<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 28, 1998
------------
Union Planters Mortgage Finance Corp.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 333-35471 62-1712370
-------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7130 Goodlett Farms Parkway, Cordova, Tennessee 38018
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (901) 580-6000
---------------
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
Item 5. Other Events.
On May 28, 1998, the Registrant caused the issuance and sale of
$380,958,124 aggregate initial principal amount of Mortgage Pass-Through
Certificates, Series 1998-1 (the "Certificates") pursuant to the Series 1998-A
Pooling and Servicing Agreement, dated as of May 1, 1998 (the "Pooling and
Servicing Agreement"), among the Registrant, Union Planters Bank, N.A., as
Master Servicer, The Bank of New York, as Contract of Insurance Holder, and The
Bank of New York, as Trustee, and the related Standard Terms to the Pooling and
Servicing Agreement (May 1998 Edition) (the "Standard Terms"). The Certificates
were issued in fourteen Classes with Pass-Through Rates and initial Certificate
Principal Balances as set forth below:
<TABLE>
<CAPTION>
INITIAL FINAL
CERTIFICATE SCHEDULED
PRINCIPAL PASS THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(5)
----------- ------------- ------------ -------------
<S> <C> <C> <C>
A-1 $ 198,644,000 6.350% June 15, 2028
A-2 $ 19,915,000 6.450% June 15, 2028
A-3 $ 66,363,000 6.600% June 15, 2028
A-4 $ 66,347,000 6.800% June 15, 2028
A-5 $ 19,160,000 6.750% June 15, 2028
B-1 $ 1,904,000 6.950% June 15, 2028
B-2 $ 952,000 6.950% June 15, 2028
B-3 $ 952,000 6.950% June 15, 2028
B-4 $ 1,904,000 6.950% June 15, 2028
B-5 $ 1,904,000 6.950% June 15, 2028
B-6 $ 2,913,024 6.950% June 15, 2028
X-1 (1) (2) June 15, 2028
X-2 (1) (3) June 15, 2028
R(4) $ 100 6.950% June 15, 2028
</TABLE>
(1) Each of the Class X-1 and Class X-2 Certificates shall
have no Certificate Principal Balance, and will bear interest based on
their Notional Principal Amount of $380,958,124.
(2) The Pass-Through Rate for the Class X-1 Certificates on
each Distribution Date will be equal to the product of (a) the excess of
(i) the Weighted Average of the Pass-Through Rate on the Subaccounts for
such Distribution Date over (ii) 6.950% per annum and (b) 0.52356.
(3) The Class X-2 Certificates represent beneficial ownership
of the Class X-2 Components. The Class X-2 Certificates have no
Pass-Through Rate, but will be entitled to receive, on each Distribution
Date, the Class X-2 Component Interest Amount.
(4) The Class R Certificates shall represent the beneficial
ownership of the residual interest in both the Pooling REMIC and the
Issuing REMIC. Following the division of the Class R Certificates into
two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-1
registered Certificates shall have a Certificate Principal Balance of
$100 (unless previously paid) and a Pass-Through Rate of 6.950%, and
shall represent the residual interest in the Issuing REMIC, the Class
R-2 Certificates shall have no Certificate Principal Balance and no
Pass-Through Rate and shall represent the residual interest in the
Pooling REMIC.
(5) For purposes of Treasury Regulation ss.1.860G-1(a)(4), the
latest possible maturity date of each Class of Certificates shall be the
Final Scheduled Distribution Date.
<PAGE> 3
The Certificates evidence, in the aggregate, the entire beneficial
ownership interest in UPMFC Trust 1998-1 (the "Trust"), which consists primarily
of a pool of Mortgage Loans transferred to the Trust by the Registrant pursuant
to the Pooling and Servicing Agreement. The Mortgage were purchased by the
Registrant in a privately-negotiated transaction with Union Planters Bank, N.A.,
a national banking association (the "Bank") pursuant to a Sales Agreement, dated
as of May 1, 1998, between the Registrant and the Bank. Elections will be made
to treat certain assets owned by the Trust as "real estate mortgage investment
conduits" (each, a "REMIC") under the Internal Revenue Code of 1986, as amended.
The Certificates, except for the Class R Certificates, will be designated as the
"regular interests" in one of such REMICs. The Class R Certificates will be
designated as the "residual interests" in each of the REMICs.
The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, and Class X-1
Certificates are collectively referred to herein as the "Offered Certificates."
Each Class of Offered Certificates are senior to the Class B Certificates. The
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class X-1, Class X-2 and
Class R Certificates are senior to the Class B Certificates.
The Offered Certificates have been sold by the Registrant to Morgan
Stanley & Co. Incorporated (the "Underwriter") pursuant to an Underwriting
Agreement dated May 13, 1998, among the Underwriter, the Registrant and the
Bank. The Class X-2 Certificates have been transferred to the Bank, an affiliate
of the Registrant. The Class B and Class R Certificates have been transferred to
Union Planters Corporation, a Tennessee corporation and an affiliate of the
Registrant.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement or, if not defined in
the Pooling and Servicing Agreement, the meanings assigned to them in the
Standard Terms.
The description of the Mortgage Loans transferred to the Trustee
pursuant to the Pooling and Servicing Agreement begins on the next page. The
amounts contained in the following tables have been rounded to the nearest
dollar amount or percentage, as applicable, except as necessary in order for the
column to sum to the total listed.
<PAGE> 4
1. MORTGAGE RATES (%)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
MORTGAGE RATES (%) LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------------------------------------------------------------------
<S> <C> <C> <C>
7.501 - 8.000 313 12,280,979 3.22
- --------------------------------------------------------------------------
8.001 - 8.500 1,307 44,465,291 11.67
- --------------------------------------------------------------------------
8.501 - 9.000 1,095 50,486,955 13.25
- --------------------------------------------------------------------------
9.001 - 9.500 1,941 95,223,444 25.00
- --------------------------------------------------------------------------
9.501 - 10.000 1,442 69,847,290 18.33
- --------------------------------------------------------------------------
10.001 - 10.500 1,008 48,836,380 12.82
- --------------------------------------------------------------------------
10.501 - 11.000 297 13,888,725 3.65
- --------------------------------------------------------------------------
11.001 - 11.500 405 16,745,508 4.40
- --------------------------------------------------------------------------
11.501 - 12.000 276 10,185,043 2.67
- --------------------------------------------------------------------------
12.001 - 12.500 219 8,353,176 2.19
- --------------------------------------------------------------------------
12.501 - 13.000 177 5,755,193 1.51
- --------------------------------------------------------------------------
13.001 - 13.500 67 2,202,102 0.58
- --------------------------------------------------------------------------
13.501 - 14.000 50 1,322,156 0.35
- --------------------------------------------------------------------------
14.001 - 14.500 2 69,331 0.02
- --------------------------------------------------------------------------
14.501 - 15.000 7 165,245 0.04
- --------------------------------------------------------------------------
15.001 - 15.500 36 867,858 0.23
- --------------------------------------------------------------------------
16.001 - 16.500 5 157,812 0.04
- --------------------------------------------------------------------------
17.001 - 17.500 4 105,638 0.03
- --------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- --------------------------------------------------------------------------
</TABLE>
Wtd Avg: 9.87
<PAGE> 5
Top
- --------------------------------------------------------------------------------
2. PROPERTY TYPE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
PROPERTY TYPE LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Not Available 4,755 206,416,649 54.18
- --------------------------------------------------------------------------------
Single Family Detached 3,739 166,182,349 43.62
- --------------------------------------------------------------------------------
Condo 101 5,022,044 1.32
- --------------------------------------------------------------------------------
Townhouse 33 1,875,165 0.49
- --------------------------------------------------------------------------------
2-4 Family 21 1,277,053 0.34
- --------------------------------------------------------------------------------
Prefabricated 2 184,865 0.05
- --------------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- --------------------------------------------------------------------------------
</TABLE>
Top
- --------------------------------------------------------------------------------
3. PRINCIPAL BALANCES AS OF THE CUT-OFF DATE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
PRINCIPAL BALANCES MORTGAGE BALANCE AS OF BALANCE AS OF
AS OF THE CUT-OFF DATE LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
0.01 - 10,000.00 309 2,052,236 0.54
- ---------------------------------------------------------------------------------
10,000.01 - 20,000.00 1,144 17,364,825 4.56
- ---------------------------------------------------------------------------------
20,000.01 - 30,000.00 1,144 28,668,359 7.53
- ---------------------------------------------------------------------------------
30,000.01 - 40,000.00 1,301 45,725,904 12.00
- ---------------------------------------------------------------------------------
40,000.01 - 50,000.00 1,409 63,404,758 16.64
- ---------------------------------------------------------------------------------
50,000.01 - 60,000.00 1,283 70,558,018 18.52
- ---------------------------------------------------------------------------------
60,000.01 - 70,000.00 1,023 66,026,790 17.33
- ---------------------------------------------------------------------------------
70,000.01 - 80,000.00 530 39,545,866 10.38
- ---------------------------------------------------------------------------------
80,000.01 - 90,000.00 261 21,886,545 5.75
- ---------------------------------------------------------------------------------
90,000.01 - 100,000.00 127 12,047,302 3.16
- ---------------------------------------------------------------------------------
100,000.01 - 110,000.00 57 5,939,500 1.56
- ---------------------------------------------------------------------------------
110,000.01 - 120,000.00 30 3,422,686 0.90
- ---------------------------------------------------------------------------------
120,000.01 - 130,000.00 20 2,469,973 0.65
- ---------------------------------------------------------------------------------
130,000.01 - 140,000.00 7 933,036 0.24
- ---------------------------------------------------------------------------------
140,000.01 - 150,000.00 3 430,280 0.11
- ---------------------------------------------------------------------------------
150,000.01 - 160,000.00 2 309,201 0.08
- ---------------------------------------------------------------------------------
170,000.01 - 180,000.00 1 172,846 0.05
- ---------------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- ---------------------------------------------------------------------------------
</TABLE>
Average: 44,036
<PAGE> 6
Top
- --------------------------------------------------------------------------------
4. ORIGINAL TERM
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
ORIGINAL TERM LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------------------------------------------------------------
<S> <C> <C> <C>
121 - 180 197 4,449,958 1.17
- --------------------------------------------------------------------
181 - 240 63 1,484,945 0.39
- --------------------------------------------------------------------
241 - 300 295 7,039,266 1.85
- --------------------------------------------------------------------
301 - 360 8,096 367,983,955 96.59
- --------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- --------------------------------------------------------------------
</TABLE>
Wtd Avg: 356
Top
- --------------------------------------------------------------------------------
5. MORTGAGE LOAN OCCUPANCY TYPE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
MORTGAGE LOAN OCCUPANCY TYPE LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Owner Occupied 7,794 345,883,634 90.79
- -----------------------------------------------------------------------------------
Non-Owner Occupied 715 28,668,335 7.53
- -----------------------------------------------------------------------------------
Not Available 101 4,431,733 1.16
- -----------------------------------------------------------------------------------
Other 41 1,974,423 0.52
- -----------------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- -----------------------------------------------------------------------------------
</TABLE>
Top
- --------------------------------------------------------------------------------
6. REMAINING TERM TO MATURITY IN MONTHS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
REMAINING TERM NUMBER OF PRINCIPAL PRINCIPAL
TO MATURITY MORTGAGE BALANCE AS OF BALANCE AS OF
IN MONTHS LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- --------------------------------------------------------------------
<S> <C> <C> <C>
1 - 12 9 32,290 0.01
- --------------------------------------------------------------------
13 - 24 28 181,969 0.05
- --------------------------------------------------------------------
25 - 36 93 648,199 0.17
- --------------------------------------------------------------------
37 - 48 85 1,189,516 0.31
- --------------------------------------------------------------------
49 - 60 75 1,192,426 0.31
- --------------------------------------------------------------------
61 - 72 103 1,404,295 0.37
- --------------------------------------------------------------------
73 - 84 94 1,390,033 0.36
- --------------------------------------------------------------------
85 - 96 188 3,126,925 0.82
- --------------------------------------------------------------------
97 - 108 340 5,911,313 1.55
- --------------------------------------------------------------------
109 - 120 477 9,835,193 2.58
- --------------------------------------------------------------------
121 - 132 418 10,192,294 2.68
- --------------------------------------------------------------------
133 - 144 405 12,573,138 3.30
- --------------------------------------------------------------------
145 - 156 151 5,419,676 1.42
- --------------------------------------------------------------------
157 - 168 97 4,193,775 1.10
- --------------------------------------------------------------------
169 - 180 238 9,220,330 2.42
- --------------------------------------------------------------------
181 - 192 323 13,470,710 3.54
- --------------------------------------------------------------------
193 - 204 134 5,649,296 1.48
- --------------------------------------------------------------------
205 - 216 672 35,030,661 9.20
- --------------------------------------------------------------------
217 - 228 1,787 99,244,470 26.05
- --------------------------------------------------------------------
229 - 240 995 50,618,343 13.29
- --------------------------------------------------------------------
241 - 252 588 29,641,208 7.78
- --------------------------------------------------------------------
253 - 264 382 21,290,772 5.59
- --------------------------------------------------------------------
265 - 276 267 14,641,006 3.84
- --------------------------------------------------------------------
277 - 288 308 18,647,738 4.89
- --------------------------------------------------------------------
289 - 300 252 16,174,809 4.25
- --------------------------------------------------------------------
301 - 312 70 4,937,715 1.30
- --------------------------------------------------------------------
313 - 324 61 4,255,526 1.12
- --------------------------------------------------------------------
325 - 336 11 844,497 0.22
- --------------------------------------------------------------------
Total: 8,651 380,958,124 100.00
- --------------------------------------------------------------------
</TABLE>
Wtd Avg: 219
<PAGE> 7
Top
- --------------------------------------------------------------------------------
7. YEAR OF ORIGINATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
YEAR OF ORIGINATION LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------------------------------------------------------------------
<S> <C> <C> <C>
1970 34 137,940 0.04
- ------------------------------------------------------------------------
1971 13 121,046 0.03
- ------------------------------------------------------------------------
1973 33 324,120 0.09
- ------------------------------------------------------------------------
1974 55 651,163 0.17
- ------------------------------------------------------------------------
1975 131 1,734,348 0.46
- ------------------------------------------------------------------------
1976 310 4,474,062 1.17
- ------------------------------------------------------------------------
1977 456 8,163,231 2.14
- ------------------------------------------------------------------------
1978 379 8,280,671 2.17
- ------------------------------------------------------------------------
1979 535 15,355,254 4.03
- ------------------------------------------------------------------------
1980 207 6,389,669 1.68
- ------------------------------------------------------------------------
1981 52 1,793,375 0.47
- ------------------------------------------------------------------------
1982 111 3,602,205 0.95
- ------------------------------------------------------------------------
1983 411 16,038,013 4.21
- ------------------------------------------------------------------------
1984 159 5,662,119 1.49
- ------------------------------------------------------------------------
1985 377 17,638,390 4.63
- ------------------------------------------------------------------------
1986 1,662 89,351,588 23.45
- ------------------------------------------------------------------------
1987 1,430 74,746,258 19.62
- ------------------------------------------------------------------------
1988 769 37,097,279 9.74
- ------------------------------------------------------------------------
1989 429 23,408,571 6.14
- ------------------------------------------------------------------------
1990 259 13,637,819 3.58
- ------------------------------------------------------------------------
1991 299 17,950,444 4.71
- ------------------------------------------------------------------------
1992 332 19,989,040 5.25
- ------------------------------------------------------------------------
1993 118 8,046,772 2.11
- ------------------------------------------------------------------------
1994 73 5,215,137 1.37
- ------------------------------------------------------------------------
1995 17 1,149,611 0.30
- ------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- ------------------------------------------------------------------------
</TABLE>
Top
- --------------------------------------------------------------------------------
8. YEAR OF MATURITY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
YEAR OF MATURITY LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ---------------------------------------------------------------------
<S> <C> <C> <C>
1998 4 9,493 0.00
- ---------------------------------------------------------------------
1999 16 78,388 0.02
- ---------------------------------------------------------------------
2000 66 435,420 0.11
- ---------------------------------------------------------------------
2001 102 1,123,269 0.29
- ---------------------------------------------------------------------
2002 77 1,164,642 0.31
- ---------------------------------------------------------------------
2003 95 1,316,731 0.35
- ---------------------------------------------------------------------
2004 90 1,312,868 0.34
- ---------------------------------------------------------------------
2005 134 2,192,724 0.58
- ---------------------------------------------------------------------
2006 314 5,378,770 1.41
- ---------------------------------------------------------------------
2007 435 8,410,121 2.21
- ---------------------------------------------------------------------
2008 398 9,208,303 2.42
- ---------------------------------------------------------------------
2009 508 14,833,705 3.89
- ---------------------------------------------------------------------
2010 197 6,400,775 1.68
- ---------------------------------------------------------------------
2011 63 2,608,114 0.68
- ---------------------------------------------------------------------
2012 141 5,725,031 1.50
- ---------------------------------------------------------------------
2013 396 16,185,143 4.25
- ---------------------------------------------------------------------
2014 142 5,616,547 1.47
- ---------------------------------------------------------------------
2015 322 15,688,635 4.12
- ---------------------------------------------------------------------
2016 1,474 80,739,014 21.19
- ---------------------------------------------------------------------
2017 1,439 77,778,253 20.42
- ---------------------------------------------------------------------
2018 742 36,366,520 9.55
- ---------------------------------------------------------------------
2019 430 23,515,262 6.17
- ---------------------------------------------------------------------
2020 248 13,211,068 3.47
- ---------------------------------------------------------------------
2021 296 17,752,423 4.66
- ---------------------------------------------------------------------
2022 304 18,547,237 4.87
- ---------------------------------------------------------------------
2023 131 9,062,492 2.38
- ---------------------------------------------------------------------
2024 69 5,089,006 1.34
- ---------------------------------------------------------------------
2025 18 1,208,170 0.32
- ---------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- ---------------------------------------------------------------------
</TABLE>
<PAGE> 8
Top
- --------------------------------------------------------------------------------
9. ORIGINAL LOAN-TO-VALUE RATIO (%)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
ORIGINAL MORTGAGE BALANCE AS OF BALANCE AS OF
LOAN-TO-VALUE RATIO (%) LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Not Available 4,179 156,103,311 40.98
- ----------------------------------------------------------------------------
20.001 - 30.000 4 148,622 0.04
- ----------------------------------------------------------------------------
30.001 - 40.000 8 289,748 0.08
- ----------------------------------------------------------------------------
40.001 - 50.000 10 366,911 0.10
- ----------------------------------------------------------------------------
50.001 - 60.000 26 993,630 0.26
- ----------------------------------------------------------------------------
60.001 - 70.000 39 1,934,330 0.51
- ----------------------------------------------------------------------------
70.001 - 80.000 116 5,335,847 1.40
- ----------------------------------------------------------------------------
80.001 - 85.000 113 5,731,302 1.50
- ----------------------------------------------------------------------------
85.001 - 90.000 282 15,240,232 4.00
- ----------------------------------------------------------------------------
90.001 - 95.000 416 22,028,428 5.78
- ----------------------------------------------------------------------------
95.001 - 100.000 1,921 92,329,271 24.24
- ----------------------------------------------------------------------------
100.001 -105.000 1,537 80,456,494 21.12
- ----------------------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- ----------------------------------------------------------------------------
</TABLE>
Wtd Avg: 96.67
Top
- --------------------------------------------------------------------------------
10. GEOGRAPHIC DISTRIBUTION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
GEOGRAPHIC DISTRIBUTION LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Texas 2,052 93,140,440 24.45
- ------------------------------------------------------------------------------
California 954 53,777,027 14.12
- ------------------------------------------------------------------------------
Florida 882 41,492,085 10.89
- ------------------------------------------------------------------------------
Arizona 385 19,030,107 5.00
- ------------------------------------------------------------------------------
New York 430 13,801,637 3.62
- ------------------------------------------------------------------------------
Georgia 302 13,741,394 3.61
- ------------------------------------------------------------------------------
Tennessee 278 11,337,730 2.98
- ------------------------------------------------------------------------------
Louisiana 234 10,870,474 2.85
- ------------------------------------------------------------------------------
Colorado 203 10,310,402 2.71
- ------------------------------------------------------------------------------
Illinois 199 10,195,998 2.68
- ------------------------------------------------------------------------------
Virginia 206 9,211,419 2.42
- ------------------------------------------------------------------------------
Minnesota 219 8,769,790 2.30
- ------------------------------------------------------------------------------
New Jersey 230 7,285,481 1.91
- ------------------------------------------------------------------------------
Oklahoma 166 7,235,670 1.90
- ------------------------------------------------------------------------------
Nebraska 203 6,967,953 1.83
- ------------------------------------------------------------------------------
Ohio 213 6,754,365 1.77
- ------------------------------------------------------------------------------
Pennsylvania 230 5,742,449 1.51
- ------------------------------------------------------------------------------
Maryland 92 4,799,304 1.26
- ------------------------------------------------------------------------------
Kansas 119 4,736,926 1.24
- ------------------------------------------------------------------------------
North Carolina 92 4,219,138 1.11
- ------------------------------------------------------------------------------
Washington 117 3,961,703 1.04
- ------------------------------------------------------------------------------
Missouri 101 3,775,306 0.99
- ------------------------------------------------------------------------------
Nevada 75 3,714,957 0.98
- ------------------------------------------------------------------------------
Alabama 116 3,626,499 0.95
- ------------------------------------------------------------------------------
Indiana 66 2,610,961 0.69
- ------------------------------------------------------------------------------
