the 25th day of each month or, if such 25th day is not
a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing on July 25, 1999. Such distributions will be made to the
Person in whose name this Certificate is registered at the close of business on
the last Business Day of the month preceding the month in which such payment is
made, or if such last day is not a Business Day, the Business Day immediately
preceding such last day.
Distributions on this Certificate will be made either by check
mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register, or by wire transfer in immediately
available funds to the account of such Holder at a bank or other financial or
depository institution having appropriate facilities therefor, if such Holder
has so notified the Master Servicer in writing at least 5 Business Days prior to
the first Distribution Date for which distribution by wire transfer is to be
made, and such Holder's Certificates evidence an aggregate original principal
balance of not less than $1,000,000 or such Holder holds a 100% Percentage
Interest of such Class. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Master Servicer, of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final distribution.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer, of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Master Servicer, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by
the Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.
Dated: June 18, 1999 CHASE FUNDING, INC.
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IA-1
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:____________________________
Authorized Signatory
REVERSE OF CERTIFICATE
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 1999-2
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 1999-2, issued in five Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates and one Class of Class IIB Certificates, each
evidencing an interest in certain distributions with respect to a pool of
conventional, sub-prime Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee.
Following the initial issuance of the Certificates, the
Principal Balance of this Certificate will be different from the Original
Denomination shown above. Anyone acquiring this Certificate may ascertain its
current Principal Balance by inquiry of the Master Servicer.
The Holder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under Section 5.10, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final distribution.
No service charge will be made to the Holder for any transfer
or exchange of the Certificate, but the Master Servicer may require payment of a
sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate. Prior to due presentation of a Certificate for
registration of transfer, the Depositor, the Subservicer, the Master Servicer
and the Trustee may treat the person in whose name any Certificate is registered
as the owner of such Certificate and the Percentage Interest in the Trust Fund
evidenced thereby for the purpose of receiving distributions pursuant to the
Agreement and for all other purposes whatsoever, and neither the Depositor, the
Subservicer, the Master Servicer nor the Trustee will be affected by notice to
the contrary.
The Agreement may be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of the Trust Fund as a REMIC,
or to make any other provisions with respect to matters or questions arising
under the Agreement which are not materially inconsistent with the provisions of
the Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee with the consent
of the Holders of Certificates evidencing in the aggregate not less than 51% of
the Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the third paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
For federal income tax purposes, the Trust Fund includes two
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). As described more
fully herein and in the Prospectus, the Certificates, other than the Residual
Certificates, will constitute "regular interests" in the Master REMIC. The
Residual Certificates will represent the sole class of "residual interests" in
both the Master REMIC and the Subsidiary REMIC.
The respective obligations and responsibilities of the
Depositor, the Subservicer, the Master Servicer and the Trustee under the
Agreement will terminate upon (i) the later of the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan or
the disposition of all property acquired upon the foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due thereunder;
or (ii) at the option of the Master Servicer, on any Distribution Date on which
the aggregate Stated Principal Balances of the Mortgage Loans; such Loan Group
is equal to or less than 10% of the aggregate Initial Certificate Principal
Balance of the Certificates in such Mortgage
Loan Group, so long as the Master Servicer deposits or causes to be deposited in
the Distribution Account during the Principal Prepayment Period related to such
Distribution Date an amount equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in such Loan Group (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate, (iii)
the appraised value of any REO Property in such Loan Group (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Depositor and the Trustee and (iv)
any unreimbursed Servicing Fees, Advances and Servicing Advances, and the
principal portion of any unreimbursed Advances, made on the Mortgage Loans in
such Loan Group prior to such Distribution Date; provided, however, that in no
event shall the trust created hereby continue beyond the earlier of (i) 32 years
after the Closing Date and (ii) the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the Court of St. James's, living on the date hereof.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
____________________________________
_____________________________________________________________
(Please Print or Type Name and Address of Assignee)
_____________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
__________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty) _______________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every particular,
without alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT B
[RESERVED]
EXHIBIT C
[RESERVED]
EXHIBIT D
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN EACH OF TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SUBSERVICER OR THE TRUSTEE REFERRED TO
BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, ADVANTA MORTGAGE
CORP.,USA, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN (A "PLAN") WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT
SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE CONDITIONS SET FORTH IN SECTION I
AND SECTION III OF PTCE 95-60 ARE SATISFIED WITH RESPECT TO THE PURCHASE AND
HOLDING OF THE CERTIFICATES, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR
REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO
BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN ASSET REGULATIONS SET
FORTH IN 29 C.F.R. ss.2510.3-101 AND TO BE SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE TRUSTEE, THE SUBSERVICER, THE COMPANY OR ANY OF THEIR
AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER ERISA OR SECTION 4975 OF THE CODE) RELATING TO THE CERTIFICATES.