Mississippi 56 2,477,088 0.65
- ------------------------------------------------------------------------------
South Carolina 58 2,122,867 0.56
- ------------------------------------------------------------------------------
Arkansas 57 1,837,764 0.48
- ------------------------------------------------------------------------------
Michigan 42 1,302,586 0.34
- ------------------------------------------------------------------------------
Iowa 40 1,274,909 0.33
- ------------------------------------------------------------------------------
Wisconsin 27 1,094,719 0.29
- ------------------------------------------------------------------------------
District of Columbia 28 1,062,022 0.28
- ------------------------------------------------------------------------------
Utah 20 950,791 0.25
- ------------------------------------------------------------------------------
Alaska 11 836,803 0.22
- ------------------------------------------------------------------------------
New Mexico 16 832,580 0.22
- ------------------------------------------------------------------------------
Kentucky 20 715,299 0.19
- ------------------------------------------------------------------------------
Montana 16 668,143 0.18
- ------------------------------------------------------------------------------
Connecticut 9 662,098 0.17
- ------------------------------------------------------------------------------
Massachusetts 7 605,043 0.16
- ------------------------------------------------------------------------------
Oregon 16 600,354 0.16
- ------------------------------------------------------------------------------
Wyoming 13 569,094 0.15
- ------------------------------------------------------------------------------
Delaware 8 367,743 0.10
- ------------------------------------------------------------------------------
Maine 7 296,924 0.08
- ------------------------------------------------------------------------------
Hawaii 3 291,417 0.08
- ------------------------------------------------------------------------------
Rhode Island 3 285,573 0.07
- ------------------------------------------------------------------------------
Idaho 7 279,136 0.07
- ------------------------------------------------------------------------------
South Dakota 6 248,335 0.07
- ------------------------------------------------------------------------------
New Hampshire 3 222,622 0.06
- ------------------------------------------------------------------------------
West Virginia 12 214,269 0.06
- ------------------------------------------------------------------------------
North Dakota 2 30,731 0.01
- ------------------------------------------------------------------------------
Total: 8,651 380,958,124 100.00
- ------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
Top
- --------------------------------------------------------------------------------
11. LOAN TYPE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
MORTGAGE BALANCE AS OF BALANCE AS OF
LOAN TYPE LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ----------------------------------------------------------------
<S> <C> <C> <C>
FHA 5,884 265,807,365 69.77
- ----------------------------------------------------------------
VA 2,767 115,150,759 30.23
- ----------------------------------------------------------------
TOTAL: 8,651 380,958,124 100.00
- ----------------------------------------------------------------
</TABLE>
Top
- --------------------------------------------------------------------------------
12. GEOGRAPHIC DISTRIBUTION FHA LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
GEOGRAPHIC NUMBER OF PRINCIPAL PRINCIPAL
DISTRIBUTION MORTGAGE BALANCE AS OF BALANCE AS OF
FHA LOANS LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Texas 1,380 62,989,400 23.70
- ------------------------------------------------------------------------------
California 628 35,559,412 13.38
- ------------------------------------------------------------------------------
Florida 683 33,453,879 12.59
- ------------------------------------------------------------------------------
Arizona 272 13,863,503 5.22
- ------------------------------------------------------------------------------
New York 319 11,233,012 4.23
- ------------------------------------------------------------------------------
Georgia 220 10,330,765 3.89
- ------------------------------------------------------------------------------
Tennessee 218 9,315,127 3.50
- ------------------------------------------------------------------------------
Illinois 144 7,582,423 2.85
- ------------------------------------------------------------------------------
Louisiana 166 7,438,913 2.80
- ------------------------------------------------------------------------------
Colorado 128 6,920,463 2.60
- ------------------------------------------------------------------------------
Minnesota 138 6,138,648 2.31
- ------------------------------------------------------------------------------
Oklahoma 141 6,097,368 2.29
- ------------------------------------------------------------------------------
Ohio 137 4,841,282 1.82
- ------------------------------------------------------------------------------
Virginia 100 4,621,246 1.74
- ------------------------------------------------------------------------------
New Jersey 131 4,202,530 1.58
- ------------------------------------------------------------------------------
Pennsylvania 155 3,919,400 1.47
- ------------------------------------------------------------------------------
Nebraska 119 3,733,134 1.40
- ------------------------------------------------------------------------------
Kansas 82 3,257,097 1.23
- ------------------------------------------------------------------------------
Maryland 55 3,075,529 1.16
- ------------------------------------------------------------------------------
Nevada 55 2,673,648 1.01
- ------------------------------------------------------------------------------
North Carolina 52 2,557,007 0.96
- ------------------------------------------------------------------------------
Washington 76 2,509,283 0.94
- ------------------------------------------------------------------------------
Missouri 67 2,470,512 0.93
- ------------------------------------------------------------------------------
Alabama 64 2,126,735 0.80
- ------------------------------------------------------------------------------
Mississippi 43 1,987,867 0.75
- ------------------------------------------------------------------------------
Indiana 49 1,920,447 0.72
- ------------------------------------------------------------------------------
South Carolina 31 1,247,284 0.47
- ------------------------------------------------------------------------------
Arkansas 33 1,096,222 0.41
- ------------------------------------------------------------------------------
Iowa 29 1,018,622 0.38
- ------------------------------------------------------------------------------
Michigan 31 972,535 0.37
- ------------------------------------------------------------------------------
Utah 18 939,427 0.35
- ------------------------------------------------------------------------------
District of Columbia 15 676,814 0.25
- ------------------------------------------------------------------------------
Alaska 7 620,101 0.23
- ------------------------------------------------------------------------------
Montana 15 619,319 0.23
- ------------------------------------------------------------------------------
New Mexico 12 565,126 0.21
- ------------------------------------------------------------------------------
Oregon 11 444,570 0.17
- ------------------------------------------------------------------------------
Wisconsin 13 419,407 0.16
- ------------------------------------------------------------------------------
Connecticut 6 381,962 0.14
- ------------------------------------------------------------------------------
Kentucky 10 342,271 0.13
- ------------------------------------------------------------------------------
Wyoming 6 316,742 0.12
- ------------------------------------------------------------------------------
Delaware 5 243,301 0.09
- ------------------------------------------------------------------------------
Rhode Island 2 226,943 0.09
- ------------------------------------------------------------------------------
Idaho 5 223,227 0.08
- ------------------------------------------------------------------------------
Maine 5 202,950 0.08
- ------------------------------------------------------------------------------
Hawaii 1 172,846 0.07
- ------------------------------------------------------------------------------
Massachusetts 2 153,999 0.06
- ------------------------------------------------------------------------------
West Virginia 3 68,768 0.03
- ------------------------------------------------------------------------------
South Dakota 1 26,115 0.01
- ------------------------------------------------------------------------------
North Dakota 1 10,183 0.00
- ------------------------------------------------------------------------------
TOTAL: 5,884 265,807,365 100.00
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</TABLE>
<PAGE> 10
Top
- --------------------------------------------------------------------------------
13. GEOGRAPHIC DISTRIBUTION VA LOANS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
PERCENT BY
AGGREGATE AGGREGATE
GEOGRAPHIC NUMBER OF PRINCIPAL PRINCIPAL
DISTRIBUTION MORTGAGE BALANCE AS OF BALANCE AS OF
VA LOANS LOANS THE CUT-OFF DATE THE CUT-OFF DATE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
Texas 672 30,151,040 26.18
- -------------------------------------------------------------------------------
California 326 18,217,616 15.82
- -------------------------------------------------------------------------------
Florida 199 8,038,206 6.98
- -------------------------------------------------------------------------------
Arizona 113 5,166,605 4.49
- -------------------------------------------------------------------------------
Virginia 106 4,590,173 3.99
- -------------------------------------------------------------------------------
Louisiana 68 3,431,560 2.98
- -------------------------------------------------------------------------------
Georgia 82 3,410,629 2.96
- -------------------------------------------------------------------------------
Colorado 75 3,389,938 2.94
- -------------------------------------------------------------------------------
Nebraska 84 3,234,819 2.81
- -------------------------------------------------------------------------------
New Jersey 99 3,082,951 2.68
- -------------------------------------------------------------------------------
Minnesota 81 2,631,142 2.28
- -------------------------------------------------------------------------------
Illinois 55 2,613,575 2.27
- -------------------------------------------------------------------------------
New York 111 2,568,625 2.23
- -------------------------------------------------------------------------------
Tennessee 60 2,022,602 1.76
- -------------------------------------------------------------------------------
Ohio 76 1,913,083 1.66
- -------------------------------------------------------------------------------
Pennsylvania 75 1,823,049 1.58
- -------------------------------------------------------------------------------
Maryland 37 1,723,775 1.50
- -------------------------------------------------------------------------------
North Carolina 40 1,662,130 1.44
- -------------------------------------------------------------------------------
Alabama 52 1,499,764 1.30
- -------------------------------------------------------------------------------
Kansas 37 1,479,830 1.29
- -------------------------------------------------------------------------------
Washington 41 1,452,420 1.26
- -------------------------------------------------------------------------------
Missouri 34 1,304,793 1.13
- -------------------------------------------------------------------------------
Oklahoma 25 1,138,302 0.99
- -------------------------------------------------------------------------------
Nevada 20 1,041,309 0.90
- -------------------------------------------------------------------------------
South Carolina 27 875,583 0.76
- -------------------------------------------------------------------------------
Arkansas 24 741,542 0.64
- -------------------------------------------------------------------------------
Indiana 17 690,514 0.60
- -------------------------------------------------------------------------------
Wisconsin 14 675,311 0.59
- -------------------------------------------------------------------------------
Mississippi 13 489,222 0.42
- -------------------------------------------------------------------------------
Massachusetts 5 451,044 0.39
- -------------------------------------------------------------------------------
District of Columbia 13 385,208 0.33
- -------------------------------------------------------------------------------
Kentucky 10 373,027 0.32
- -------------------------------------------------------------------------------
Michigan 11 330,050 0.29
- -------------------------------------------------------------------------------
Connecticut 3 280,137 0.24
- -------------------------------------------------------------------------------
New Mexico 4 267,454 0.23
- -------------------------------------------------------------------------------
Iowa 11 256,287 0.22
- -------------------------------------------------------------------------------
Wyoming 7 252,352 0.22
- -------------------------------------------------------------------------------
New Hampshire 3 222,622 0.19
- -------------------------------------------------------------------------------
South Dakota 5 222,220 0.19
- -------------------------------------------------------------------------------
Alaska 4 216,702 0.19
- -------------------------------------------------------------------------------
Oregon 5 155,784 0.14
- -------------------------------------------------------------------------------
West Virginia 9 145,501 0.13
- -------------------------------------------------------------------------------
Delaware 3 124,441 0.11
- -------------------------------------------------------------------------------
Hawaii 2 118,572 0.10
- -------------------------------------------------------------------------------
Maine 2 93,974 0.08
- -------------------------------------------------------------------------------
Rhode Island 1 58,630 0.05
- -------------------------------------------------------------------------------
Idaho 2 55,909 0.05
- -------------------------------------------------------------------------------
Montana 1 48,824 0.04
- -------------------------------------------------------------------------------
North Dakota 1 20,549 0.02
- -------------------------------------------------------------------------------
Utah 2 11,364 0.01
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TOTAL: 2,767 115,150,759 100.00
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</TABLE>
Top
<PAGE> 11
<PAGE> 12
Exhibits
4.1(a) Copy of the Standard Terms to Pooling and Servicing Agreement
(May 1998 Edition).
4.1(b) Copy of the Series 1998-1 Pooling and Servicing Agreement,
dated as of May 1, 1998, by and among the Registrant, Union
Planters Bank, N.A., as Master Servicer, The Bank of New York,
as Contract of Insurance Holder, and The Bank of New York, as
Trustee. (related exhibits available upon request of the
Master Servicer)
<PAGE> 13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 28, 1998 UNION PLANTERS MORTGAGE
FINANCE CORP.
By:/s/ James K. Plunkett
----------------------
Name: James K. Plunkett
Title: Vice President
<PAGE> 14
INDEX TO EXHIBITS
4.1(a) Copy of the Standard Terms to Pooling and Servicing Agreement
(May 1998 Edition).
4.1(b) Copy of the Series 1998-1 Pooling and Servicing Agreement,
dated as of May 1, 1998, by and among the Registrant, Union
Planters Bank, N.A., as Master Servicer, The Bank of New York,
as Contract of Insurance Holder, and The Bank of New York, as
Trustee. (related exhibits available upon request of the
Master Servicer)
<PAGE> 1
EXHIBIT 4.1(a)
- --------------------------------------------------------------------------------
STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
-----------------------------------------------
UNION PLANTERS MORTGAGE FINANCE CORP.
PASS-THROUGH CERTIFICATES
MAY 1998 EDITION
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Definitions...............................................................................1
Section 1.02. Interest Calculations.....................................................................19
ARTICLE II THE ASSETS.............................................................................................19
Section 2.01. Assignment of Assets......................................................................19
Section 2.02. The Mortgage Loans........................................................................20
Section 2.03. Representations and Warranties of the Trustee.............................................22
Section 2.04. Representations and Warranties as to Assets...............................................22
Section 2.05. Purchase or Substitution of Certain Assets................................................22
ARTICLE III ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS..................................................26
Section 3.01. The Master Servicer.......................................................................26
Section 3.02. Maintenance of Records; Inspection of Asset Files.........................................27
Section 3.03. Collection of Payments on Assets; Servicing Delinquent Accounts...........................27
Section 3.04. Advances and Compensating Interest........................................................28
Section 3.05. Collection Account........................................................................29
Section 3.06. Certificate Account.......................................................................29
Section 3.07. Withdrawals From Certificate Account; Remittance Amounts..................................30
Section 3.08. Realization upon Defaulted Assets.........................................................31
Section 3.09. Title, Conservation, and Disposition of REO Property......................................31
Section 3.10. Full Prepayments and Liquidations; Trustee to Cooperate; Release of Mortgage Files........34
Section 3.11. Due-on-Sale Clauses and Assumption Agreements.............................................34
Section 3.12. Annual Accountants' Certificate; Annual Statement as to Compliance........................35
Section 3.13. Servicing Fees............................................................................35
Section 3.14. Late Charges; Prepayment Fees or Other Charges............................................36
Section 3.15. Maintenance of Standard Hazard Insurance, Primary Mortgage Insurance, and Errors
and Omissions Coverage.........................................................................36
ARTICLE IV REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS.........................................................38
Section 4.01. Remittance Reports........................................................................38
Section 4.02. Distribution Account......................................................................39
Section 4.03. Allocation of Funds.......................................................................40
Section 4.04. Compliance with Withholding Requirements..................................................40
Section 4.05. Reports of Security Principal Balances to the Clearing Agency.............................40
Section 4.06. Preparation of Regulatory Reports.........................................................40
ARTICLE V THE POOLING INTERESTS AND THE CERTIFICATES..............................................................41
Section 5.01. Pooling REMIC Interests...................................................................41
Section 5.02. The Certificates..........................................................................41
Section 5.03. Book-Entry Certificates...................................................................42
Section 5.04. Registration of Transfer and Exchange of Certificates.....................................42
Section 5.05. Restrictions on Transfer..................................................................43
Section 5.06. Accrual of Interest on the Certificates...................................................45
Section 5.07. Mutilated, Destroyed, Lost or Stolen Certificates.........................................45
Section 5.08. Persons Deemed Owners.....................................................................45
Section 5.09. Appointment of Paying Agent...............................................................45
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER..................................................................45
Section 6.01. Liability of the Depositor and the Master Servicer........................................45
Section 6.02. The Depositor's Representations and Warranties............................................46
Section 6.03. Representations, Warranties and Covenants of the Master Servicer..........................47
Section 6.04. Corporate Existence.......................................................................48
Section 6.05. Limitation on Liability of the Depositor, the Master Servicer and Others..................48
Section 6.06. Master Servicer Resignation...............................................................49
Section 6.07. Assignment or Delegation of Duties by the Master Servicer and the Depositor...............49
Section 6.08. The Depositor and Master Servicer May Own Certificates....................................49
Section 6.09. Protection of Trust Estate................................................................49
Section 6.10. Performance of Obligations................................................................50
ARTICLE VII EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS...............................................50
Section 7.01. Events of Default.........................................................................50
Section 7.02. Trustee to Act; Appointment of Successor..................................................52
Section 7.03. Notifications to Master Servicer and to Certificateholders................................53
ARTICLE VIII CONCERNING THE TRUSTEE...............................................................................53
Section 8.01. Duties of Trustee.........................................................................53
Section 8.02. Certain Matters Affecting the Trustee.....................................................54
Section 8.03. Trustee Not Liable for Certificates or Assets.............................................56
Section 8.04. Trustee May Own Certificates..............................................................56
Section 8.05. Trustee's Fees and Expenses...............................................................56
Section 8.06. Eligibility Requirements for Trustee......................................................56
Section 8.07. Resignation and Removal of the Trustee....................................................57
Section 8.08. Successor Trustee.........................................................................57
Section 8.09. Merger or Consolidation of Trustee........................................................58
Section 8.10. Appointment of Co-Trustee or Separate Trustee.............................................58
Section 8.11. Appointment of Custodians.................................................................59
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.............................59
ARTICLE IX TERMINATION............................................................................................59
Section 9.01. Termination Upon Repurchase or Liquidation of All Assets..................................59
Section 9.02. Additional Termination Requirements.......................................................61
ARTICLE X REMIC TAX PROVISIONS....................................................................................61
Section 10.01. REMIC Administration.....................................................................61
Section 10.02. Prohibited Activities....................................................................62
ARTICLE XI MISCELLANEOUS PROVISIONS...............................................................................63
Section 11.01. Amendments...............................................................................63
Section 11.02. Recordation of Agreement; Counterparts...................................................64
Section 11.03. Limitation on Rights of Certificateholders...............................................64
Section 11.04. Notices..................................................................................65
Section 11.05. Severability of Provisions...............................................................65
Section 11.06. Sale of Assets...........................................................................65
Section 11.07. Notice to Rating Agency..................................................................66
ARTICLE XII CONCERNING THE CONTRACT OF INSURANCE HOLDER...........................................................67
Section 12.01. Compliance with FHA Regulations and Filing of FHA Claims.................................67
Section 12.02. Regarding the Contract of Insurance Holder...............................................67
</TABLE>
<PAGE> 4
TABLE OF EXHIBITS
<TABLE>
<S> <C>
Exhibit 1-A Form of Initial Certification
Exhibit 1-B Form of Final Certification
Exhibit 2 Form of Recordation Report
Exhibit 3 Form of Request for Release
Exhibit 4 Form of Rule 144A Agreement
Exhibit 5 Form of Transferee Agreement
Exhibit 6 Form of Benefit Plan Affidavit
Exhibit 7 Form of Residual Transferee Agreement
Exhibit 8 Form of Supplemental Pooling and Servicing Agreement
Exhibit 9 Union Planters Mortgage Loan Collection and Loss Mitigation Procedures
</TABLE>
(iii)
<PAGE> 5
RECITALS
UNION PLANTERS MORTGAGE FINANCE CORP., a Delaware corporation (the
"Depositor"), UNION PLANTERS BANK, N.A., a national banking association (the
"Master Servicer") and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee") have entered into a Pooling and Servicing Agreement that
provides for the issuance of mortgage pass-through securities (the
"Certificates") that in the aggregate evidence the entire interest in a pool
consisting of mortgage loans secured by first liens on one- to four-family
residential real properties (the "Mortgage Loans," and, together with certain
other assets, the "Assets") and other property owned by the Trust (the "Trust")
created by such Pooling and Servicing Agreement. These Standard Terms are a part
of, and are incorporated by reference into, such Pooling and Servicing
Agreement.
STANDARD PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Pooling and Servicing Agreement and
as hereinafter set forth, the Depositor, the Master Servicer and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
Except as otherwise specified herein or in a Pooling and Servicing
Agreement or as the context may otherwise require, whenever used in these
Standard Terms, the following words and phrases shall have the meanings assigned
to them in this Article. Unless otherwise specified, all calculations described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months.
"Accrual Date": With respect to any Series or Class of Certificates,
the date upon which interest begins accruing on the Certificates of such Series
or Class, which shall be specified in the related Pooling and Servicing
Agreement.
"Adjustable Rate Asset": An "adjustable rate" Mortgage Loan, the Asset
Rate of which is subject to periodic adjustment in accordance with the terms of
the related Mortgage Note.
"Advance": Any Servicing Advance, Foreclosure Advance or P&I Advance.
"Affiliate": As to any specified Person, any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Application for Relief": As defined in Section 4.06 hereof.
"Asset": A Mortgage Loan, or other asset if specified in the related
Pooling and Servicing Agreement.
"Asset Documents": Mortgage Loan Documents, and other asset documents
if specified in the related Pooling and Servicing Agreement.
"Asset File": With respect to any Asset, the related Trustee Mortgage
Loan File.
"Asset Rate": As to any Asset, the Mortgage Rate.
-1-
<PAGE> 6
"Asset Schedule": For any Series, the list or lists attached to the
related Pooling and Servicing Agreement consisting of the related Mortgage Loan
Schedule.
"Assignment": A document effecting the transfer of all the rights of a
secured party under a Mortgage to a transferee, in recordable form for the
jurisdiction in which the related Mortgaged Property is located.
"Assignment Event": The 30th day following either (i) the Seller's
long-term unsecured debt rating being reduced to below "A2" by Moody's Investors
Service, Inc. or (ii) the suspension, termination or withdrawal of the Seller's
long-term unsecured debt rating by Moody's Investors Service, Inc. (provided,
however, that if such suspension, termination or withdrawal is for reasons other
than credit reasons, the Seller shall have 90 days to provide a substitute
rating agency acceptable to the Trustee).
"Available Distribution Amount": For each Distribution Date for a
Series of Certificates, the amount on deposit in the related Distribution
Account at the commencement of business on such Distribution Date, less income
earned thereon.
"Basis Limit Amount": With respect to any Converted Loan purchased from
a REMIC, an amount equal to the REMIC's adjusted federal income tax basis in
such Converted Loan as of the date on which the purchase occurs as set forth in
a certificate of an Officer of the Master Servicer, which certificate shall be
delivered to the Trustee in connection with any purchase of a Converted Loan
from a REMIC.
"Beneficial Owner": With respect to a Book-Entry Certificate, the
Person who is registered as owner of that Certificate in the books of the
Clearing Agency for that Certificate or in the books of a Person maintaining an
account with such Clearing Agency.
"Benefit Plan Affidavit": An affidavit substantially in the form of
Exhibit 6 hereto.
"Benefit Plan Opinion": An Opinion of Counsel to the effect that a
proposed transfer of a Certificate will not (a) cause any of the assets of the
Trust to be regarded as "plan assets" for purposes of the Plan Asset
Regulations, (b) give rise to any fiduciary duty under ERISA on the part of the
Depositor, the Master Servicer, the Trustee or the Trust's Tax Matters Person,
if any, or (c) be treated as, or result in, a "prohibited transaction" under
section 406 or section 407 of ERISA or under section 4975 of the Code. The cost
of obtaining a Benefit Plan Opinion shall not be borne by the Depositor, the
Master Servicer or the Trustee.
"Board of Directors": The Board of Directors of the Master Servicer or
any committee of that Board duly authorized to act on behalf of that Board with
respect to any matters arising hereunder.
"Book-Entry Certificates": The Classes of Certificates of a Series, if
any, classified as such in the related Pooling and Servicing Agreement.
"Business Day": Any day that is not a Saturday, Sunday, holiday or
other day on which commercial banking institutions in the city and state in
which the Trustee's Corporate Trust Office is located are authorized or
obligated by law or executive order to be closed.
"Certificate Account": An account established pursuant to and described
in Section 3.06 hereof. The Certificate Account will be an asset of the Trust.
Solely for federal income tax purposes, the Master Servicer will be the owner of
the Certificate Account and, thus, any income earned by the Certificate Account,
or any amounts transferred by any related REMIC to the Certificate Account,
shall be treated as income earned by, or amounts distributed to, the Master
Servicer.
"Certificate Principal Balance": With respect to each Certificate or
Class of Certificates, on any date of determination, the outstanding principal
amount, if any, of such Certificate(s) immediately prior to the most recently
preceding Distribution Date (or in the case of a date of determination on or
before the first Distribution Date, an amount equal to the initial principal
amount of such Certificate(s) as of the Closing Date) net of the amounts, if
any,
-2-
<PAGE> 7
applied on such preceding Distribution Date to reduce the principal amount of
such Certificate(s) in accordance with Section 3.07(d) hereof, less the amount,
if any, of Realized Losses allocated during such period, to the extent specified
in the Pooling and Servicing Agreement.
"Certificate Register" and "Certificate Registrar": The respective
meanings specified for such terms in Section 5.04 hereof.
"Certificateholder" or "Holder": With respect to any Certificate, the
Person in whose name such Certificate is registered in the Certificate Register.
"Certificates": The certificates authorized by, executed and delivered
under, and issued pursuant to any Pooling and Servicing Agreement.
"Claims Administrator": The entity identified as such in any related
Pooling and Servicing Agreement, or any successor thereof.
"Class": With respect to any Series, the classification of different
types of the Certificates within such Series as set forth in the related Pooling
and Servicing Agreement.
"Clearing Agency": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": With respect to any Series, the date specified as the
"Closing Date" in the related Pooling and Servicing Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": As defined in Section 3.05 hereof.
"Collection Period": With respect to each Distribution Date for a
Series, the period commencing on the second day of the calendar month preceding
the month in which such Distribution Date occurs and ending at the close of
business on the first day of the calendar month in which such Distribution Date
occurs.
"Commission": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended.
"Compensating Interest": For any Remittance Date, the amount of all Due
Date Interest Shortfalls for the preceding Collection Period to the extent such
shortfalls do not exceed the Master Servicer's aggregate servicing compensation
in respect of such Collection Period.
"Contract of Insurance Holder": The approved mortgagee identified as
the "Contract of Insurance Holder" under any Pooling and Servicing Agreement.
"Converted Loan": An Adjustable Rate Asset with respect to which the
Obligor has complied with the applicable requirements of the related Mortgage
Note to convert the related Asset Rate to a fixed rate of interest, and as to
which the Master Servicer has processed such conversion.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business under a
Pooling and Servicing Agreement shall be administered.
-3-
<PAGE> 8
"Credit Insurer": An insurer under any Primary Mortgage Insurance
Policy or pool insurance policy for a Series.
"Custodian": For any Series, the Trustee or an agent of the trustee
identified in the related Pooling and Servicing Agreement, which agent shall
hold all or part of the Trustee Mortgage Loan Files for some or all of the
related Mortgage Loans.
"Cut-off Date": With respect to any Series, the date or dates (a) after
which all Monthly Payments due in respect of the Assets sold to the Trust and
(b) on and after which all Principal Prepayments, Net Liquidation Proceeds and
Repurchase Prices received in respect of such Assets, are to be transmitted to
the Certificate Account for the benefit of the Holders of the Certificates. The
Cut-off Date for a Series shall be specified in the related Pooling and
Servicing Agreement.
"Cut-off Date Principal Balance": As to any Asset, the original
principal amount of such Asset, minus the principal portion of all Monthly
Payments due on such Asset on or before the Cut-off Date and minus all other
payments applied to reduce such original principal amount before the Cut-off
Date.
"Default": Any occurrence that is, or that with notice or the lapse of
time or both would become, an Event of Default.
"Defect Discovery Date": With respect to an Asset, the date on which
either the Trustee or the Master Servicer first discovers a Qualification Defect
affecting the Asset.
"Depositor": Union Planters Mortgage Finance Corp., a Delaware
corporation, and its permitted successors and assigns.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust, in each case other
than through an Independent Contractor; provided, however, that the Master
Servicer on behalf of the Trustee shall not be considered to Directly Operate an
REO Property solely because the Master Servicer on behalf of the Trustee
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": Either (a) the United States, (b) any
state or political subdivision thereof, (c) any foreign government, (d) any
international organization, (e) any agency or instrumentality of any of the
foregoing, (f) any organization (other than a cooperative described in section
521 of the Code) that is exempt from federal income taxation (including taxation
under the unrelated business taxable income provisions of the Code), (g) any
rural telephone or electrical service cooperative described in section
1381(a)(2)(C) of the Code, or (h) any other entity identified as a disqualified
organization by legislation enacted or administrative pronouncement in effect as
of the date of the most recent transfer of the related Residual Certificate. A
corporation will not be treated as an instrumentality of the United States or
any state or political subdivision thereof if all of its activities are subject
to tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.
"Distribution Account": As defined in Section 4.02 hereof.
"Distribution Date": Unless otherwise specified in the Pooling and
Servicing Agreement, the 25th day of any month, or the next Business Day after
such 25th day if such 25th day is not a Business Day, commencing in the month
following the Closing Date and ending on the date on which the Trust is
terminated.
"Due Date": With respect to any Asset, the date on which a Monthly
Payment is due on such Asset from the Obligor thereunder (without regard to any
grace period).
-4-
<PAGE> 9
"Due Date Interest Shortfall": For any Asset that is prepaid in full or
liquidated on other than a Due Date for such Asset, the difference between (a)
the amount of interest that would have accrued on such Asset through the day
preceding the Due Date next following the date of such prepayment or liquidation
had the Asset not been prepaid in full or liquidated (net of any Servicing Fees
and Trustee Fees) and (b) the amount of interest that actually accrued on such
Asset prior to the prepayment in full or liquidation thereof (net of an
allocable portion of any Servicing Fees and Trustee Fees).
"Early Payment": As to any Asset and any Due Date on which the
principal and interest payments on such Asset made with respect to such Due Date
(not including any late fees) exceed the sum of the scheduled Monthly Payment
for such Asset and Due Date plus any unpaid Monthly Payments for previous Due
Dates, if the related Obligor has not sent written notice to the Master Servicer
with such payment asking that the amount by which such payment exceeds the
Monthly Payment then due be treated as a Principal Prepayment and the Master
Servicer is unable to determine the Obligor's intended treatment of such excess
payment, the Early Payment shall be the amount by which (1) payments of
principal and interest on such Asset made with respect to such Due Date exceed
(2) the scheduled Monthly Payment for such Asset on such Due Date plus any
unpaid Monthly Payments for previous Due Dates, but only to the extent that the
amount of such excess is an integral multiple of the amount of the scheduled
Monthly Payment for such Due Date. To the extent that the amount of such excess
exceeds an integral multiple of such scheduled Monthly Payment, the excess shall
be deemed to be a Principal Prepayment of such Asset.
"Eligible Account": (1) An account or accounts maintained with a
Qualified Bank, (2) any trust account maintained in the corporate trust
department of a financial institution subject to governmental regulatory
authorities or (3) a non-trust account maintained with the Trustee, so long as
the Trustee's commercial paper or short-term unsecured debt obligations are
rated by each Rating Agency in its highest applicable rating category (without
regard to "plus" or "minus" modifiers of such rating category); provided that
the Master Servicer shall move any funds in such account to another account
which is an Eligible Account pursuant to clause (1) or (2) of this definition
within five days after any downgrading of the Trustee's commercial paper or
short-term unsecured debt obligations below each Rating Agency's highest
applicable rating category (without regard to "plus" or "minus" modifiers of
such rating category) and shall not deposit funds into any account that is an
Eligible Account pursuant to this clause (3) if such deposit would cause the
amount on deposit in such account to exceed 20% of the aggregate unpaid
principal balance of the Certificates. Eligible Accounts may bear interest.
"Eligible Investments": Any one or more of the following obligations or
securities:
(a) direct obligations of, and obligations fully guaranteed by, the
United States of America;
(b) demand and time deposits in, negotiable certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by, any Qualified Bank;
(c) commercial paper of any Person other than the Depositor, the Seller
or any Affiliate of the Depositor or the Seller rated in the Rating Agency's
highest applicable rating category;
(d) repurchase agreements fully collateralized by possession of
obligations of the type specified in clause (a) above; provided, however, that
investments in such repurchase agreements shall mature within three days of the
acquisition thereof and; provided further, that such agreements shall be entered
into with a Qualified Bank;
(e) money market accounts or money market funds rated in one of the
three highest rating categories of the Rating Agency for money market funds; or
(f) money market accounts or money market mutual funds investing
primarily in obligations of the United States government, and further investing
exclusively in debt obligations, provided, however, that such money market
accounts or money market mutual funds shall be rated in a rating category
sufficient to support the initial ratings assigned to a related Series of
Certificates.
-5-
<PAGE> 10
The foregoing notwithstanding, Eligible Investments that are acquired
with funds in the Certificate Account, the Distribution Account or any Reserve
Fund shall include only such obligations or securities that mature on or before
the Business Day immediately preceding the next Distribution Date. The Trustee
may not sell or convert an Eligible Investment if such sale or conversion would
result in a loss on the investment. In no event shall an instrument be an
Eligible Investment if such instrument evidences (1) a right to receive only
interest payments with respect to the obligations underlying such instrument or
(2) both principal and interest payments derived from obligations underlying
such instrument, if the interest and principal payments with respect to such
instrument provide a yield to maturity at the date of investment of greater than
120% of the yield to maturity at par of such underlying obligations.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Restricted Certificates": With respect to any Series, any
Certificates of a Class that are subordinated to the Certificates of any other
Class of such Series, and are designated as "ERISA Restricted Certificates" in
the related Series Agreement.
"Event of Default": As defined in Section 7.01 hereof.
"Fannie Mae": Fannie Mae (formerly the Federal National Mortgage
Association), or any successor in interest.
"FHA": The Federal Housing Administration or any successor thereof.
"FHA Asset": An Asset that is insured by the FHA.
"FHA Insurance": As to any FHA Asset, FHA's agreement to reimburse the
owner of such Asset for the amount of any losses incurred upon the liquidation
of such Asset.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 1-B hereto
provided by the Trustee (or the Custodian) on or before the first anniversary of
the Closing Date pursuant to Section 2.02(c)(2) hereof.
"Final Scheduled Distribution Date": With respect to any Class of any
Series, the date specified as such in the related Pooling and Servicing
Agreement.
"Foreclosure Advance". As defined in Section 3.04(c) hereof.
"Fraud Loss": A loss incurred on a Mortgage Loan resulting from a
Credit Insurer's failure to pay a claim with respect to such Mortgage Loan on
the grounds of fraud in connection with the origination of the Mortgage Loan or
on the grounds of fraud, dishonesty or misrepresentation in connection with the
application for any insurance obtained with respect to such Mortgage Loan.
"Freddie Mac": Freddie Mac (formerly the Federal Home Loan Mortgage
Corporation), or any successor in interest.
"Government Insured Mortgage Loan": Any Mortgage Loan guaranteed by the
VA or insured by FHA, which are backed by the full faith and credit of the
United States government.
"Independent": When used with respect to any specified Person, another
Person who (a) is in fact independent of the Depositor, the Seller, the Master
Servicer, any obligor upon the Certificates or any Affiliate of the Depositor,
the Seller or the Master Servicer or such obligor, (b) does not have any direct
financial interest or any material indirect financial interest in the Depositor,
the Seller or the Master Servicer or in any such obligor or in an Affiliate of
the Depositor, the Seller or the Master Servicer or such obligor, and (c) is not
connected with the Depositor, the Seller or the Master Servicer or any such
obligor as an officer, employee, promoter, underwriter,
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trustee, partner, director or person performing similar functions. Whenever it
is provided herein that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by the Depositor, the
Seller or the Master Servicer in the exercise of reasonable care by the
Depositor, the Seller or the Master Servicer, as the case may be, and approved
by the Trustee, and such opinion or certificate shall state that the Person
executing the same has read this definition and that such Person is independent
within the meaning thereof.
"Independent Contractor": Either (a) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to the Trust
within the meaning of Section 856(d)(3) of the Code if the Trust were a real
estate investment trust (except that, in applying that Section, more than 35% of
the outstanding principal balance of any Class shall be deemed to be more than
35% of the certificates of beneficial interest of the Trust), so long as the
Trust does not receive or derive any income from such Person, the relationship
between such Person and the Trust is at arm's length and such Person is not an
employee of the REMIC, the Trustee or the Master Servicer, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (b) any other Person
(including the Master Servicer) upon receipt by the Trustee of an Opinion of
Counsel, the expense of which shall constitute a Servicing Advance if borne by
the Master Servicer, to the effect that the taking of any action in respect of
any REO Property by such Person, subject to any conditions therein specified,
that is otherwise herein contemplated to be taken by an Independent Contractor
will not cause such REO Property to cease to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code), or
cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 1-A hereto
provided by the Trustee (or the Custodian) on the Closing Date pursuant to
Section 2.02(c)(1) hereof.
"Initial Value": As defined in Section 3.15(b) hereof.
"Insurance Policy": Any insurance policy covering any Asset (and the
related Mortgaged Property), including, without limitation, any Standard Hazard
Insurance Policy or Primary Mortgage Insurance Policy or FHA Insurance or VA
Guaranty.
"Insurance Proceeds": Amounts paid or payable (as the context requires)
under any Insurance Policy, to the extent such amounts are not applied to the
restoration or repair of the Mortgaged Property in respect of which such amounts
were paid.
"Insured Expenses": Expenses incurred by the Master Servicer in
connection with a Mortgage Loan under which the Obligor is in default, which
expenses are covered by a Standard Hazard Insurance Policy and are paid by an
insurer under any such policy.
"Interest Accrual Period": With respect to each Distribution Date (i)
for any Class of Certificates paying interest at a variable rate, the period
commencing on the 15th day of the preceding month through the 14th day of the
month in which such Distribution Date occurs (except that the first Interest
Accrual Period for such Class of Certificates will be the period from the
related Closing Date through the 14th day of the month in which such
Distribution Date occurs) and (ii) for all other Classes of Certificate, the
calendar month preceding the month in which the Distribution Date occurs.