CLASS R CERTIFICATE
Number 99-2-R-1 Percentage Interest: 100%
Cut-off Date: June 1, 1999 Pass-Through Rate: Variable
First Distribution Date:
July 26, 1999
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 1999-2
evidencing an ownership interest in distributions allocable to the Class R
certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE
SOUTHEAST is the registered owner of the ownership interest (the "Ownership
Interest") evidenced by this Certificate (obtained by dividing the Original
Denomination of this Certificate by the aggregate Original Denomination of all
Class R Certificates) in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Master Servicer") and are secured by first mortgages on
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of June 1, 1999 among the
Depositor, Advanta Mortgage Corp., USA, as Subservicer (the "Subservicer"), the
Master Servicer and Citibank, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 1999-2, Class R (the "Class R Certificates") and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which Agreement such Holder is bound. Also issued under
the Agreement are Certificates designated as Mortgage Loan Asset-Backed
Certificates, Series 1999-2, Class IA-1, Class IA-2, Class IA-3, Class IA-4 and
Class IA-5 Certificates (collectively, the "Group I Class A Certificates"),
Class IIA-1 Certificates (the Group II Class A Certificates"), Class IM-1 and
Class IM-2 Certificates (together, the "Mezzanine Group I Certificates"), Class
IIM-1 and Class IIM-2 Certificates (together, the "Mezzanine Group II
Certificates"), Class IB Certificates (the "Class IB Certificates") and Class
IIB Certificates (the "Class IIB Certificates"). The Group I Class A
Certificates, Group II Class A Certificates, Mezzanine Group I Certificates,
Mezzanine Group II Certificates, Class IB Certificates and Class IIB
Certificates are collectively referred to herein as the "Certificates")
Pursuant to the terms of the Agreement, the Master Servicer
will distribute from funds in the Distribution Account the amount as described
on the reverse hereof on the 25th day of each month or, if such 25th day is not
a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing on July 25, 1999. Such distributions will be made to the
Person in whose name this Certificate is registered at the close of business on
the
last Business Day of the month preceding the month in which such payment is
made, or if such last day is not a Business Day, the Business Day immediately
preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Master Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Master Servicer or at such other office as may be designated by
such notice of final distribution.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Master Servicer, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by
the Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.
Dated: June 18, 1999 CHASE FUNDING, INC.
By:_______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:________________________
Authorized Signatory
REVERSE OF CERTIFICATE
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 1999-2
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 1999-2, issued in five Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates and one Class of Class IIB Certificates, each
evidencing an interest in certain Distributions with respect to a pool of
conventional, sub-prime Mortgage Loans formed and sold by the Depositor and
certain other property conveyed by the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final Distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such Distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final Distribution.
No service charge will be made to the Holder for any transfer
or exchange of the Certificate, but the Trustee, or, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent, may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Subservicer, the Master Servicer and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Subservicer, the Authenticating Agent nor the Trustee will be affected by notice
to the contrary.
The Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Subservicer and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of the Trust Fund as a REMIC,
or to make any other provisions with respect to matters or questions arising
under the Agreement which are not materially inconsistent with the provisions of
the Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Subservicer and the Trustee with the consent
of the Holders of Certificates evidencing in the aggregate not less than 51% of
the Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment or (iii) change the percentage
specified in clause (ii) of the first paragraph of Section 10.01 of the
Agreement, without the consent of the Holders of all Certificates of such Class
then outstanding.