Interest on any Class of Certificates paying interest at a variable rate will be
calculated on the basis of a 360-day year and the actual number of days elapsed
in the applicable Interest Accrual Period. Interest on all other Classes of
Certificates will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Issuing REMIC": If provided for in a Pooling and Servicing Agreement,
the REMIC composed primarily of Regular Interests in the Pooling REMIC, together
with the Distribution Account.
"Liquidated Loan": A defaulted Mortgage Loan as to which all amounts
that the Master Servicer expects to recover have been received.
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"Liquidation Expenses": All reasonable, out-of-pocket costs and
expenses (exclusive of the Master Servicer's overhead costs) incurred by the
Master Servicer in connection with liquidation of any Asset or disposition of
any related REO Property, including, but not limited to, the cost of all notices
sent in connection with such liquidation, costs and expenses incurred in
connection with preparation and recordation of assignments of Mortgages,
expenses, including reasonable attorney's fees, incurred in connection with the
commencement and pursuit of Proceedings against Obligors or guarantors or
sureties of Obligors or in the pursuit of foreclosure or other similar remedies,
expenses incurred in repossessing and refurbishing the related REO Property for
sale and sales commissions paid in connection with the resale of the related REO
Property.
"Liquidation Proceeds": Amounts received and retained in connection
with the liquidation of Liquidated Loans, whether through foreclosure on the
related Mortgaged Property or otherwise (including Insurance Proceeds collected
in connection with such liquidation and proceeds of FHA Insurance and VA
Guaranty payments related to Government Insured Mortgage Loans).
"Master Servicer": Union Planters Bank, N.A., as master servicer of any
of the Assets under any Pooling and Servicing Agreement, and its permitted
successors and assigns.
"Master Servicer Mortgage Loan File": As to each Mortgage Loan, a file
maintained by the Master Servicer that contains or will contain at such time
that appropriate documentation of the servicing of the Mortgage Loans, and
generally may include for this purpose (1) an original, microfiche or electronic
record of Standard Hazard Insurance Policy (and flood insurance policy, if
required pursuant to Section 3.15 hereof) relating to the underlying Mortgaged
Property or a certificate of insurance issued by the insurer or its agent
indicating that a Standard Hazard Insurance Policy (and a flood insurance
policy, if required pursuant to Section 3.15 hereof) is in effect with respect
to such Mortgaged Property, (2) originals or copies of all documents submitted
to a Mortgage Insurer for credit and property underwriting approval, (3) the
originals or copies of all RESPA and Regulation Z disclosure statements executed
by the related Mortgagors, (4) the original or a copy of the appraisal report
made in connection with the origination of the Mortgage Loan, (5) the original
or a copy of the settlement statement for the purchase and/or refinancing of the
underlying Mortgaged Property by the related Mortgagor under the related
Mortgage Note and Mortgage, (6) evidence of any tax service contracts, which may
be copies or in electronic format, (7) documentation relating to any approvals
by the Master Servicer of any modifications of the original related Mortgage
Loan Documents and any releases of collateral supporting the related Mortgage
Loan, together with copies of the documentation effecting any such modifications
or releases, (8) collection notices or form notices sent to the related
Mortgagor, which may be copies or in electronic format, (9) foreclosure
correspondence and legal notifications, if applicable which may be copies or in
electronic format, (10) water and irrigation company stock certificates, if
applicable, and (11) all other documents relating to such Mortgage Loan which
would customarily be maintained in a mortgage loan file by the Master Servicer
in order to service the mortgage loan properly, as well as any other documents
relating to such Mortgage Loan (other than Mortgage Loan Documents) that come
into the Master Servicer's possession.
"Monthly Payment": With respect to any Asset, the scheduled monthly
payment of principal and interest thereon due in any month under the terms
thereof.
"Mortgage": A written instrument creating a valid first lien on
Mortgaged Property, in the form of a mortgage, deed of trust, deed to secure
debt or security deed, including any riders or addenda thereto.
"Mortgage Insurer": The insurance company or companies which issue any
Primary Mortgage Insurance Policies with respect to any Mortgage Loans.
"Mortgage Loan": A mortgage loan secured by a first lien on a one- to
four-family residential real property (which may be the real estate to which a
manufactured home is deemed by the Seller to have become permanently affixed as
of the Cut-off Date for the related Series).
"Mortgage Loan Documents": With respect to each Mortgage Loan, the
following documents:
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(a) the original Mortgage Note bearing a complete chain of
endorsements, if necessary, from the initial payee thereunder to the Seller,
with a further endorsement without recourse from the Seller in blank or to the
Trustee or its Custodian, in a form specified in the related Sales Agreement,
(or a copy or a duplicate original Mortgage Note, together with an affidavit
certifying that the original thereof has been lost or destroyed) together with
all related riders and addenda and any related surety or guaranty agreement,
power of attorney and buydown agreement;
(b) the original recorded Mortgage (or a copy thereof certified to be a
true and correct reproduction of the original thereof by the appropriate public
recording office) with evidence of recordation noted thereon or attached
thereto, or, if the Mortgage is in the process of being recorded, a photocopy of
the Mortgage, certified by an officer of the related Seller or the originator,
the related title insurance company, the related closing/settlement/escrow agent
or the related closing attorney to be a true and correct copy of the Mortgage
submitted for recordation;
(c) each original recorded intervening assignment of the Mortgage as
is necessary to show a complete chain of title from the initial mortgagee (or
beneficiary, in the case of a deed of trust) to the related Seller (or a copy of
each such assignment certified to be a true and correct reproduction of the
original thereof by the appropriate public recording office) with evidence of
recordation noted thereon or attached thereto, or, if an assignment is in the
process of being recorded, a photocopy of the assignment, certified by an
officer of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(d) an original Title Insurance Policy or, if such policy has not yet
been issued or is otherwise not available, (1) a written commitment to issue
such policy issued by the applicable title insurance company and an officer's
certificate of the related Seller certifying that all of the requirements
specified in such commitment have been satisfied, (2) a preliminary title report
if the related Mortgaged Property is located in a state in which preliminary
title reports are acceptable evidence of title insurance or (3) a certificate of
an officer of the Seller certifying that a Title Insurance Policy is in full
force and effect as to the related Mortgage and that such Title Insurance Policy
is freely assignable to and will inure to the benefit of the Trustee (subject to
recordation of the related Assignment of Mortgage);
(e) (1) for each Mortgage Loan identified in the related Pooling
and Servicing Agreement as having in place a Primary Mortgage Insurance Policy,
a Primary Mortgage Insurance Policy or a certificate of primary mortgage
insurance issued by the related Mortgage Insurer or its agent indicating that
such a policy is in effect as to such Mortgage Loan or, if neither a policy nor
a certificate of insurance from the related Mortgage Insurer is available, a
certificate of an officer of the related Seller certifying that a Primary
Mortgage Insurance Policy is in effect as to such Mortgage Loan, or 2)" (2) for
each Mortgage Loan identified in the related Pooling and Servicing Agreement as
having in place FHA Insurance or a VA Guaranty, the related certificate issued
by FHA or VA, as applicable, evidencing that such policy is in effect as to such
Mortgage Loan or, if such certificate is not available, a certificate from an
officer of the related Seller certifying that FHA Insurance or VA Guaranty, as
applicable, is in effect as to such Mortgage Loan;
(f) each related assumption agreement, modification, written assurance
or substitution agreement, if any; and
(g) proof of the maintenance of a Standard Hazard Insurance Policy (and
a flood insurance policy, if applicable) as to the related Mortgaged Property.
"Mortgage Loan-to-Value Ratio": As to a Mortgage Loan, the ratio,
expressed as a percentage, borne by the principal amount of such Mortgage Loan
at the time of determination, to (a) the lesser of (1) the sales price of the
related Mortgaged Property (in the case of a purchase money mortgage loan where
the Mortgage Loan-to-Value Ratio is being determined as of origination), or (2)
the appraised value of the related Mortgaged Property, as shown in the appraisal
prepared in connection with the origination of such Mortgage Loan or (b) the
appraised value of the related Mortgaged Property, as shown in an appraisal made
within six months of the date of determination of the Mortgage Loan-to-Value
Ratio, where the Mortgage Loan-to-Value Ratio is being determined later than
origination.
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"Mortgage Loan Schedule": For any Series, the list attached to the
related Pooling and Servicing Agreement identifying each Mortgage Loan assigned
thereunder, which list shall (a) identify each Mortgage Loan and (b) set forth
(or describe the method of determining) as to each such Mortgage loan (1) the
Cut-off Date Principal Balance thereof, (2) the amount of each Monthly Payment,
(3) the Mortgage Rate thereof, (4) the original term to maturity thereof, (5)
the date of origination thereof, (6) the original Mortgage Loan-to-Value Ratio
thereof, (7) the state in which the related Mortgaged Property is located, and
(8) any other information specified in the Pooling and Servicing Agreement.
"Mortgage Note": A manually executed written instrument evidencing a
Mortgagor's promise to repay a stated sum of money, plus interest, to the holder
of such instrument on or before a specific date according to a schedule of
principal and interest payments.
"Mortgage Rate": With respect to each Mortgage Loan, the interest rate
specified in the related Mortgage Note.
"Mortgaged Property": The mortgaged property securing a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Insurance Proceeds": With respect to any Asset, Insurance Proceeds
received with respect thereto net of (a) any Insured Expenses incurred in
connection therewith, (b) all other reasonable out-of-pocket expenses incurred
by the Master Servicer in connection with the collection of such Insurance
Proceeds and (c) the amount of any Advances made by the Master Servicer or any
other entity with respect to such Asset and not previously reimbursed to the
Master Servicer or such other entity as of the time of the Master Servicer's
receipt of such Insurance Proceeds. Amounts received by the Master Servicer as
Net Insurance Proceeds will be treated for accounting purposes as payments
received on Assets.
"Net Liquidation Proceeds": With respect to any Asset, the amount of
Liquidation Proceeds received with respect thereto (including any Net Insurance
Proceeds recovered in connection with the liquidation of the related Mortgaged
Property) net of the amount of any related Liquidation Expenses incurred and not
previously reimbursed to the Master Servicer or such other entity as of the time
of the liquidation of such Asset. Amounts received by the Master Servicer as Net
Liquidation Proceeds will be treated for accounting purposes as payments
received on Assets.
"Net Rate": As to any Asset, the applicable Asset Rate minus the
Servicing Fee Rate and the Trustee Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed, modified or extended on behalf of the Trust
(if the Trustee, or the Master Servicer or its agent, has the right to
renegotiate the terms of such lease).
"Non-Recoverable Advance": As to any Advance that has not yet been
made, any portion of the amount of such prospective Advance which the Master
Servicer reasonably determines would not ultimately be recoverable from Related
Proceeds. As to any Advance that has been made by the Master Servicer, any
portion of the amount of such Advance that has subsequently been determined by
the Master Servicer to be not ultimately recoverable from Related Proceeds. In
determining whether an Advance is or would be a Non-Recoverable Advance, the
Master Servicer need not take into account the possibility that it might recover
any amounts as the result of a deficiency judgment against the related Obligor.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (i.e., a person other than (a) a citizen or
resident of the United States, (b) a domestic corporation or partnership, (c) an
estate that is subject to United States federal income tax regardless of the
source of its income, (iv) 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 fiduciaries have the authority to control all substantial
decisions of the trust, or (v) a foreign person who would be subject to United
States income taxation on a net basis on income derived from the Residual
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<PAGE> 15
Certificates) who would be subject to United States income tax withholding
pursuant to section 1441 or 1442 of the Code on income derived from a Residual
Interest or (d) a trust if a court within the United States is able to exercise
primary supervision of the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust.
"Obligor": The obligor under an Asset.
"Obligor Bankruptcy Loss": With respect to any Distribution Date as to
any Asset that was the subject of a Principal Cramdown during the preceding
Prepayment Period, the related Principal Cramdown Amount.
"Officer": With respect to any corporation, the Chairman of the Board
of Directors, the President, any Vice President or Assistant Vice President, the
Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer of
such corporation (or, in the case of the Trustee, any trust officer thereof);
with respect to the Depositor, any Officer of the Depositor; with respect to any
partnership, the designated managing partner, if any, who has been granted
authority by the partnership agreement of such partnership to bind the
partnership by his or her signature, or, in any other case, any general partner
of the partnership; with respect to any bank or trust company acting as trustee
of an express trust or as custodian, any trust officer or authorized officer
thereof.
"Officer's Certificate": For any Person, a certificate that has been
signed on behalf of that Person by an Officer of that Person.
"Opinion of Counsel": A written opinion of counsel, which counsel is
satisfactory to the Master Servicer and the Trustee. Whenever an Opinion of
Counsel is required hereunder, the renderer of such Opinion may rely on other
Opinions of Counsel. Any Opinion of Counsel relating to tax matters must be an
opinion of Independent counsel.
"Outstanding": (a) With respect to the Certificates, as of any date of
determination, "Outstanding" refers to all Certificates theretofore executed and
delivered under the Pooling and Servicing Agreement except:
(1) Certificates theretofore canceled by the Certificate
Registrar or delivered to the Certificate Registrar for cancellation;
(2) Certificates or portions thereof for which money in
the amount necessary for the making of a final distribution on such Certificates
has been theretofore deposited with the Trustee or any Paying Agent in trust for
the Holders of such Certificates; provided, that if such Certificates are to be
retired because of termination of the Trust at the option of the Master
Servicer, notice of such optional termination has been duly given pursuant to
the Pooling and Servicing Agreement;
(3) Certificates in exchange for which other Certificates
have been executed and delivered pursuant to Section 5.04 hereof; and
(4) Certificates alleged to have been destroyed, lost or
stolen for which replacement Certificates have been issued pursuant to Section
5.07 hereof unless proof satisfactory to the Trustee has been presented at or
before the time that the determination of those Certificates that are
Outstanding is made that any such Certificates are held by a holder in due
course.
(b) With respect to the Assets as of any date, "Outstanding" refers to
Assets with unpaid principal balances greater than zero and that have not
previously been purchased or repurchased pursuant to Section 2.05 hereof or
become Liquidated Loans.
"P&I Advance": As defined in Section 3.04(a) hereof.
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"Pass-Through Rate": With respect to any Class of Certificates, the
annual rate at which interest accrues on the Certificates of such Class, which
rate is specified or described for each Class in the related Pooling and
Servicing Agreement.
"Paying Agent": Any Person authorized by the Depositor and the Trustee
to distribute principal or interest on any Certificates on behalf of the Trustee
and appointed pursuant to Section 5.09 hereof.
"Percentage Interest": With respect to a Certificate to which an
initial principal amount is assigned as of the Closing Date, the portion of the
Class of which such Certificate is a part evidenced by such Certificate,
expressed as a percentage, the numerator of which is the denomination
represented by such Certificate and the denominator of which is the initial
Certificate Principal Balance of such Class. With respect to a Certificate to
which an initial principal balance is not assigned as of the Closing Date, the
portion of the Class of which such Certificate is a part evidenced by such
Certificate, expressed as a percentage stated on the face of such Certificate.
"Permitted Encumbrances": In respect of any Mortgaged Property:
(a) the lien of current real property taxes and assessments not yet due
and payable;
(b) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording acceptable to
prudent mortgage lending institutions generally and specifically referred to in
the lender's title insurance policy delivered to the related originator and
referred to or otherwise considered in the appraisal made for the originator;
and
(c) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended to be
provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Plan": Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
"Plan Asset Regulations": The Department of Labor regulations set forth
in 29 C.F.R. ss. 2510.3-101.
"Plan Investor": A Plan, a Person acting on behalf of a Plan or a
Person using the assets of a Plan.
"Pool Scheduled Principal Balance": For any Series, on any Distribution
Date, the aggregate of the Scheduled Principal Balances on the last day of the
related Collection Period.
"Pooling and Servicing Agreement": A Pooling and Servicing Agreement
among the Depositor, the Master Servicer and a Trustee, relating to the issuance
of Certificates of a Series, which shall incorporate these Standard Terms by
reference.
"Pooling REMIC": If provided for in a Pooling and Servicing Agreement,
the REMIC consisting primarily of the related Assets.
"Pooling REMIC Regular Interest": A Regular Interest in a Pooling
REMIC.
"Prepayment Period": With respect to each Distribution Date, the
calendar month immediately preceding the calendar month in which such
Distribution Date occurs.
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"Primary Mortgage Insurance": The insurance provided under any Primary
Mortgage Insurance Policy.
"Primary Mortgage Insurance Policy": A primary mortgage insurance
policy, if applicable, covering certain conventional Mortgage Loans for which
the initial Mortgage Loan-to-Value Ratios exceeded 80%.
"Principal Cramdown" means, as to any Asset, either (a) a decree by a
bankruptcy court to the effect that the portion of such Asset that is secured by
the underlying Mortgaged Property is less than its Unpaid Principal Balance due
to the fact that the value of such Mortgaged Property is less than such Unpaid
Principal Balance or (b) the permanent forgiveness by a bankruptcy court of some
or all of the Unpaid Principal Balance owed by the related Obligor.
"Principal Cramdown Amount" means, with respect to any Prepayment
Period as to any Asset that has been the subject of a Principal Cramdown, the
amount by which (a) the Unpaid Principal Balance of such Asset exceeds (b) as
applicable, depending upon the type of Principal Cramdown that was applied to
such Asset, either (1) the portion of such Unpaid Principal Balance that remains
secured by the related Mortgaged Property after taking the related Principal
Cramdown into account or (2) the Unpaid Principal Balance after taking into
account the permanent forgiveness of debt ordered by the bankruptcy court in
connection with the related Principal Cramdown.
"Principal Distribution Amount": For any Series, as defined in the
related Pooling and Servicing Agreement.
"Principal Prepayment": With respect to any Asset, a payment
attributable to principal of such Asset, other than a scheduled principal
payment on such Asset, which may be received (a) from the related Obligor
together with a regular Monthly Payment, (b) from the related Obligor together
with an Early Payment, or (c) in the form of Net Insurance Proceeds received by
the Master Servicer otherwise than as a component of Liquidation Proceeds.
"Private Certificate": Any Class of Certificates of a Series designated
as such in the related Pooling and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualification Defect": With respect to an Asset, (a) a defective
document in the related Asset File, (b) the absence of a document in such Asset
File, or (c) the breach of any representation, warranty, or covenant with
respect to the Asset made by the Depositor, the Seller or the Master Servicer,
but only if, as a result of any of the foregoing, the affected Asset would cease
to qualify as a "qualified mortgage" for purposes of the REMIC Provisions. With
respect to a REMIC Regular Interest or a participation certificate described in
Code section 860G(a)(3), the failure to qualify as a "qualified mortgage" for
purposes of the REMIC Provisions.
"Qualified Bank": Any domestic bank not affiliated with the Seller or
the Depositor (1) having long-term unsecured debt obligations rated in one of
the two highest rating categories (without modifiers) of at least one Rating
Agency (and of any other Rating Agency, if such bank's long-term unsecured debt
obligations are rated by such additional Rating Agency) or short-term unsecured
debt obligations rated in at least one Rating Agency's highest applicable rating
category (and of any other Rating Agency's highest applicable rating category if
such bank's short-term unsecured debt obligations are rated by such additional
Rating Agency), (2) having commercial paper or short-term unsecured debt
obligations rated in at least one Rating Agency's highest applicable rating
category (and in any other Rating Agency's highest applicable rating category if
such bank's commercial paper or short-term unsecured debt obligations are rated
by such additional Rating Agency), or (3) that is otherwise acceptable to each
applicable Rating Agency.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
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"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Mortgaged Property covered by such policy is
located).