For federal income tax purposes, the Trust Fund includes two
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates,
other than the Residual Certificates, will constitute "regular interests" in the
Master REMIC. The Residual Certificates will represent the sole class of
"residual interests" in both the Master REMIC and the Subsidiary REMIC.
The respective obligations and responsibilities of the
Depositor, the Subservicer, the Master Servicer and the Trustee under the
Agreement will terminate upon (i) the later of the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan or
the disposition of all property acquired upon the foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due thereunder;
or (ii) at the option of the Master Servicer, on any Distribution Date on which
the aggregate Stated Principal Balances of the Mortgage Loans in such Loan Group
is equal to or less than 10% of the initial Certificate Principal Balance of the
Certificates in such Mortgage Loan Group, so long as the Master Servicer
deposits or causes to be deposited in the Distribution Account during the
Principal Prepayment Period related to such Distribution Date an amount equal to
the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan in
such Loan Group (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate, (iii) the appraised value of any REO
Property in such Loan Group (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Depositor and the Trustee and (iv) any unreimbursed Servicing Fees,
Advances and Servicing Advances, and the principal portion of any unreimbursed
Advances, made on the Mortgage Loans in such Loan Group prior to such
termination; provided, however, that in no event shall the trust created hereby
continue beyond the earlier of (i) 32 years after the Closing Date and (ii) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
__________________________________________
_____________________________________________________________
(Please Print or Type Name and Address of Assignee)
_____________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
__________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty) _______________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in every
particular, without alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT E
[RESERVED]
EXHIBIT F
SCHEDULE OF MORTGAGE LOANS
[Intentionally Omitted]
EXHIBIT G
[RESERVED]
EXHIBIT H
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 1999 among Chase
Funding, Inc. as depositor, Advanta Mortgage Corp. USA, as subservicer,
Chase Manhattan Mortgage Corporation, as master servicer and Citibank,
N.A., as trustee, Chase Funding, Inc., Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 1999-2
-----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be
delivered to the Trustee pursuant to Section 2.01 of the Pooling and Servicing
Agreement are in its possession;
(ii) In connection with each Mortgage Loan or Assignment
thereof as to which documentary evidence of recording was not received on the
Closing Date, it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such
documents do not contain any material omissions or defects within the meaning of
Section 2.01 or 2.02.
The Trustee further certifies that as to each Mortgage Loan,
the Trustee holds the Mortgage Note without any Responsible Officer of the
Trustee having received written notice (a) of any adverse claims, liens or
encumbrances, (b) that any Mortgage Note was overdue or has been dishonored, (c)
of evidence on the face of any Mortgage Note or Mortgage of any security
interest therein, or (d) of any defense against or claim to the Mortgage Note by
any other party.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond confirming (i) that the
Mortgage Loan number and the name of the Mortgagor in each Mortgage File conform
to the respective Mortgage Loan number and name listed on the Mortgage Loan
Schedule and (ii) the existence in each Mortgage File of each of the documents
listed in subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the
Agreement. The Trustee makes no representations or warranties as to the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage Loan or the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
CITIBANK, N.A.,
as Trustee
By: _____________________________
Name: _______________________
Title: _______________________
EXHIBIT I
FORM OF TRANSFEREE'S LETTER
CHASE FUNDING, INC., CHASE FUNDING MORTGAGE LOAN
ASSET-BACKED CERTIFICATES, SERIES 1999-2
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Ladies and Gentlemen:
We propose to purchase Chase Funding, Inc., Chase Funding Mortgage
Loan Asset-Backed Certificates, Series 1999-2, Class R, described in the
Prospectus Supplement, dated June 16, 1999, and Prospectus, dated June 16, 1999.
1. We certify that (a) we are not a disqualified organization and
(b) we are not purchasing such Class R Certificates on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificates, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificates, and (d) we
intend to pay any taxes associated with holding the Class R Certificates as they
become due.
3. We acknowledge that we will be the beneficial owner of the
Class R Certificates and:1/
______ The Class R Certificates will be registered in
our name.
______ The Class R Certificates will be held in the
name of our nominee, _________________, which is
not a disqualified organization.