"Qualified Substitute Asset": An Asset substituted by the Depositor or
the Seller for a Replaced Asset which must, on the date of such substitution,
(a) have an Unpaid Principal Balance not greater than (and not more than $10,000
less than) the Unpaid Principal Balance of the Replaced Asset, (b) have an Asset
Rate not less than (and not more than one percentage point in excess of) the
Asset Rate of the Replaced Asset, (c) have a Net Rate equal to the Net Rate of
the Replaced Asset, (d) have a remaining term to maturity not greater than (and
not more than one year less than) that of the Replaced Asset, (e) have a
Mortgage Loan-to-Value Ratio as of the first day of the month in which the
substitution occurs equal to or less than the Mortgage Loan-to-Value Ratio of
the Replaced Asset as of such date (in each case, using the appraised value at
origination, and after taking into account the Monthly Payment due on such
date), and (f) comply with each representation and warranty set forth in Section
2.04 hereof and in the related Sales Agreement. In the event that more than one
Asset is substituted for a Replaced Asset, the amount described in clause (a)
hereof shall be determined on the basis of aggregate Unpaid Principal Balances,
the rates described in clauses (c) (i), (ii), and (iii) hereof shall be
determined on the basis of weighted average Asset Rates and Net Rates, as the
case may be, and the term described in clause (d) hereof shall be determined on
the basis of weighted average remaining terms to maturity, provided that no
Qualified Substitute Asset may have an original term to maturity beyond the
latest original term to maturity of any Asset assigned to the Trust on the
Closing Date. In the case of a Trust for which a REMIC election has been or will
be made, a Qualified Substitute Asset also shall satisfy the following criteria
as of the date of its substitution for a Replaced Asset: (A) the Obligor shall
not be 90 or more days delinquent in payment on the Qualified Substitute Asset,
(B) the Asset File for such Asset shall not contain any material deficiencies in
documentation, and shall include an executed Mortgage Note, as applicable, and,
if it is a Mortgage Loan, a recorded Mortgage; (C) the Mortgage Loan-to-Value
Ratio of the Asset must be 125% or less either (1) on the date of origination of
the Asset, or, if any of the terms of such Asset were modified other than in
connection with a default or imminent default on such Asset, on the date of such
modification, or (2) on the date of the substitution, based on an appraisal
conducted within the 60 day period prior to the date of the substitution; (D) no
property securing such Asset may be subject to foreclosure, bankruptcy, or
insolvency proceedings; and (E) such Asset, if a Mortgage Loan, must be secured
by a valid first lien on the related Mortgaged Property.
"Rating Agency": As to any Series, any nationally recognized
statistical rating agency, or its successor, that on the Closing Date rated one
or more Classes of the Certificates of such Series at the request of the
Depositor. If such agency or a successor is no longer in existence, "Rating
Agency" shall be such nationally recognized statistical rating agency, or other
comparable Person, designated by the Depositor, notice of which designation
shall be given to the Trustee and the Master Servicer. References herein to any
rating category of a Rating Agency shall mean such rating category without
regard to any plus or minus or numerical designation.
"Realized Loss": For any Series, as defined in the Pooling and
Servicing Agreement.
"Record Date": With respect to each Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Regular Certificate": A Certificate other than a Residual Certificate
and that is a Regular Interest in a REMIC or a combination of Regular Interests
in a REMIC.
"Regular Interests": Interests in a REMIC that are designated as
"regular interests" under the REMIC Provisions.
"Regulations": The regulations promulgated under the Code by the
Treasury.
"Related Proceeds': As defined in Section 3.04(c) hereof.
"REMIC": A "real estate mortgage investment conduit," within the
meaning of the REMIC Provisions. As to a particular Trust, those assets of the
Trust as to which an election is to be made to be treated as a "real estate
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mortgage investment conduit," within the meaning of section 860D of the Code. A
REMIC generally is an elective entity for federal income tax purposes that
consists of a fixed pool of qualifying assets in which investors hold multiple
classes of interests. In order to be treated as a REMIC, such pool will be
required to meet ongoing qualification requirements provided by the Code,
Regulations, and binding pronouncements of the Internal Revenue Service, as in
effect from time to time.
"REMIC Loan-to-Value Ratio": The quotient, expressed as a percentage,
obtained by dividing (a) the original unpaid principal balance of an Asset, plus
the full amount of any other indebtedness secured by the related Mortgaged
Property which is senior to, or pari passu with, such Asset by (b) the sale
price of the Mortgaged Property that secures such Asset. Alternatively, the
REMIC Loan-to-Value Ratio may be determined by dividing (a) the unpaid principal
balance of an Asset as of the Startup Day plus the full amount of any other
indebtedness secured by the related Mortgaged Property which is senior to, or
pari passu with, such Asset by (b) the fair market value of the Mortgaged
Property that secures such Asset on the Startup Day.
"REMIC Provisions": Provisions of the Code relating to real estate
mortgage investment conduits, which appear at sections 860A through 860G of the
Code, related Code provisions, and Regulations (whether in proposed, temporary
or final form), announcements and rulings thereunder, as the foregoing may be in
effect from time to time.
"Remittance Amount": With respect to any Remittance Date and related
Distribution Date, the amount equal to i)" (i) sum of the following amounts:
(a) the Monthly Payment that was due on each Outstanding Asset on
the Due Date occurring in the related Collection Period and that was received by
the Master Servicer from the related Obligor;
(b) all amounts received during the related Collection Period in
respect of any Asset that was Outstanding at the beginning of the related
Collection Period representing late payments of principal and interest due on
such Asset prior to the Due Date occurring in the related Collection Period, to
the extent such amounts exceed outstanding unreimbursed P&I Advances made by the
Master Servicer with respect to such Asset;
(c) each Principal Prepayment (whether full or partial) of any
Asset that was Outstanding at the beginning of the related Prepayment Period
received by the Master Servicer during the related Prepayment Period;
(d) any amounts received by the Master Servicer during the related
Prepayment Period as Net Liquidation Proceeds with respect to any Asset that was
Outstanding at the beginning of the related Prepayment Period (net of
outstanding unreimbursed P&I Advances made by the Master Servicer with respect
to such Asset);
(e) all amounts deposited into the Certificate Account during the
related Prepayment Period as a result of any purchase or repurchase of any Asset
pursuant to Section 2.05 hereof (net of outstanding unreimbursed P&I Advances
made by the Master Servicer with respect to such Asset); and
(f) all Foreclosure Advances made by the Master Servicer
less (ii) amounts permitted to be withdrawn by the Master Servicer pursuant to
Section 3.07(a) during the related Collection Period.
"Remittance Date": The Business Day preceding each Distribution Date,
which is the date by which funds must be remitted by the Master Servicer from
the Certificate Account to the Distribution Account or, if the Certificate
Account is maintained by the Trustee, the date on which the Master Servicer is
to notify the Trustee of the related Remittance Amount, in either case pursuant
to Section 3.07(b) hereof.
"Remittance Report": As defined in Section 4.01 hereof.
"Rents From Real Property": With respect to any REO Property, gross
income of the character described in Code section 856(d) and Treasury
regulations thereunder.
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"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Certificateholders through foreclosure or deed-in-lieu of
foreclosure, as further described in Section 3.09 hereof.
"REO Property Disposition": The receipt by the Master Servicer of
Insurance Proceeds and other payments and recoveries (including Liquidation
Proceeds) which the Master Servicer recovers from the sale or other disposition
of an REO Property.
"Replaced Asset": An Asset replaced or to be replaced by a Qualified
Substitute Asset.
"Repurchase Price": With respect to any Asset to be purchased or
repurchased pursuant to Section 2.04 hereof, an amount equal to the Unpaid
Principal Balance of such Asset as of the close of business on the date of such
purchase or repurchase, together with all accrued and unpaid interest thereon to
the end of the Collection Period in which such purchase or repurchase occurs.
"Repurchaser": Any Person that repurchases or purchases an Asset from
the Trust pursuant to Section 2.05 hereof.
"Request for Release": A release signed by an Officer of the Master
Servicer in the form attached hereto as Exhibit 3.
"Reserve Fund": Any fund designated as a "Reserve Fund" in a Pooling
and Servicing Agreement.
"Residual Certificate": Any one of the Classes of Certificates of a
Series designated as such in the related Pooling and Servicing Agreement.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" under the REMIC Provisions.
"Residual Majority": At any time, the Holders of a majority (by
Percentage Interests) of the Residual Certificates.
"Residual Transferee Agreement": A certification and agreement required
to be executed and delivered by the prospective transferee of a Residual
Certificate pursuant to Section 5.05(c) hereof, which must be substantially in
the form of Exhibit 7 hereto.
"RESPA": The Real Estate Settlement Procedures Act of 1974, as amended.
"Rule 144A": Rule 144A promulgated by the Securities and Exchange
Commission, as the same may be amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of
Exhibit 4 hereto.
"Rule 144A Certificates": Any Class of Certificates of a Series
designated as such in the related Pooling and Servicing Agreement.
"Sales Agreement": A Sales Agreement pursuant to which the Seller sells
Mortgage Loans to the Depositor for inclusion in a Trust.
"Scheduled Principal Balance": For any Series, as defined in the
Pooling and Servicing Agreement.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": As to any Asset included in the Trust Estate for a Series,
the entity that sold such Asset to the Depositor under a Sales Agreement, which
will be Union Planters Bank, N.A. unless otherwise specified in the
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related Pooling and Servicing Agreement. For purposes of the definitions of
"Mortgage Loan Documents" herein, documents (including, without limitation,
assignments and endorsements) indicating assignment or endorsement to, or the
existence of a security interest in, a name that is a registered trade name of
the Seller in the relevant jurisdiction shall satisfy any requirement of these
Standard Terms that such documents reflect the name of the "Seller."
"Series": A separate Series of Certificates issued pursuant to a
Pooling and Servicing Agreement, which Series may, as provided therein, be
divided into two or more Classes.
"Servicing Advances": Advances required to be made by the Master
Servicer as described in Section 3.04(b) hereof, including, but not limited to,
advances for the payment of personal property taxes, real estate taxes and
premiums for Standard Hazard Insurance Policies and other insurance and guaranty
premiums, if any.
"Servicing Fee": On each Distribution Date for each Asset, the product
obtained by multiplying (a) the Servicing Fee Rate by (b) the Scheduled
Principal Balance of such Asset as of the first day of the related Collection
Period.
"Servicing Fee Rate": A per annum rate, to be specified in each Pooling
and Servicing Agreement.
"Shortfall": Due Date Interest Shortfall and Soldiers' and Sailors'
Shortfall.
"Soldiers' and Sailors' Shortfall": Interest losses on a Mortgage Loan
resulting from application of the Soldiers' and Sailors' Civil Relief Act of
1940.
"Special Hazard Insurance Policy": An insurance policy covering a
Mortgage Loan against loss by reason of fire, lightning, explosion, smoke,
windstorm, hail, riot, strike and civil commotion.
"Special Hazard Loss": A loss incurred on a Mortgage Loan attributable
to physical damage to the related Mortgaged Property of a type which is not
covered by standard hazard insurance policies, excluding losses caused by war,
nuclear reaction, nuclear or atomic weapons, insurrection or normal wear and
tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Holder's Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed
transaction or activity will not (a) affect adversely the status of the REMIC as
a REMIC or the related Regular Certificates as the regular interests therein,
(b) affect the timing or amount of distributions of interest or principal on
such Regular Certificates, or (c) result in the encumbrance of the Assets by a
tax lien.
"Standard Hazard Insurance Policy": With respect to each Asset, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if applicable) required to be maintained for the related Mortgaged Property, as
provided herein, which may be a blanket mortgage impairment policy maintained by
the Servicer in accordance with the terms and conditions of the Pooling and
Servicing Agreement.
"Standard Terms": These Standard Terms to Pooling and Servicing
Agreement and all exhibits, schedules and appendices hereto, as amended and
supplemented from time to time.
"Startup Day": The Startup Day (within the meaning of Code section
860G(a)(9)) is the Closing Date.
"Tax Matters Person": The Person or Persons designated from time to
time hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the REMIC.
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"Terminating Purchase": The purchase of all Mortgage Loans and each REO
Property owned by a Trust pursuant to Section 9.01 hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last REO Property remaining in the Trust is made are deposited. The Termination
Account shall be an Eligible Account.
"Termination Date": Any Distribution Date fixed for termination of the
Trust pursuant to the provisions of Sections 9.01 and 9.02 hereof.
"Termination Price": With respect to any Terminating Purchase, the
greater of (1) the sum of (a) any Liquidation Expenses incurred by the Master
Servicer in respect of any Asset that has not yet been liquidated, (b) all
amounts required to be reimbursed or paid to the Master Servicer in respect of
previously unreimbursed Servicing Advances, plus (c) the sum of (i) 100% of the
aggregate of the Unpaid Principal Balance of each Asset remaining in the Trust
on the day of such purchase, plus accrued interest thereon at the related Asset
Rate through the end of the Interest Accrual Period relating to the Termination
Date, plus (ii) the lesser of (A) the aggregate of the Unpaid Principal Balances
of each Asset relating to any REO Property remaining in the Trust, plus accrued
interest thereon at the related Asset Rate through the end of the Interest
Accrual Period related to the Termination Date and (B) the current appraised
value of any such REO Property (net of Liquidation Expenses to be incurred in
connection with the disposition of such REO Property, estimated in good faith by
the Master Servicer), such appraisal to be conducted by an appraiser mutually
agreed upon by the Master Servicer and the Trustee, plus all previously
unreimbursed P&I Advances made in respect of such REO Property and (2) the
aggregate fair market value of all of the assets of the Trust (as determined by
the Master Servicer as of the close of business on the third Business Day
preceding the date upon which notice of any such purchase is furnished to
Certificateholders pursuant to Section 9.01(c) hereof), plus all previously
unreimbursed P&I Advances made with respect to the Assets. The fair market value
of the assets of the Trust shall be deemed to include accrued interest through
the end of the Interest Accrual Period related to the Termination Date at the
applicable Asset Rate on the unpaid principal balance of each Asset (including
any Asset that became a REO Property, which REO Property has not yet been
disposed of by the Master Servicer). The basis for any such valuation shall be
furnished by the Master Servicer to the Certificateholders upon request.
"Terminator": The Person making a Terminating Purchase or causing such
Terminating Purchase to be made.
"TIN": Taxpayer identification number.
"Title Insurance Policy": For any Mortgage Loan, an American Land Title
Association mortgagee's mortgage loan title policy form 1970, or other form of
mortgagee's title insurance acceptable to Fannie Mae or Freddie Mac for the
jurisdiction in which the subject property is located, including all riders and
endorsements thereto, insuring that the related Mortgage creates a valid first
lien on the underlying Mortgaged Property subject only to Permitted
Encumbrances.
"Transferee Agreement": An agreement substantially in the form of
Exhibit 5 hereto.
"Treasury": The United States Department of the Treasury.
"Trust": The trust created pursuant to the terms of a Pooling and
Servicing Agreement.
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"Trust Estate": The segregated pool of assets sold and assigned to a
Trustee by the Depositor pursuant to the conveyance clause of any Pooling and
Servicing Agreement.
"Trustee": The bank or trust company identified as the trustee under
any Pooling and Servicing Agreement.
"Trustee Fee": On each Distribution Date for each Asset, the product
obtained by multiplying (a) the Trustee Fee Rate by (b) the Scheduled Principal
Balance of such Asset as of the first day of the related Collection Period.
"Trustee Fee Rate": A per annum rate, to be specified in the related
Pooling and Servicing Agreement.
"Trustee Mortgage Loan File": As to each Mortgage Loan, a file
containing all of the related Mortgage Loan Documents.
"UCC": The Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Unpaid Principal Balance": With respect to any Asset, the outstanding
principal balance payable by the related Obligor pursuant to the terms of such
Asset.
"U.S. Person": A Person other than a Non-U.S. Person.
"USAP": As defined in Section 3.12 hereof.
"VA": The United States Department of Veterans Affairs.
"VA Asset": An Asset guaranteed in whole or in part by the VA.
"VA Guaranty": As to any VA Asset, VA's full or partial guaranty of
payment of amounts due thereunder.
"Voting Rights": With respect to any Certificate, the portion of the
voting rights of all of the Certificates of the related Series that is allocated
to such Certificate, as specified in the related Pooling and Servicing
Agreement. Voting Rights allocated to each Class of Certificates shall be
allocated among the Certificates of such Class in proportion to the respective
Percentage Interests of the Holders thereof.
"Withholding Agent": The Trustee or its designated Paying Agent or
other Person who is liable to withhold federal income tax from a distribution on
a Residual Certificate under sections 1441 or 1442 of the Code and the
Regulations promulgated thereunder.
SECTION 1.02. INTEREST CALCULATIONS.
Unless otherwise specified, all calculations described herein shall be
made on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE II
THE ASSETS
SECTION 2.01. ASSIGNMENT OF ASSETS.
Pursuant to a Pooling and Servicing Agreement, the Depositor has sold
to the Trust without recourse all the right, title and interest of the Depositor
in and to the Assets identified in such Pooling and Servicing Agreement, any and
all rights, privileges and benefits accruing to the Depositor under the Sales
Agreement(s) with respect to such Assets (except any rights of the Depositor to
fees payable by the Seller under such Sales Agreement and provided that the
Depositor shall retain its rights to indemnification from the Seller under such
Sales Agreement, but shall also convey rights to such indemnification to the
Trust as its assignee), including the rights and remedies with respect to the
enforcement of any and all representations, warranties and covenants under such
Sales Agreements and assets included or to be included in the related Trust for
the benefit of the related Certificateholders as set forth in the conveyance
clause of the related Pooling and Servicing Agreement. Such assignment includes
all of the Depositor's rights to payments due with respect to the Assets after
the Cut-off Date.
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SECTION 2.02. THE MORTGAGE LOANS.
(a) Custody of Trustee Mortgage Loan Files. In connection with the
transfer and assignment of the Mortgage Loans from the Depositor to the Trustee,
the Depositor shall deliver, or cause to be delivered, to the Trustee or its
Custodian on or before the Closing Date, a Trustee Mortgage Loan File containing
each of the documents listed in the definition thereof. If any Mortgage or any
prior Assignment is in the process of being recorded on the Closing Date, the
Depositor shall cause each such original recorded document or certified copy
thereof, to be delivered to the Trustee or its Custodian promptly following its
recordation. The Depositor shall also cause to be delivered to the Trustee any
other original Mortgage Loan Document to be included in the Trustee Mortgage
Loan File if a copy thereof initially was delivered.
In lieu of recording an Assignment of any Mortgage for any Mortgage
Loan, the Depositor may deliver or cause to be delivered to the Trustee or its
Custodian the Assignment of the Mortgage from the Seller to the Trustee in a
form suitable for recordation; provided, however, that the Depositor shall use
its best efforts within 30 days of the occurrence of an Assignment Event, and in
any event within 60 days of the occurrence of an Assignment Event, to either (i)
arrange for the Master Servicer to record the Assignment of each Mortgage in
favor of the Trustee in the appropriate real property office or other records
office or (ii) deliver to the Trustee an Opinion of Counsel to the effect that
recording is not required to protect the Trustee's right, title and interest in
and to the related Mortgage Loans or, in the event a court should recharacterize
the conveyance of the Mortgage Loans as a loan or a security for a loan, to
perfect a first priority security interest in favor of the Trustee in the
related Mortgage Loan. With respect to any Assignment of Mortgage as to which
the related recording information is unavailable within the applicable time
period set forth above, such Assignment of Mortgage shall be submitted for
recording within 30 days after receipt of such information but in no event later
than one year after the date such Assignment of Mortgage is otherwise required
to be recorded pursuant to this Section. The Trustee shall be required to retain
a copy of each Assignment of Mortgage submitted for recording. In the event that
any such Assignment of Mortgage is lost or returned unrecorded because of a
defect therein, the Seller shall promptly prepare a substitute Assignment or
cure such defect, as the case may be, and thereafter the Seller shall be
required to submit each such Assignment for recording. Any failure of the Seller
to comply with this Section 2.02(a) shall result in the obligation of the Seller
to purchase or substitute for the related Mortgage Loans pursuant to the
provisions of Section 2.05(a)(1).
By its execution of the Pooling and Servicing Agreement for a Series,
the Trustee acknowledges and declares that it or the Custodian holds and will
hold or has agreed to hold all documents delivered to it from time to time with
respect to a Mortgage Loan underlying such Series and all other assets delivered
to it or its Custodian and that are included in the definition of "Trust Estate"
in the related Pooling and Servicing Agreement in trust for the exclusive use
and benefit of all present and future Certificateholders of the related Series.
(b) Custody of Master Servicer Mortgage Loan Files. The Master Servicer
has in its possession a Master Servicer Mortgage Loan File for each Mortgage
Loan containing each of the documents listed in the definition thereof. All such
documents shall be held by the Master Servicer in trust for the benefit of the
Trustee on behalf of the Certificateholders of the related Series.
(c) Review of Trustee Mortgage Loan Files.
(i) Initial Certification. The Trustee shall, for the benefit
of the Certificateholders for any Series, review each related Trustee
Mortgage Loan File prior to the related Closing Date to ascertain that
all documents required to be included in the Trustee Mortgage Loan File
(other than documents noted in (G) below and any flood insurance
policy) are included therein, and shall deliver to the Depositor and
the Master Servicer on such Closing Date an Initial Certification with
respect to each underlying Mortgage Loan (except any Mortgage Loan that
has been liquidated or purchased from the related Trust prior to such
Closing Date) to the effect that, except as specifically noted on a
schedule of exceptions thereto, (A) all documents required to be
contained in the Trustee Mortgage Loan File (other than documents noted
in (G) below and any flood insurance policy) are in its possession, (B)
such documents have been reviewed by it and appear regular on their
face and relate by loan number to such Mortgage Loan, and (C) based on
its
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examination and only as to the foregoing documents, the information set
forth on the related Mortgage Loan Schedule accurately reflects
information set forth in the Trustee Mortgage Loan File.
It is understood that before making the Initial Certification
for any Series, the Trustee shall examine the related Mortgage Loan
Documents to confirm that:
(A) each Mortgage Note and Mortgage bears an original
or reproduction signature or signatures purporting to be that
of the Person or Persons named as the maker and
mortgagor/trustor;
(B) except for the endorsement to the Trustee, if
any, neither the Mortgage Note, the Mortgage nor any
Assignment, on the face or the reverse side(s) thereof,
contain evidence of any unsatisfied claims, liens, security
interests, encumbrances or restrictions on transfer;
(C) the principal amount of the indebtedness secured
by the related Mortgage is identical to the original principal
amount of the related Mortgage Note;
(D) the Assignment of the related Mortgage from the
Seller to the Trustee is in the form required pursuant to
clause (c) of the definition of Trustee Mortgage Loan File,
and bears an original or reproduction signature of the Seller
and any other necessary party (or signatures purporting to be
that of the Seller and any such other party);
(E) if intervening Assignments are included in the
Trustee Mortgage Loan File, each such intervening Assignment
bears an original or reproduction signature of the related
mortgagee and/or the assignee (and any other necessary party)
(or signatures purporting to be that of the Seller and any
such other party);
(F) if either a Title Insurance Policy, a preliminary
title report or a written commitment to issue a Title
Insurance Policy is delivered, the address of the real
property set forth in such policy, report or written
commitment is identical to the real property address contained
in the related Mortgage; and
(G) if any of a Title Insurance Policy, certificate
of title insurance or a written commitment to issue a Title
Insurance Policy is delivered, such policy, certificate or
written commitment is for an amount not less than the original
principal amount of the related Mortgage Note and such Title
Insurance Policy insures that the related Mortgage creates a
first lien, senior in priority to all other deeds of trust,
mortgages, deeds to secure debt, financing statements and
security agreements and to any mechanics' liens, judgment
liens or writs of attachment (or if the Title Insurance Policy
or certificate of title insurance has not been issued, the
written commitment for such insurance obligates the insurer to
issue such policy for an amount not less than the original
principal amount of the related Mortgage Note).
(ii) Final Certification. Prior to the first anniversary date
of the Closing Date for a Series, the Trustee shall deliver to the
Depositor and the Master Servicer a Final Certification evidencing the
completeness of the Trustee Mortgage Loan File for each Mortgage Loan,
with any applicable exceptions noted on such Final Certification.
(iii) Certifications Generally. In giving each of the Initial
Certification and the Final Certification with respect to a Series, the
Trustee shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereon are genuine, enforceable,
or appropriate for the represented purpose or that they have actually
been recorded or that they are other than what they purport to be on
their face or (B) to determine whether any Trustee Mortgage Loan File
should include any assumption agreement, modification agreement,
written assurance or substitution agreement or flood insurance.
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<PAGE> 26
(iv) Custodians. In lieu of taking possession of the Trustee
Mortgage Loan Files and reviewing such files itself, the Trustee may,
in accordance with Section 8.11 hereof, appoint one or more Custodians
to hold the Trustee Mortgage Loan Files for a Series on its behalf and
to review them as provided in this Section 2.02. The Depositor shall,
upon notice of the appointment of a Custodian, deliver or cause to be
delivered all documents to the Custodian that would otherwise be
deliverable to the Trustee. In such event, the Trustee shall obtain
from each such Custodian, within the specified times, the Initial and
Final Certifications with respect to those Mortgage Loans held and
reviewed by such Custodian and may deliver such Certifications to the
Depositor and the Master Servicer in satisfaction of the Trustee's
obligation to prepare such Certification. The Trustee shall notify the
Custodian of any notices delivered to the Trustee with respect to those
Trustee Mortgage Loan Files.
SECTION 2.03. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee acknowledges receipt of the Trustee Mortgage Loan Files and
declares that it, or its agent, holds and will hold such documents and papers
delivered to it in trust for the use and benefit of all present and future
Certificateholders of the related Series.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES AS TO ASSETS.
The Depositor represents and warrants to the Trustee, effective as of
the Closing Date, that the following information is true and correct in all
material respects:
(a) The information pertaining to each Asset set forth in the Asset
Schedule was true and correct at the date or dates respecting which such
information was furnished.
(b) The Depositor is the owner of, or holder of a perfected first
priority security interest in, each Asset.
(c) The Depositor acquired its ownership of, or security interest in,
each such Asset in good faith without notice of any adverse claim.
(d) Except for the sale to the Trustee, the Depositor has not assigned
any interest or participation in each such Asset (or, if any such interest or
participation has been assigned, it has been released).
(e) The Depositor has full right to sell the Trust Estate to the
Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Trustee
Mortgage Loan Files to the Trustee or its Custodian and shall inure to the
benefit of the Trust notwithstanding any restrictive or qualified endorsement or
assignment. Upon the discovery by the Depositor, the Master Servicer or the
Trustee of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to the other
parties to the Pooling and Servicing Agreement. It is understood and agreed that
the obligations of the Depositor set forth in Section 2.05 to cure, substitute
for or repurchase an Asset constitute the sole remedies against the Depositor
available to the Certificateholders or to the Trustee on their behalf respecting
a breach of the representations and warranties contained in this Section 2.04.
It is further understood and agreed that the Depositor shall be deemed not to
have made the representations and warranties in this Section 2.04 with respect
to, and to the extent of, representations and warranties made, as to the matters
covered in this Section 2.04, by the Seller in the related Sales Agreement
assigned to the Trust.
SECTION 2.05. PURCHASE OR SUBSTITUTION OF CERTAIN ASSETS.
(a) Breaches of Representations and Warranties and Incomplete or
Defective Asset Files.
(i) Seller Breach. Upon discovery or receipt of notice of any
missing or defective document in an Asset File, or of any breach by the
Seller of any representation, warranty or covenant hereunder or
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under the Sales Agreement, which defect or breach materially and
adversely affects the value of any Asset or the interest of the Trust
therein (it being understood that any such defect or breach shall be
deemed to have materially and adversely affected the value of the
related Asset or the interest of the Trust therein if the Trust incurs
a loss as a result of such defect or breach), the Trustee upon actual
knowledge thereof shall promptly notify the Master Servicer of such
absence or defect or breach and direct the Master Servicer to request
the Seller of such Asset to cure such defect or breach. For purposes of
this subsection, a document in any Asset File shall not be considered
missing until the Trustee delivers its Final Certification, unless such
missing document creates a materially adverse consequence to any
Certificateholder. The Seller must cure such defect or breach, or
purchase such Asset from the Trust, within 90 days after the date on
which the Seller was notified of such defect or breach. In lieu of
purchasing any such Asset as provided above, if so provided in the
related Sales Agreement, the Seller may cause such Asset to be removed
from the Trust (in which case it shall become a Replaced Asset) and
substitute one or more Qualified Substitute Assets in the manner and
subject to the limitations set forth in Section 2.05(g) below.
Notwithstanding the foregoing, however, if such breach is a
Qualification Defect and one or more REMIC elections have been made
with respect to the related Trust, such cure, purchase or substitution
must take place within 75 days of the Defect Discovery Date. It is
understood and agreed that enforcement of the obligation of the Seller
to cure or to purchase (or to substitute for) any Asset as to which a
material defect in a constituent document exists or as to which such a
breach has occurred and is continuing, in addition to the obligation of
the Seller to indemnify the Depositor and its assignees (including the
Trust) for any losses and damages incurred in respect of any such
breach or defect, shall constitute the sole remedy against the Seller
respecting such defect or breach available to the Trustee on behalf of
the Certificateholders. The Master Servicer shall use its best efforts
to enforce the Seller's obligations under its Sales Agreement to
repurchase or substitute for Assets affected by breaches of the
Seller's representations and warranties contained in its Sales
Agreement, and to enforce the Seller's obligations to indemnify the
Trust (as the assignee of the Depositor under the Sales Agreement) for
any losses or damages it incurs as a result of breaches of the Seller's
representations and warranties contained in its Sales Agreement.
(ii) Master Servicer Breach. In addition to taking any action
required pursuant to Section 7.01 hereof, upon discovery or notice of
any breach by the Master Servicer of any representation, warranty or
covenant hereunder not covered by Section 2.05(a)(i) above that
materially and adversely affects the value of any Asset or the interest
of the Trust therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the
value of the related Asset or the interest of the Trust therein if the
Trust incurs a loss as a result of such defect or breach), the Trustee
upon actual knowledge thereof promptly shall notify the Master Servicer
of such breach. Upon receipt of such notification, the Master Servicer
shall cure such breach or shall purchase such Asset from the Trust
within 90 days after the date on which the Master Servicer was notified
of such breach. Notwithstanding the foregoing, however, if such breach
is a Qualification Defect and one or more REMIC elections have been
made with respect to the related Trust, such cure or purchase must take
place within 75 days of the Defect Discovery Date.
In the event the Seller has breached a representation or
warranty under its Sales Agreement that is substantially identical to a
representation or warranty breached by the Master Servicer, the Master
Servicer shall first proceed against the Seller. If the Seller does not
within 60 days after notification of the breach, take steps to cure
such breach or purchase or substitute for the Mortgage Loan, the Master
Servicer shall cure such breach or purchase the Mortgage Loan from the
Trust as provided in this Section 2.05(a)(2).
(iii) Depositor Breach. Within 90 days after the earlier of
discovery or receipt of notice by the Depositor of the breach of any of
its representations or warranties set forth in Section 2.04 above with
respect to any Asset, which breach materially and adversely affects the
value of the Asset or the interest of the Trust therein (it being
understood that any such breach shall be deemed to have materially and
adversely affected the value of the related Asset or the interest of
the Trust therein if the Trust incurs a loss as a result of such defect
or breach), the Depositor shall (i) cure such breach in all material
respects, (ii) purchase the Asset from the Trustee, or (iii) remove
such Asset from the Trust (in which case it shall become a Replaced
Asset) and substitute one or more Qualified Substitute Assets in the
manner and subject to the limitations set forth in Section 2.05(g)
below. Notwithstanding the foregoing, however, if such breach is a
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Qualification Defect and one or more REMIC elections have been made
with respect to the related Trust, such cure, purchase or substitution
must take place within 75 days of the Defect Discovery Date
(b) Converted Loans. Upon receipt of written notice from the Master
Servicer of the conversion of any Adjustable Rate Asset to a Converted Loan, the
Trustee shall direct the Master Servicer to enforce the related Seller's
obligation set forth in its Sales Agreement to purchase such Converted Loan from
the Trust, or the Master Servicer shall repurchase such Converted Loan from the
Trust. In the event the Master Servicer or Seller defaults upon its obligation
to purchase any Converted Loan, and, in the case of a Seller default, such
default remains unremedied for a period of five Business Days after written
notice of such default shall have been given by the Master Servicer to the
Seller, then the Master Servicer shall use its best efforts to cause such
Converted Loan to be sold for settlement on the last day of any month to any
entity which the Master Servicer may in its sole discretion select. The Master
Servicer shall not cause a Converted Loan to be sold or otherwise transferred to
a Person other than the Master Servicer or Seller (or other Person who has a
pre-existing obligation to purchase such loan) unless (i) upon such sale the
Trust would receive a net amount at least equal to the Repurchase Price of the
Converted Loan and (ii) if the Repurchase Price of the Converted Loan exceeds
the related Basis Limit Amount, the Master Servicer receives an Opinion of
Counsel that such disposition of a Converted Loan will not result in the
imposition of a "prohibited transaction" tax (as such term is defined in the
Code) on any related REMIC or jeopardize its status as a REMIC. Any such
Converted Loan which is not purchased by the Master Servicer or the Seller and
which the Master Servicer is unable to sell as described in the second preceding
sentence shall remain in the Trust.
(c) Manner of Repurchase. Any Asset purchased pursuant to Section
2.04(a), (b), (c), (d) or (e) hereof shall be purchased at the Repurchase Price
for such Asset. The Seller, the Depositor or the Master Servicer, as appropriate
(any of the foregoing, a "Repurchaser"), shall deposit into the Certificate
Account, on the date of purchase, the Repurchase Price for each Asset to be
purchased. Upon such deposit and upon being provided by the Repurchaser with
notice thereof and the appropriate instruments of transfer or assignment, the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as shall be necessary to vest in the Repurchaser any
Asset purchased hereunder, and the Trustee shall deliver to the Repurchaser any
Asset Documents relating to the repurchased Asset that are in the Trustee's
possession, whereupon the Trustee shall have no further responsibility with
regard to such Asset. Except as provided in this Section 2.05(f), if a
Repurchaser shall, in accordance with the foregoing, purchase any Asset required
by it to be purchased, neither the Trustee nor any Certificateholder shall have
any other remedy against such Repurchaser based on any misrepresentation or
breach of covenant or warranty of such Repurchaser with respect to or resulting
from any such Asset.
The Master Servicer will be responsible for determining the Repurchase
Price for any Asset (and the related Basis Limit Amount for any Converted Loan)
to be repurchased pursuant to this Section 2.05 and shall certify in writing
such amounts to the Trustee at the time of any such purchase. If, for whatever
reason, the Master Servicer shall certify to the Trustee that there is a
miscalculation of the amount to be paid to the Trust, the Master Servicer may
withdraw from monies in the Certificate Account any overpayment that the Trust
received as a result of such miscalculation to the applicable Repurchaser upon
the discovery of such overpayment, and the Master Servicer shall collect from
the applicable Repurchaser for payment to the Trustee any underpayment that
resulted from such miscalculation upon the discovery of such underpayment and
deposit such amount into the Certificate Account. Recovery may be made either
directly or by set-off of all or any part of such underpayment against amounts
owed by the Trust to such Repurchaser.
Any Repurchaser shall indemnify and hold harmless the Trustee from and
against any and all losses or liabilities incurred by the Trustee (including any
such losses or liabilities arising from third-party claims) with respect to or
resulting from any repurchase hereunder.
(d) Manner of Substitution. Unless otherwise provided in the Pooling
and Servicing Agreement, the right to substitute a Qualified Substitute Asset
for any Replaced Asset that is an asset of the Trust shall be limited to (1) in
the case of substitutions pursuant to Section 2.05(a) or 2.05(c), the two-year
period beginning on the Closing Date and (2) in the case of any other
substitution, the three-month period beginning on the Closing Date.
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As to any Replaced Asset for which the Depositor or the Seller
substitutes a Qualified Substitute Asset or Assets, the Depositor or the Seller,
as the case may be, shall effect such substitution by delivering to the Trustee
for such Qualified Substitute Asset or Assets a complete Trustee Mortgage Loan
File, together with an Officer's Certificate of the Depositor or the Seller, as
the case may be, to the effect that each such Qualified Substitute Asset
complies with the terms of the Pooling and Servicing Agreement. Monthly Payments
due with respect to Qualified Substitute Assets in the month of substitution are
not part of the Trust and will be retained by the Depositor or the Seller, as
the case may be. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Replaced Asset
during the month in which the substitution occurs, and the Depositor or the
Seller, as the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Replaced Asset. The Master Servicer
shall amend the Asset Schedule to reflect the removal of such Replaced Asset
from the terms of the Pooling and Servicing Agreement and the substitution of
the Qualified Substitute Asset or Assets. Upon such substitution, such Qualified
Substitute Asset or Assets shall be subject to the terms of the Pooling and
Servicing Agreement in all respects, including, in the case of a substitution
effected by the Seller, the representations and warranties included in the
related Sales Agreement, and in the case of a substitution effected by the
Depositor, the representations and warranties set forth in Section 2.04 above,
in each case as of the date of substitution. The Trustee shall, within five
Business Days of its receipt of the documents referred to above, effect the
reconveyance of such Replaced Asset to the Depositor or the Seller, as the case
may be, in accordance with the procedures specified above.
For any month in which the Depositor or the Seller substitutes one or
more Qualified Substitute Assets for one or more Replaced Assets, the Master
Servicer will determine and notify the Trustee with respect to the amount (if
any) by which the aggregate Unpaid Principal Balance of all such Qualified
Substitute Assets as of the date of substitution is less than the aggregate
Unpaid Principal Balance of all such Replaced Assets (after application of
Monthly Payments due in the month of substitution) (the "Substitution
Shortfall"). On the date of such substitution, the Depositor or the Seller, as
the case may be, will deliver or cause to be delivered to the Trustee for
deposit from its own funds into the Distribution Account an amount equal to the
Substitution Shortfall.
(e) Qualification Defect. If any Person required to cure, purchase, or
substitute under Section 2.05(a) above for an Asset affected by a Qualification
Defect fails to perform within the time limit set forth in those subsections,
the Master Servicer shall dispose of such an Asset in such manner and for such
price as the Master Servicer determines are appropriate, provided that the
removal of such Asset occurs no later than the 90th day from the Defect
Discovery Date. It is the express intent of the parties that an Asset affected
by a Qualification Defect be removed from the Trust before the 90th day from the
Defect Discovery Date so that the related REMIC or Pooling REMIC will continue
to qualify as a REMIC. Accordingly, the Master Servicer is not required to sell
an affected Asset for its fair market value nor shall the Master Servicer be
required to make up any shortfall resulting from the sale of such Asset. The
person failing to perform under Section 2.05(a) above shall be liable to the
Trust for (1) any difference between (A) the Unpaid Principal Balance plus
accrued and unpaid interest thereon at the applicable Asset Rate to the date of
disposition and (B) the net amount received by the Master Servicer from the
disposition (after the payment of related expenses), (2) interest on such
difference at the Asset Rate from the date of disposition to the date of payment
and (3) any legal and other expenses incurred by or on behalf of the Trust in
seeking such payments. Except where the Master Servicer is the person failing to
perform, the Master Servicer shall pursue the legal remedies of the Trust on the
Trust's behalf and the Trust shall reimburse the Master Servicer for any legal
or other expenses of the Master Servicer related to such pursuit not recovered
from such person. If the Master Servicer is the person failing to perform, the
Trustee shall pursue the Trust's legal remedies against the Master Servicer and
the Trust shall reimburse the Trustee for its related legal or other expenses.