4. Unless Chase Funding, Inc. ("Chase Funding") has consented to
the transfer to us by executing the form of Consent affixed hereto as Appendix
B, we certify that we are a U.S. person; for this purpose the term "U.S. person"
means a citizen or resident of the United States, a corporation, or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any State thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to United States federal income tax regardless of
the source of its income, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more such U.S. persons have the authority to control all substantial decisions
of the trust (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons. We agree that any breach by us of this certification
shall render the transfer of any interest in the Class R Certificates to us
absolutely null and void and shall cause no rights in the Class R Certificates
to vest in us.
5. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificates, we will transfer such
interest in the Class R Certificates only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificates on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to Chase Funding a letter in the form of this letter
(including the affidavit appended hereto) and, if requested by Chase Funding, an
opinion of counsel (in a form acceptable to Chase Funding) that the proposed
transfer will not cause the interest in the Class R Certificates to be held by a
disqualified organization or a person who is not a U.S. person or (b) with the
written consent of Chase Funding.
--------------------
1/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
6. We hereby designate Chase Manhattan Mortgage Corporation as our
fiduciary to act as the tax matters person for the Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 1999-2 REMIC.
Very truly yours,
[PURCHASER]
By:_____________________________
Name:
Title:
Accepted as of __________ __, 199_
CHASE FUNDING, INC.
By:____________________________
Name:
Title:
APPENDIX A
Affidavit pursuant to (i)
Section 860E(e)(4) of the
Internal Revenue Code of
1986, as amended, and (ii)
certain provisions of the
Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
(1) He or she is an officer of ________________________ (the "Transferee"),
(2) the Transferee's Employee Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined below),
has no plan or intention of becoming a disqualified organization, and
is not acquiring any of its interest in the Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 1999-2, Class R
on behalf of a disqualified organization or any other entity,
(4) unless Chase Funding, Inc. ("Chase Funding") has consented to the
transfer to the Transferee by executing the form of Consent affixed as
Appendix B to the Transferee's Letter to which this Certificate is
affixed as Appendix A, the Transferee is a "U.S. person" (as defined
below),
(5) that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
(6) the Transferee has historically paid its debts as they became due,
(7) the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class R
Certificates, it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates,
(9) the Transferee intends to pay any taxes associated with holding the
Class R Certificates as they become due, and
(10) the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Chase Funding (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the
Class R Certificates will not be owned directly or indirectly by a
disqualified organization;
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (or other entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in or under the
laws of the United States or any political subdivision thereof, an estate that
is subject to United States federal income tax regardless of the source of its
income, or any trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more such
U.S. persons have the authority to control all substantial decisions of the
trust
___________________________________
By:________________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
_______________________________
________________________, Secretary
Personally appeared before me the above-named ______________, known or
proved to me to be the same person who executed the foregoing
instrument and to be the _______ of the Investor, and acknowledged to
me that he executed the same as his free act and deed and the free act
and deed of the Investor.
Subscribed and sworn before me this _____ day of ________ ____, 19__.
______________________________
Notary Public
County of ______
State of _______
My commission expires the __________ day of _________
By: __________________________
Name: ___________________
Title: ____________________
Dated: _____________
APPENDIX B
CONSENT
_________________________ (Transferee)
_________________________
_________________________
Ladies and Gentlemen:
Chase Funding, Inc. ("Chase Funding") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Chase Funding Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series 1999-2, Class R
described in the Transferee's Letter to which this Consent is appended,
notwithstanding Chase Funding's knowledge that the Transferee is not a U.S.
person (as defined in such Transferee's Letter).
CHASE FUNDING, INC.
Dated: ___________________________ By:______________________________
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS R CERTIFICATES
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Citibank, N.A., as Trustee
000 Xxxx Xxxxxx
0xx Xxxxx, Xxxx 0
Xxx Xxxx, XX 00000
RE: Chase Funding, Inc., Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 1999-2
Ladies and Gentlemen:
In connection with our disposition of the Class R Certificates, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act and
(c) if we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of June 1, 1999, among Chase Funding, Inc., as
Depositor, Advanta Mortgage Corp. USA as Subservicer, Chase Manhattan Mortgage
Corporation as Master Servicer and Citibank, N.A., as Trustee.