(f) Notices. Any person required under this Section 2.05 to give notice
or to make a request of another person to give notice shall give such notice or
make such request promptly.
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ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
SECTION 3.01. THE MASTER SERVICER.
The Master Servicer agrees to service the Assets for and on behalf of
the Trustee and its successors and assigns, and otherwise to perform and carry
out the duties, responsibilities and obligations that are to be performed and
carried out by the Master Servicer under the Pooling and Servicing Agreement.
The Master Servicer shall service the Mortgage Loans (a) generally in compliance
with Fannie Mae standards (and, in the case of FHA Loans or VA Loans, FHA and VA
standards, respectively) and (b) in a manner that is consistent with prudent
residential mortgage loan servicing standards generally accepted within the
residential mortgage loan servicing industry. A summary of the Master Servicer's
collections and loss mitigation procedures is annexed hereto as Exhibit 9. The
manner in which the Master Servicer services the Assets shall be consistent with
the manner in which the Master Servicer services all similar residential
mortgage loans in its servicing portfolio, except for any differences
specifically required by the Pooling and Servicing Agreement. The Master
Servicer shall have full power and authority consistent with the aforementioned
standards, acting alone and/or through agents and designees as permitted by
Section 6.07 hereof, to do any and all things it may deem necessary or desirable
in connection with such servicing and administration; provided, however, that to
the extent the Master Servicer is prohibited by any applicable rule, regulation,
judicial or administrative determination or other order applicable to it from
carrying out any of its obligations or duties provided for herein or in any
document contemplated herein, such failure shall not constitute a breach of this
Agreement.
The Master Servicer may agree to modify, waive or amend any term of any
Mortgage Loan in a manner consistent with the servicing standard described
herein so long as the modification, waiver or amendment will not (i) affect the
timing of any scheduled payments of principal or interest on the Mortgage Loan,
(ii) in its judgment, materially impair the security for the Mortgage Loan or
reduce the likelihood of timely payment of amounts due thereon or (iii) cause
the Trust to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup date" under
the REMIC Provisions. The Master Servicer also may agree to any modification,
waiver or amendment that would so affect or impair the payments on, or the
security for, a Mortgage Loan if, (i) in its judgment, a material default on the
Mortgage Loan has occurred or a payment default is imminent and (ii) in its
judgment, such modification, waiver or amendment is reasonably likely to produce
a greater recovery on a present value basis than would liquidation. The Master
Servicer promptly shall notify the Trustee in the event of any modification,
waiver or amendment of any Mortgage Loan.
With the consent of the Trustee, the Master Servicer may hire a
sub-servicer pursuant to a sub-servicing agreement, the terms of which must be
consistent with the terms of the Pooling and Servicing Agreement. Each
sub-servicing agreement must meet standards applicable to sub-servicing for FHA
Assets and VA Assets and must provide that the Trustee will not be obligated to
assume the duties of the Master Servicer thereunder. Each sub-servicer (i) must
be a FNMA, FHLMC, VA and FHA approved servicer, (ii) must not be excluded from
participation in federal non-procurement programs pursuant to a determination of
ineligibility under statutory or regulatory authority or executive order, (iii)
must have a current mortgage loan servicing portfolio aggregating at least
$50,000,000 (exclusive of the Mortgage Loans), (iv) must be a HUD approved
mortgagee and (v) in the best judgment of the Master Servicer, must be capable
of servicing the Mortgage Loans and be experienced in servicing loans of a
similar nature and quality. References in this Pooling and Servicing Agreement
to actions taken or to be taken by the Master Servicer in servicing the Mortgage
Loans include actions taken or to be taken by a sub-servicer on behalf of the
Master Servicer. With the approval of the Master Servicer and the Trustee, a
sub-servicer may delegate its servicing duties to third-party servicers, but a
sub-servicer must remain obligated under its sub-servicing agreement with the
Master Servicer notwithstanding any such delegation. In the event of any such
delegation, references in this Pooling and Servicing Agreement to actions taken
or to be taken by sub-servicers in servicing the Mortgage Loans shall include
actions taken or to be taken by such third parties. The Master Servicer shall
deliver to the Trustee and to the Depositor copies of each sub-servicing
agreement and each amendment thereto proposed by the Master Servicer or any
sub-servicer at least ten days prior to adoption or execution thereof, and shall
provide execution copies thereof to the Trustee and to the Depositor promptly
after execution thereof.
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With respect to any such sub-servicing arrangement between the Master
Servicer and any sub-servicer, the Master Servicer shall remain liable for the
performance of its duties hereunder, and any collections received by a
sub-servicer shall be deemed to have been received by the Master Servicer.
Each of the Master Servicer and the Depositor shall be entitled to
terminate any sub-servicing agreement in accordance with the terms and
conditions thereof; provided, however, that in the event of termination of any
sub-servicing agreement, the Master Servicer shall either act as servicer of the
related Mortgage Loans or enter into a sub-servicing agreement with a successor
sub-servicer. Nothing contained herein shall prohibit the Master Servicer from
increasing or decreasing the number of sub-servicers servicing the Mortgage
Loans.
SECTION 3.02. MAINTENANCE OF RECORDS; INSPECTION OF ASSET FILES.
(a) The Master Servicer shall retain all data relating directly to or
maintained in connection with the servicing of the Assets for any Series at the
address of the Master Servicer set forth in Section 11.04 hereof or at such
other place where the servicing offices of the Master Servicer are located.
The Master Servicer shall permit the Trustee or any authorized agent of
the Trustee reasonable access, upon prior written notice to the Master Servicer,
during the Master Servicer's normal business hours, to the Asset Files, the
Master Servicer Mortgage Loan Files, and the Master Servicer's other records, if
any, relating to the Assets for any related Series. Any such examination of such
files or records will be conducted in a manner that does not unreasonably
interfere with the Master Servicer's normal operations or customer or employee
relations. Without otherwise limiting the scope of the examination the Trustee
may make, the Trustee or its authorized agents, using generally accepted audit
procedures, may in their discretion verify the status of each Asset and review
the records relating thereto for conformity to Remittance Reports prepared
pursuant to Article IV hereof and compliance with the standards represented to
exist as to each Asset in the Pooling and Servicing Agreement.
(b) At all times during the term hereof, the Master Servicer shall keep
available a copy of the Asset Schedule at its principal executive office for
inspection by Certificateholders.
(c) On or before the date of the Master Servicer's delivery of the
Remittance Report to the Trustee in any month, the Master Servicer will, upon
the written request of the Trustee, provide to the Trustee a list of outstanding
Assets, setting forth the Scheduled Principal Balance of each such Asset as of
the end of the Collection Period relating to the preceding Distribution Date.
(d) Notwithstanding the provisions of this Section 3.02, the Trustee
shall at no time have any duty or obligation to examine any records of the
Master Servicer or to recalculate or otherwise verify the accuracy of any
certificate or report prepared by the Master Servicer, and no implied duty to do
so shall be asserted against the Trustee.
(e) On or before the Closing Date for a Series, the Master Servicer
shall deliver to the Trustee a list of Officers of the Master Servicer (each a
"Servicing Officer") involved in, or responsible for, the administration and
servicing of the Assets underlying such Series, which list shall be amended from
time to time as necessary by the Master Servicer by delivery of an amended list
of Servicing Officers to the Trustee.
SECTION 3.03. COLLECTION OF PAYMENTS ON ASSETS; SERVICING DELINQUENT ACCOUNTS.
(a) Continuously from the Cut-off Date until the earliest to occur of
the following with respect to each Asset sold to the Trust in connection with
the issuance of the Certificates: (i) the principal and interest on such Asset
is paid in full, (ii) such Asset is foreclosed and the related Mortgaged
Property is liquidated pursuant to Section 3.08 hereof, (iii) all of the
proceeds of a liquidating claim under the Standard Hazard Insurance Policy
relating to such Asset have been deposited to the Certificate Account, or (iv)
the Liquidation Proceeds relating to such Asset have been deposited to the
Certificate Account, the Master Servicer will proceed diligently and in a manner
consistent with its standards for servicing Assets described in Section 3.01
above, to collect all payments due under each Asset
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when such payments become due and payable and to apply such payments in
accordance with Sections 3.05, 3.06 and 3.07 hereof.
(b) The Master Servicer shall have reasonable discretion to extend
appropriate relief to Obligors who encounter hardship and who are cooperative
and demonstrate proper regard for their obligations. The Master Servicer may
arrange with such an Obligor to extend the payment schedule for the related
Asset; provided, however, that any such extension must be made in accordance
with the Master Servicer's standards for servicing Assets described in Section
3.01 above; and provided further, that no such extensions may be made except to
the extent (1) that the Master Servicer has determined, in its reasonable
judgment, that the Obligor is in default or that default is reasonably
foreseeable with respect to such Asset in the absence of such relief, (2) that
the Due Date for the final Monthly Payment on such Asset is not extended beyond
the latest Final Scheduled Distribution Date for the related Series and (3) that
the grant of such extension is otherwise permissible under Section 10.02 hereof
and, if a REMIC election has been made in connection with the Asset, the REMIC
Provisions as in effect at the time of such extension, as evidenced by an
Opinion of Counsel delivered by the Master Servicer to the Trustee. Where the
Obligor is in default on an Asset notwithstanding such relief and the Master
Servicer has exhausted all reasonable means of inducing the Obligor to pay on a
timely basis, the Master Servicer shall begin acceleration of the Assets in
accordance with its terms and applicable laws.
SECTION 3.04. ADVANCES AND COMPENSATING INTEREST.
(a) P&I Advances. If any Obligor fails to make its Monthly Payment by
the Remittance Date, the Master Servicer shall deposit such amount in the
Distribution Account on or before such Remittance Date, as a "P&I Advance,"
unless the Master Servicer, in its reasonable judgment, determines that any such
P&I Advance would be a Non-Recoverable Advance, or such Monthly Payment can be
offset by Early Payments, as provided in Section 3.07(c) hereof. In addition, if
the Certificate Account is maintained with the Trustee, the Master Servicer may
instruct the Trustee to use any investment earnings otherwise to be paid to the
Master Servicer on such account to defray its P&I Advance obligation, and the
Trustee shall honor any such instructions (including standing instructions).
(b) Servicing Advances. If any Obligor is in default in the payment of
premiums on its Standard Hazard Insurance Policy or Policies, insurance
premiums, or in the payment of real estate taxes, the Master Servicer may pay
such premiums or taxes out of its own funds. If any Obligor is in default in the
payment of premiums on its Standard Hazard Insurance Policy or Policies and
coverage is not provided in respect of the related Asset under a blanket policy
maintained by the Master Servicer pursuant to Section 3.15(a) below, or if any
Obligor is in default in the payment of personal property taxes or real estate
taxes due in respect of its Mortgaged Property, the Master Servicer shall pay
such premiums or taxes out of its own funds in a timely manner, as Servicing
Advances, unless the Master Servicer, in its reasonable judgment, determines
that any such Servicing Advance would be a Non-Recoverable Advance. In addition,
the Master Servicer shall pay in a timely manner, as Servicing Advances, any and
all personal property taxes and real estate taxes due in respect of any REO
Property it holds on behalf of the Trust and all premiums for any Standard
Hazard Insurance Policy maintained for such REO Property (except as similar
coverage may be provided under a blanket policy maintained by the Master
Servicer pursuant to Section 3.15 below) unless the Master Servicer, in its
reasonable judgment, determines that any such Servicing Advance would be a
Non-Recoverable Advance.
(c) Foreclosure Advances. If a foreclosure sale has been completed with
respect to any Government Insured Mortgage Loan, the Master Servicer shall
deposit the remaining Scheduled Principal Balance thereof, plus accrued interest
thereon (a "Foreclosure Advance"), in the Distribution Account on or before the
next succeeding Remittance Date. The Master Servicer thereafter shall be
entitled to reimbursement for any Foreclosure Advance out of claims proceeds
received in respect of the related Mortgage Loans.
(d) Recovery of Advances. The Master Servicer shall be entitled to
reimbursement for any Advances made by it in respect of any Asset out of late
collections from the related Obligor or from Insurance Proceeds, Liquidation
Proceeds or a Repurchase Price paid in respect of such Asset ("Related
Proceeds") and shall be entitled
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to reimburse itself for unreimbursed Advances made that have become
Non-Recoverable Advances in accordance with Section 3.07(a)(1) below.
(e) Non-Recoverable Advances. If the Master Servicer does not make an
Advance on the grounds that it is a Non-Recoverable Advance, or if an Advance
previously made by the Master Servicer is determined by the Master Servicer to
have become a Non-Recoverable Advance, then the Master Servicer shall provide
the Trustee with an Officer's Certificate stating this fact and stating the
basis upon which the Master Servicer determined that such Advance would be or
was a Non-Recoverable Advance. The Trustee shall not be responsible for
determining whether any such determination was reasonable.
(f) Compensating Interest. So long as Union Planters Bank, N.A., is the
Master Servicer of any Assets, then the Master Servicer shall deposit into the
Distribution Account for the related Series on or before each Remittance Date an
amount equal to Compensating Interest for such month. Compensating Interest
shall not be considered a Non-Recoverable Advance, and the Master Servicer shall
not be entitled to any recovery or reimbursement from the Trustee or the
Certificateholders for any Compensating Interest.
SECTION 3.05. COLLECTION ACCOUNT.
Within one Business Day after the Master Servicer's receipt of any
amounts collected on any Asset in its lock box maintained for the collection of
amounts payable under contracts serviced by it (including Net Liquidation
Proceeds, Insurance Proceeds and Repurchase Prices in respect thereof), the
Master Servicer shall deposit such collections, or cause such collections to be
deposited, into a clearing account established by the Master Servicer (the
"Collection Account"), which shall be an Eligible Account. If the Master
Servicer receives Insurance Proceeds from FHA in the form of FHA debentures, the
Master Servicer shall purchase such FHA debentures from the Trust within two
Business Days of receipt for their par value and deposit the proceeds of such
sale into the Collection Account. The Master Servicer may use the Collection
Account for collection of payments on Assets underlying more than one Series and
for assets that are not the subject of any transaction covered by a Pooling and
Servicing Agreement; provided, that in any such event, the Master Servicer shall
cause separate accounting and records to be maintained within the Collection
Account with respect to the Assets underlying each separate Series. Furthermore,
the parties hereto agree that all amounts deposited into the Collection Account
in respect of the Assets, other than amounts payable to the Master Servicer as
servicing compensation under the Pooling and Servicing Agreement, are to be held
in trust for the exclusive use and benefit of the related Trust.
SECTION 3.06. CERTIFICATE ACCOUNT.
(a) On or before the Closing Date, the Trustee shall establish and
maintain a collection account or accounts (the "Certificate Account"), which
must be an Eligible Account. The Certificate Account is to be held by or for the
benefit of the Trustee on behalf of the Certificateholders, and shall be either
in the Trustee's name or designated in a manner that reflects the custodial
nature of the account and that all funds in such account are held for the
benefit of the Trustee. The Trustee may elect to use a single Certificate
Account for more than one Series of Certificates provided, that in any such
event, the Master Servicer shall cause separate accounting and records to be
maintained within the Certificate Account with respect to each separate Series.
(b) The Master Servicer shall deposit into the appropriate Certificate
Account no later than two Business Days following deposit thereof to the
Collection Account after the Master Servicer's collection thereof, all payments
and collections received by it on each Outstanding Asset on or after the
effective date of the related Pooling and Servicing Agreement (including Net
Liquidation Proceeds, Insurance Proceeds and Repurchase Prices in respect
thereof), except amounts collected in respect of Monthly Payments due on or
prior to the Cut-off Date. On or prior to the Closing Date, the Master Servicer
shall deposit into the Certificate Account all installments of principal and
interest due on the Assets after the Cut-off Date and received by the Master
Servicer prior to the Closing Date, plus each Principal Prepayment of any Asset
(including any related payment of interest) received by the Master Servicer on
or after the Cut-off Date but prior to the Closing Date.
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(c) Amounts on deposit in the Certificate Account may be invested at
the direction of the Master Servicer in Eligible Investments, and earnings on
amounts deposited in such account shall be credited to the account of the Master
Servicer as servicing compensation in addition to the Servicing Fee and shall
offset P&I Advances due from the Master Servicer in respect of the Distribution
Date next succeeding the date on which such earnings were made or, in the
alternative at the Master Servicer's option, may be released to the Master
Servicer on such Distribution Date. The amount of any net losses incurred in
respect of any such investments shall be deposited in the Certificate Account by
the Master Servicer out of its own funds immediately upon realization of any
such losses.
SECTION 3.07. WITHDRAWALS FROM CERTIFICATE ACCOUNT; REMITTANCE AMOUNTS.
(a) Withdrawals from Certificate Account. The Master Servicer may
withdraw funds on deposit in the Certificate Account for the following purposes:
(i) to reimburse itself for any Advances previously made by
the Master Servicer, which Advances remain unreimbursed to the Master
Servicer, out of Related Proceeds or, if such Advances have been
determined by the Master Servicer to have become Non-Recoverable
Advances, out of any funds on deposit in the Certificate Account;
(ii) to pay any Servicing Fees and other servicing
compensation provided for herein due to the Master Servicer;
(iii) to enable the Master Servicer to remit the Remittance
Amount to the Trustee on each Remittance Date, as described in Section
3.07(b) below;
(iv) to reimburse the Master Servicer from any amounts on
deposit in the Certificate Account for any Advance previously made
which has become a Non-Recoverable Advance, or to reimburse the Master
Servicer for any other Advance out of Related Proceeds on deposit in
the Certificate Account;
(v) to reimburse the Depositor or the Master Servicer for
expenses incurred by or reimbursable to them pursuant to Section 6.05
hereof; and
(vi) to refund any overpayment of a Repurchase Price for an
Asset pursuant to Section 2.05(c) hereof.
(b) Remittance Dates. On or prior to the Remittance Date for any
Distribution Date, the Master Servicer shall remit the Remittance Amount for
such Distribution Date to the Trustee, from and to the extent of the funds in
the Certificate Account, plus all required P&I Advances, Compensating Interest
and Foreclosure Advances, by wire transfer or otherwise, in immediately
available funds, for deposit into the Distribution Account. If the Certificate
Account is maintained by the Trustee, on each Remittance Date, the Master
Servicer shall notify the Trustee as to the amount of the related Remittance
Amount and the amount of all required P&I Advances to be covered by investment
earnings on the Certificate Account, and the Trustee shall transfer such amount
from the Certificate Account to the Distribution Account on the related
Distribution Date. In such event, the Master Servicer shall still remit any P&I
Advances not covered by investment earnings on the Certificate Account to the
Trustee for deposit into the Distribution Account on the Remittance Date.
Notwithstanding the foregoing, if a Terminating Purchase is to be made
on such Distribution Date, and the Master Servicer shall have received the
Termination Price or shall be the Terminator, the Master Servicer shall remit
the Termination Price rather than the Remittance Amount to the Trustee for
deposit into the Distribution Account.
(c) Treatment of Early Payments. Early Payments received by the Master
Servicer shall be retained in the Certificate Account and transferred to the
Distribution Account when and as if such Early Payments had otherwise been
received by the Master Servicer as scheduled payments under the Assets. However,
Early Payments on any Assets for a Series on deposit in the Certificate Account
that are not yet due to be passed through to Certificateholders on any
Distribution Date may be remitted to the Distribution Account to offset
delinquencies on other Assets for the same Series. If Early Payments on any
Asset are used to offset delinquencies on
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other Assets, subsequent late recoveries of such delinquent amounts on such
other Assets shall be treated by the Master Servicer as a restoration of the
Early Payments used to offset such delinquent amounts and shall be deposited
into the Certificate Account in accordance with Section 3.06(a) hereof. To the
extent that subsequent late recoveries in respect of such delinquent amounts on
other Assets are insufficient to offset the amount of Early Payment used, then
the Master Servicer shall deposit the amount of such insufficiency into the
Certificate Amount. The Master Servicer shall maintain records with respect to
its application of Early Payments.