Very truly yours,
______________________________
Name of Transferor
By:___________________________
Name:
Title
EXHIBIT K
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 1999 among Chase
Funding, Inc. as depositor, Advanta Mortgage Corp. USA, as subservicer,
Chase Manhattan Mortgage Corporation, as master servicer and Citibank,
N.A., as trustee, Chase Funding, Inc., Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 1999-2 [Class B-]
---------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
1999-2, [Class B-] (the "Certificates"), issued pursuant to a pooling and
servicing agreement, dated as of June 1, 1999 (the "Pooling and Servicing
Agreement"), among Chase Funding, Inc. as depositor (the "Depositor"), Advanta
Mortgage Corp. USA as subservicer (the "Subservicer"), Chase Manhattan Mortgage
Corporation, as master servicer (the "Master Servicer") and Citibank, N.A., as
trustee (the "Trustee"). [The Purchaser intends to register the Transferred
Certificate in the name of ____________________, as nominee for
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser certifies, represents
and warrants to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have
not been registered or qualified under the Securities Act of 1933, as amended
(the "Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following
effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE "1940 ACT") OR ANY STATE
SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT, DIRECTLY OR
INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION
UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE
UNLESS THE MASTER SERVICER SHALL HAVE RECEIVED, IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER (A) AN
INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND
SALE OF THE CERTIFICATES.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
DEPOSITOR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION
LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT
THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE BENEFIT
PLAN (A "PLAN") WITHIN THE MEANING OF SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY
CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE
ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS
FOR THE PURCHASE OF THE CERTIFICATES IS AN "INSURANCE COMPANY
GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY
12, 1995), AND THE CONDITIONS SET FORTH IN SECTION I AND
SECTION III OF PTCE 95-60 ARE SATISFIED WITH RESPECT TO THE
PURCHASE AND HOLDING OF THE CERTIFICATES, OR (ii) IF THIS
CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A
PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (OR
COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY
SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO
THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED
TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN
ASSET REGULATIONS SET FORTH IN 29 CFR ss.2510.3-101 AND TO BE
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR
THE PROHIBITED TRANSACTION PROVISIONS OF THE CODE, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975
OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE
SUBSERVICER, THE MASTER SERVICER, THE DEPOSITOR OR ANY OF
THEIR AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE
CODE) RELATING TO THE CERTIFICATES.
3. The Purchaser is acquiring the Transferred Certificates for
its own account [for investment only]**/ and not with a view to or for sale or
other transfer in connection with any distribution of the Transferred
Certificates in any manner that would violate the Securities Act or any
applicable state securities laws, subject, nevertheless, to the understanding
that disposition of the Purchaser's property shall at all times be and remain
within its control.
4. The Purchaser (a) is a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters, and in particular in such matters related to securities
similar to the Certificates, such that it is capable of evaluating the merits
and risks of investment in the Certificates, (b) is able to bear the economic
risks of such an investment and (c) is an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
____________________
**/ Not required of a broker/dealer purchaser.
6. [This paragraph may be deleted if the Purchaser provides
the Opinion of Counsel referred to in clause (ii) of Section 5.02(b) of the
Pooling and Servicing Agreement.] The Purchaser either (A) is not an employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code")
(each, a "Plan"), and is not directly or indirectly purchasing any Certificate
on behalf of, as investment manager of, as named fiduciary of, as trustee of or
with assets of a Plan or directly or indirectly purchasing any certificates with
the assets of any insurance company separate account or of any Plan or (B) is an
insurance company and the source of funds for the purchase of the certificates
is an "insurance company general account" within the meaning of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12,
1995), and the conditions set forth in Section I and III of PTCE 95-60 are
satisfied with respect to the purchase and holding of the Certificates.
7. Prior to the sale or transfer by the Purchaser of any of
the Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit L to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Master
Servicer, the Subservicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:_____________________________
Name:
Title:
EXHIBIT L
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Chase Manhattan Mortgage Corporation
c/o The Chase Manhattan Bank
Global Trust Services
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 1999 among Chase
Funding, Inc. as depositor, Advanta Mortgage Corp., USA, as subservicer,
Chase Manhattan Mortgage Corporation, as master servicer and Citibank,
N.A., as trustee, Chase Funding, Inc., Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 1999-2 [Class B-]
---------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Asset-Backed Certificates, Series 1999-2, [Class
B-] (the "Certificates"), issued pursuant to a pooling and servicing agreement,
dated as of June 1, 1999 (the "Pooling and Servicing Agreement"), among Chase
Funding, Inc. as depositor (the "Depositor"), Advanta Mortgage Corp., USA, as
subservicer (the "Subservicer"), Chase Manhattan Mortgage Corporation, as master
servicer (AMaster Servicer@), and Citibank, N.A., as trustee (the "Trustee").
[The Purchaser intends to register the Transferred Certificate in the name of
____________________, as nominee for __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Trust
Agreement.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser certifies, represents
and warrants to, and covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Transferred Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Transferred
Certificates, (d) we are not an employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
or a plan within the meaning of Section 4975 of the Internal Revenue Code of
1986, as amended (each, a "Plan"), nor are we directly or indirectly purchasing
any Certificate on behalf of, as investment manager of, as named fiduciary of,
as trustee of or with assets of a Plan or directly or indirectly purchasing any
certificates with the assets of any insurance company separate account or of any
Plan [or alternatively, in the case of an insurance company, is an insurance
company and the source of funds for the purchase of the certificates] is an
"insurance company general account" within the meaning of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), 50 Fed. Reg. 35925 (July 12, 1995), and
the conditions set forth in Section I and Section III of PTCE 95-60 are
satisfied with respect to the purchase and holding of the Certificates, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
We agree to indemnify the Trustee, the Master Servicer, the Subservicer
and the Depositor against any liability that may result from any
misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:________________________________
Name:
Title:
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is
a "qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________*/ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by Federal, State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
--------------------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution,
which is supervised and examined by a State or Federal
authority having supervision over such institution or is
a foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached
hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as
amended.
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a
similar official or agency of the State, territory or
the District of Columbia.
____ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
____ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974, as amended.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958, as amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the
calculation of the dollar amount in paragraph 2 excludes: (i) securities of
issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:_______________________________
Name:
Title:
Date:_____________________________
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in Rule 144A because (i) the Buyer is
an investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than
the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in securities
(other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
To: Citibank, N.A.
000 Xxxx Xxxxxx
5th Floor, Zone 1
Xxx Xxxx, XX 00000 Citibank, N.A.
[and/or its designee]
Re:
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Loan Paid in Full (Subservicer hereby certifies that
all amounts received in connection therewith have been credited
to the Collection Account)
_______ 2. Mortgage Loan Liquidated (Subservicer hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have
been received and credited to the Collection Account
_______ 3. Mortgage Loan Repurchased pursuant to Section 2.03(c) of the
Pooling and Servicing Agreement
_______ 4. Mortgage Loan in Foreclosure
_______ 5. Mortgage Loan Repurchased or Substituted pursuant to the terms
of the Pooling and Servicing Agreement (Subservicer hereby
certifies that the Purchase Price or Substitution Adjustment
Amount has credited to the Collection Account)
_______ 6. Other
Reason:______________________________
By:__________________________________
(authorized signer)
Address:_____________________________
Date:________________________________
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee [or Trustee's designee], please acknowledge your
receipt by signing in the space indicated below, and returning this form.
Trustee
Citibank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
__________________________________ _______________________________
Signature Date
Documents returned to Trustee:
__________________________________ _______________________________
Trustee Date
EXHIBIT N
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated
_________, 1999 (the "Instrument"), between Chase Funding, Inc., as seller (the
"Depositor"), and Citibank, N.A., as trustee of the Chase Funding, Mortgage Loan
Asset Backed Certificates, Series 1999-2, as purchaser (the "Trustee"), and
pursuant to the Pooling and Servicing Agreement, dated as of June 1, 1999 (the
"Pooling and Servicing Agreement"), among the Depositor as depositor, Advanta
Mortgage Corp. USA, as subservicer, Chase Manhattan Mortgage Corporation, as
master servicer, and the Trustee as trustee, on behalf of the Trust Fund, of the
Mortgage Loans listed on the attached Schedule of Mortgage Loans (the
"Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Subsequent Mortgage Loans.