SECTION 3.08. REALIZATION UPON DEFAULTED ASSETS.
(a) The Master Servicer shall repossess, foreclose upon or otherwise
comparably convert the ownership of any Mortgaged Property securing an Asset
that comes into and continues in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.03 hereof. In connection with such repossession, foreclosure or other
conversion, the Master Servicer shall follow such practices and procedures as it
shall deem necessary or advisable and as shall be normal and usual for
responsible holders of residential, one- to four-family mortgage loans and as
shall be in compliance with all applicable laws, including, with respect to
Government Insured Mortgage Loans, all applicable FHA, HUD and VA guidelines and
regulations; provided, that such practices and procedures shall be, in all
circumstances, undertaken with a view toward maximizing the amount of principal
and interest recovered by the Trust on the Assets. The Master Servicer shall
purchase from the Trust Government Insured Mortgage Loans with respect to which
Assets a Foreclosure Advance has occurred in accordance with the procedures
stated above at a price equal to its then current Scheduled Principal Balance.
(b) The Master Servicer will commence and prosecute any Proceedings in
respect of any Asset in default in its own name on behalf of the Trustee and for
the benefit of the Certificateholders.
(c) In seeking to enforce the Assets, the Master Servicer may exercise
any rights of recourse against guarantors or sureties of any Obligor's
obligations (or against any other third parties against whom any rights of
recourse exist in connection with any Asset).
(d) The Master Servicer's obligations under this Section are subject to
the proviso that, in the case of damage to a Mortgaged Property, the Master
Servicer shall not be required to expend its own funds in incurring Liquidation
Expenses to restore such property unless it shall determine, in its reasonable
judgment, (1) that such restoration will increase the proceeds of liquidation of
the related Asset, after reimbursement to the Master Servicer for such expenses,
and (2) that such Liquidation Expenses, if made, will be recoverable out of
Liquidation Proceeds of such Asset. If the Master Servicer recovers any
Insurance Proceeds or Liquidation Proceeds in respect of any Asset, the Master
Servicer may deduct the amount of any Insured Expenses and unreimbursed
Liquidation Expenses incurred by it in respect of such Asset from such gross
Insurance Proceeds and Liquidation Proceeds, respectively, prior to deposit of
such proceeds into the Certificate Account.
(e) Notwithstanding any of the foregoing, the Master Servicer shall not
repossess, foreclose upon or otherwise comparably convert the ownership of any
Mortgaged Property securing an Asset in cases where the Master Servicer has
actual knowledge that the Mortgaged Property is situated on a toxic waste site
as determined by the United States Environmental Protection Agency or other
comparable federal or state agency and where, in the good faith judgment of the
Master Servicer, the liabilities that would be imposed upon the Trust with
respect to such toxic waste site would exceed the Net Liquidation Proceeds that
could be realized upon liquidation of the related Asset. The Master Servicer
shall have no affirmative duty or obligation to determine whether any Mortgaged
Property is situated on a toxic waste site.
SECTION 3.09. TITLE, CONSERVATION, AND DISPOSITION OF REO PROPERTY.
(a) The Master Servicer shall maintain, protect, and insure any REO
Property acquired pursuant to Section 3.08 hereof, on behalf of the Trust, in
accordance with standard industry practice solely for the purpose of its prompt
disposition and sale and with a view toward maximizing the amount of principal
and interest recovered on
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the Assets. The Master Servicer will have the authority to execute documents in
connection with the disposition of REO Property. During any period in which the
Trust holds a REO Property, the Master Servicer shall not (1) lease the REO
Property, (2) authorize or permit any construction on the REO Property, other
than the completion of a building or improvement thereon, and then only if more
than 10% of the construction of such building or other improvement was completed
before default on the related Asset became imminent, all within the meaning of
section 856(e)(4)(B) of the Code, or (3) allow the REO Property to be used in
any trade or business conducted by the Trust. If one or more REMIC elections are
made with respect to the assets of the Trust, the Master Servicer shall use its
best efforts to dispose of such REO Property for its fair market value before
the end of the third calendar year following the end of the calendar year in
which the related REO Property was acquired, after its acquisition by the Trust
pursuant to the Master Servicer's ordinary commercial practices. If the Master
Servicer is unable to sell such REO Property in the course of its ordinary
commercial practices within such 3 year period, the Master Servicer shall (a)
purchase such REO Property at a price equal to such REO Property's fair market
value or (b) auction such REO Property to the highest bidder in an auction
reasonably designed to produce a fair price (an "Auction") that takes place
within one month after the end of such 3 year period. If the Master Servicer and
the Trustee either (1) receive an Opinion of Counsel indicating that, under
then-current law, the REMIC may hold REO Property associated with a REMIC Asset
for a period longer than two years without threatening the REMIC status of any
related REMIC or causing the imposition of a tax upon any such REMIC or (2) the
Master Servicer applies for and is granted an extension of the 3 year period
noted in this Section 3.09(a) pursuant to Code sections 860G(a)(8) and 856(e)(3)
(the applicable period provided pursuant to such Opinion of Counsel or such Code
section being referred to herein as an "Extended Holding Period"), upon the
direction of the Depositor or the Trustee, the Master Servicer shall continue to
attempt to sell such REO Property pursuant to its ordinary commercial practices
until the date two months prior to the expiration of the Extended Holding
Period. If no REMIC election has been made or is to be made with respect to the
assets of the Trust, the 3 year period noted in this Section 3.09(a) for
disposing of any REO Property as described in the preceding two sentences shall
be an eleven-month period. The Master Servicer shall either sell any REO
Property remaining after such date in an Auction or purchase such REO Property
(at the price set forth in this paragraph) before the end of the Extended
Holding Period. In the event of any such sale of a REO Property, the Trustee
shall, at the written request of the Master Servicer and upon being supplied
with appropriate forms therefor, within five Business Days after its receipt of
the proceeds of such sale or auction, instruct the Master Servicer to release to
the purchaser the related Master Servicer Mortgage Loan File, and in any event
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
auction purchaser title to the REO Property, and shall deliver to such purchaser
any Asset Documents relating to such Asset that are in the Trustee's possession,
whereupon the Trustee shall have no further responsibility with regard to any
related Master Servicer Mortgage Loan File. Neither the Trustee nor the Master
Servicer, acting on behalf of the Trust, shall provide financing from such Trust
to any purchaser of a REO Property.
(b) In the event that title to any REO Property is acquired, the deed
or certificate of sale shall be issued to the Trustee for the benefit of the
Certificateholders. The Master Servicer shall, in accordance with Section
3.09(a), use its reasonable efforts to sell any REO Property as expeditiously as
possible, but in all events within the time period, and subject to the
conditions set forth in Section 3.09(a) hereof. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as it customarily does in connection with its own
repossessed mortgaged properties (as applicable), incident to its conservation
and protection of the interests of the Certificateholders.
(c) The Master Servicer shall deposit all net funds collected and
received in connection with the operation of any REO Property in the applicable
Certificate Account no later than the second Business Day following receipt of
such funds.
(d) The Master Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement of any related unreimbursed
Advances related to the Asset for such REO Property as well as any unpaid
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property.
(e) The final disposition of any REO Property shall be carried out by
the Master Servicer at the REO Property's fair market value under the
circumstances existing at the time of disposition and upon such terms and
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conditions as the Master Servicer shall deem necessary or advisable, and as are
in accordance with accepted servicing practices and in accordance with Section
3.09(a) above.
(f) The Liquidation Proceeds from the final disposition of any REO
Property shall be deposited into the Certificate Account promptly following
receipt of such Liquidation Proceeds and, subject to such withdrawals as may be
permitted by Section 3.07(a) above, shall be transferred to the Distribution
Account pursuant to Section 3.07(b) above.
(g) The Master Servicer shall prepare and file reports of foreclosure
and abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not rent, lease, or
otherwise earn income or take any action on behalf of the Trust with respect to
any REO Property that might (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) result in the receipt by any related REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" within the meaning of section
860G(c)(2) of the Code, both of which types of income are subject to tax under
the REMIC Provisions, unless the Trustee has received an Opinion of Counsel at
the Trust's expense (the costs of which shall be recoverable out of the
applicable Certificate Account), to the effect that, under the REMIC Provisions
and any relevant proposed legislation, any income generated for any related
REMIC by the REO Property would not result in the imposition of a tax upon such
REMIC.
Without limiting the generality of the foregoing, the Master Servicer
shall not:
(i) enter into, renew or extend any New Lease with respect
to any REO Property, if the New Lease by its terms will give rise to
any income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any
New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement
thereon, and then only if more than ten percent of the construction of
such building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person (other than
an Independent Contractor) to Directly Operate, any REO Property on any
date more than 90 days after its acquisition date;
unless, in any such case, the Master Servicer has requested and received the
Opinion of Counsel described in the preceding sentence, in which case the Master
Servicer may take such actions as are specified in such Opinion of Counsel.
(i) The Master Servicer shall not acquire any personal property
relating to any Asset pursuant to this Section 3.09 unless either:
(i) such personal property is incident to real property
(within the meaning of section 856(e)(1) of the Code) so acquired by
the Master Servicer; or
(ii) the Master Servicer shall have requested and received an
Opinion of Counsel, at the expense of the Trust (recoverable out of the
Certificate Account), to the effect that the holding of such personal
property by the related REMIC will not cause the imposition of a tax
under the REMIC Provisions on any REMIC related to the Trust or cause
any such REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
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SECTION 3.10. FULL PREPAYMENTS AND LIQUIDATIONS; TRUSTEE TO COOPERATE; RELEASE
OF MORTGAGE FILES.
(a) Mortgage Loans. Upon the liquidation of any Mortgage Loan, the
Master Servicer shall remit the proceeds thereof to the related Certificate
Account in accordance with Sections 3.05 and 3.06 above and shall deliver to the
Trustee a Request for Release requesting that the Trustee execute such
instrument of release or satisfaction as is necessary to release the related
Mortgaged Property from the lien of the related Mortgage. The Trustee shall,
within five Business Days of its receipt of such a Request for Release, release,
or cause the Custodian to release, the related Trustee Mortgage Loan File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to a Certificate
Account or Distribution Account.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including but not limited to, collection under any Title
Insurance Policy, Primary Mortgage Insurance Policy, flood insurance policy or
Standard Hazard Insurance Policy or to effect a partial release of any Mortgaged
Property from the lien of the related Mortgage, the Master Servicer shall
deliver to the Trustee a Request for Release. The Trustee shall, within three
Business Days after its receipt of such Request for Release, release, or cause
the Custodian to release, the related Trustee Mortgage Loan File to the Master
Servicer. Any such Request for Release shall obligate the Master Servicer to
return each and every document previously requested from the Trustee Mortgage
Loan File to the Trustee by the sixty-first day following the release thereof,
unless (a) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the related Certificate
Account or Distribution Account or the Trustee Mortgage Loan File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of the Master Servicer certifying as to the name and
address of the Person to which such Trustee Mortgage Loan File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of an
Officer's certificate of the Master Servicer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation which are required to be deposited into the applicable
Certificate Account or the Distribution Account have been so deposited, or that
such Mortgage Loan has become an REO Property, the Request for Release shall be
released by the Trustee to the Master Servicer.
(b) Trustee's Execution of Documents in connection with
Foreclosures/REO. The Master Servicer will have the authority to execute
documents in connection with the disposition of REO Property so long as the
execution of such documents will not invalidate or otherwise adversely affect
the lien of the related mortgage, except for the termination of such a lien upon
completion of the foreclosure proceeding or trustee's sale.
SECTION 3.11. DUE-ON-SALE CLAUSES AND ASSUMPTION AGREEMENTS.
Upon learning of any conveyance or prospective conveyance of a
Mortgaged Property securing any Mortgage Loan, the Master Servicer may exercise
its rights, subject to state law, under any "due-on-sale" clause of the Mortgage
Note or Mortgage relating to such Mortgaged Property to demand immediate payment
in full of all amounts due under such Mortgage Loan. With respect to Mortgage
Loans, the Master Servicer will exercise such rights to the extent, under the
circumstances, and in the manner in which the Master Servicer enforces such
clauses with respect to other Mortgage Loans held in its portfolio, but will not
exercise such rights if prohibited by law from doing so.
If the Master Servicer determines not to enforce a "due-on-sale" clause
with respect to an Asset, the Master Servicer will enter into an assumption
and/or modification agreement with the person to whom the Mortgaged Property has
been conveyed in a form that is customary or appropriate in the Master
Servicer's reasonable business judgment pursuant to which such person becomes
liable under the Asset and pursuant to which, to the extent permitted by
applicable law and deemed appropriate by the Master Servicer in its reasonable
judgment, the original Obligor remains liable on such Asset; provided, that (a)
the Master Servicer reasonably determines that permitting such assumption by
such person will not increase materially the risk of nonpayment of amounts due
under the related Asset, (b) such action is not prohibited by law and will not
affect adversely or jeopardize any coverage under any Insurance Policy required
to be maintained with respect to such Asset pursuant to the Pooling and
Servicing Agreement, (c) neither the Unpaid Principal Balance nor the Asset Rate
of the related Asset may be reduced, (d) if
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one or more REMIC elections have been made with respect to the assets of the
Trust, no other material term of the related Asset (including, without
limitation, the amortization schedule or any other term affecting the amount or
timing of payments on such Asset) may be modified without an Opinion of Counsel
to the effect that such modification will not be treated, under the REMIC
Provisions, as an acquisition of the modified Asset by the REMIC in exchange for
the unmodified Asset on the date the modification occurs and (e) if such Asset
is a Government Insured Mortgage Loan, then such assumption and/or modification
shall be done in accordance with FHA or VA guidelines, as applicable. The Master
Servicer shall follow its customary underwriting procedures prior to entering
into any such assumption agreement, including, without limitation, a
satisfactory credit review of any Person assuming such Asset.
SECTION 3.12. ANNUAL ACCOUNTANTS' CERTIFICATE; ANNUAL STATEMENT AS TO
COMPLIANCE.
(a) The Master Servicer shall deliver to the Trustee, on or before
March 31 of each year, with respect to each Pooling and Servicing Agreement that
the Master Servicer entered into on or before the preceding December 31, an
Officer's Certificate signed by the President or any Vice President of the
Master Servicer, dated as of December 31 of the preceding year, stating that (1)
a review of the activities of the Master Servicer during the preceding 12-month
period (or since the Cut-off Date in the case of the first such Officer's
Certificate relating to any Trust) and of its performance under the Pooling and
Servicing Agreement has been made under such Officer's supervision and (2) to
the best of such Officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under the Pooling and Servicing 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. A copy of such certificate may be obtained by any
other Holder who makes a request in writing to the Trustee addressed to the
Corporate Trust Office.
(b) In addition, on or before March 31 of each year, the Master
Servicer, at its expense, shall cause a firm of Independent public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish the following statements to the Trustee and each applicable Rating
Agency: (1) a statement to the effect that such firm has audited the financial
statements of the Master Servicer (or the consolidated group that includes the
Master Servicer) for the Master Servicer's (or the consolidated group's) most
recently ended fiscal year and issued its report thereon and (2) a statement
relating to the servicing of mortgage loans serviced by the Master Servicer and
its Affiliates for others in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers, or any successor program
promulgated by the accounting profession ("USAP") and such other statements as
are contemplated under USAP, including, if called for under USAP, a statement as
to whether the Master Servicer and its Affiliates' management's written
assertion to such firm (which shall be attached to the statement of such firm)
that its servicing during the applicable fiscal year complied with USAP's
minimum servicing standards in all material respects is fairly stated in all
material respects. The audit tests referred to in clause (2) of the preceding
sentence shall be applied to mortgage loans serviced under the Pooling and
Servicing Agreement and/or, in the sole discretion of such firm, mortgage loans
serviced under pooling and servicing agreements, trust agreements or indentures
substantially similar to the Pooling and Servicing Agreement (hereinafter
referred to as "Pooling Agreements"). For purposes of such statement, such firm
may assume conclusively that all Pooling Agreements under which the Master
Servicer is the servicer of mortgage loans for a trustee relating to
certificates evidencing an interest in mortgage loans are substantially similar
to one another except for any such Pooling Agreement which by its terms
specifically states otherwise.
SECTION 3.13. SERVICING FEES.
As compensation for the services provided for a Series (including
servicing of the related Assets and administration of the related Trust) and
ordinary expenses incurred by the Master Servicer under the Pooling and
Servicing Agreement, on each Distribution Date the Master Servicer shall be
entitled to receive the Servicing Fee on each Asset from amounts collected on
such Asset. Except as otherwise expressly provided in the Pooling and Servicing
Agreement, the Master Servicer shall perform all of the obligations to be
performed by it under the Pooling and Servicing Agreement at its expense and
without cost or charge to the Trustee. The Servicing Fee relating to any Asset
shall be payable solely from the interest portion of each Monthly Payment or
other payment of or in respect of interest collected by the Master
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Servicer in respect of such Asset, whether from the proceeds of any judgment,
writ of attachment or levy against the related Obligor or its assets, or from
funds received by the Master Servicer in connection with any Principal
Prepayment in full, from Insurance Proceeds or Liquidation Proceeds or in
connection with any purchase or repurchase of an Asset; provided, however, that
the Servicing Fee with respect to an Asset in any month shall be payable to the
Master Servicer out of amounts paid by the related Obligor toward the Monthly
Payment due on such Asset during such month only if the related Obligor has
remitted the entire amount of such Monthly Payment. The Master Servicer also
shall be entitled to additional servicing compensation as specified in Sections
3.06(c) and 3.14 hereof. Unless otherwise provided in the Pooling and Servicing
Agreement for a Series, the Master Servicer may retain its Servicing Fee and any
other servicing compensation provided for in such Pooling and Servicing
Agreement from gross interest collections on the related Assets prior to
depositing such collections into the related Certificate Account.
SECTION 3.14. LATE CHARGES; PREPAYMENT FEES OR OTHER CHARGES.
To the extent permitted by law, the Pooling and Servicing Agreement and
the terms of any Asset, the Master Servicer may collect and retain as additional
compensation any late charges, electronic payment fees, loss mitigation
incentive payments, extension fees or similar fees provided for in the Asset.
To the extent reasonable and permitted by the terms of any Asset and by
law, the Master Servicer may collect from the Obligors, and retain as additional
compensation, prepayment fees, assumption fees or any fees imposed in connection
with the replacement by such Obligor of the related Standard Hazard Insurance
Policy.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Master Servicer shall not charge or impose upon any Obligor, nor
seek to charge or impose upon any Obligor, or assert a right to receive from any
Obligor, any fee, charge, premium or penalty that, if charged or collected,
would violate or contravene any law, including usury laws, or the terms of the
related Asset.
SECTION 3.15. MAINTENANCE OF STANDARD HAZARD INSURANCE, PRIMARY MORTGAGE
INSURANCE, AND ERRORS AND OMISSIONS COVERAGE.
(a) Standard Hazard Insurance. Except as otherwise provided in this
Section 3.15(a), the Master Servicer shall cause to be maintained with respect
to each Mortgage Loan and each REO Property one or more Standard Hazard
Insurance Policies that provide, at a minimum, the same coverage as that
provided by a standard form fire and extended coverage insurance policy that is
customary for residential real property and which shall include flood insurance
coverage issued by a Qualified Insurer, providing coverage in an amount at least
equal to the lesser of (1) the maximum insurable value of the related Mortgaged
Property or (2) the principal balance due from the Obligor under such Mortgage
Loan; provided, however, that in any event the amount of coverage provided by
each Standard Hazard Insurance Policy must be sufficient to avoid the
application of any co-insurance clause contained therein; provided, further,
that notwithstanding the above, Standard Hazard Insurance Policies for FHA