(a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee, on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however, that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Instrument, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule attached hereto as
Exhibit B shall be absolute and is intended by the Depositor, the Master
Servicer, the Trustee and the Certificateholders to constitute and to be treated
as a sale by the Depositor to the Trust Fund.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as seller, to the extent of the Subsequent
Mortgage Loans, a copy of which agreement is annexed hereto as Attachment G.
(c) Additional terms of the sale are set forth on Attachment A
hereto.
Section 2. Representations and Warranties; Conditions
Precedent.
(a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Sections 2.03 and
2.10 of the Pooling and Servicing Agreement are satisfied as of the date hereof
with respect to the Subsequent Mortgage Loans.
(b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
[Master Servicer] at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. Governing Law.
This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.
CHASE FUNDING, INC.
By:______________________________________
Name:
Title:
CITIBANK, N.A.,
as Trustee for Chase Funding Mortgage Loan
Asset Backed Certificates, Series 1999-2
By:_______________________________________
Name:
Title:
Attachments
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Depositor's Officer's certificate.
D. Opinions of Depositor's counsel (bankruptcy, corporate).
E. Trustee's Certificate.
F. Opinion of Trustee's Counsel.
G. Subsequent Mortgage Loan Purchase Agreement.
ATTACHMENT A
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: ___________ 1, 1999
2. Subsequent Transfer Date: ____________, 1999
3. Aggregate Principal Balance of the Subsequent Mortgage Loans as
of the Subsequent Cut-off Date: $___________
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date shall be
true and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cutoff Date (except with respect to 1.5%
of the Subsequent Mortgage Loans, by aggregate principal balance as of the
related Subsequent Cut-off Date, which may be 30 or more days delinquent but
less than 60 days delinquent as of the related Cut-off Date); (ii) the stated
term to maturity of the Subsequent Mortgage Loan will not be less than 120
months and will not exceed 360 months; (iii) the Subsequent Mortgage Loan may
not provide for negative amortization; (iv) the Subsequent Mortgage Loan will
not have a Loan-to-Value Ratio greater than 95.0%; (v) the Subsequent Mortgage
Loans will have as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 6 months; (vi) the Subsequent Mortgage Loan must
have a first Monthly Payment due on or before October 1, 1999; and (vii) the
Subsequent Mortgage Loan shall be underwritten in accordance with the criteria
set forth under the section "Chase Manhattan Mortgage Corporation--Underwriting
Standards" in the Prospectus Supplement.
C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the related Subsequent Mortgage Loans) will
as of the Subsequent Cut-off Date not be materially inconsistent with the
Initial Mortgage Loans. Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by either Rating Agency if the inclusion of such Subsequent
Mortgage Loan would adversely affect the ratings on any class of Offered
Certificates.
EXHIBIT O
FORM OF ADDITION NOTICE
[Date]
Citibank, N.A., as trustee
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxx 1
Xxx Xxxx, Xxx Xxxx 00000
The Chase Manhattan Bank, as paying agent
Capital Markets Fiduciary Services
000 X. 00xx Xx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Chase Manhattan Mortgage Corporation, as master servicer
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of June 1, 1999, among
Chase Funding, Inc., Chase Manhattan Mortgage Corporation, Advanta
Mortgage Corp. USA and Citibank, N.A., relating to Chase Funding Mortgage
Loan Asset Backed Certificates, Series 1999-2
-------------------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.10 of the referenced Pooling and
Servicing Agreement, Chase Funding, Inc. has designated Subsequent Mortgage
Loans to be included in Loan Group __ to be sold to the Trust Fund on [DATE],
with an aggregate principal balance of $___________________, which Subsequent
Mortgage Loans have not been rejected by the Rating Agencies pursuant to Section
2.10(e) of the Pooling and Servicing Agreement. Capitalized terms not otherwise
defined herein have the meaning set forth in the Pooling and Servicing
Agreement.
Please acknowledge your receipt of this notice by
countersigning the enclosed copy in the space indicated below and returning it
to the attention of the undersigned.
Very truly yours,
CHASE FUNDING, INC.
By:____________________________
Name:
Title:
Acknowledged and Agreed:
CITIBANK, N.A.
By:______________________
Name:
Title:
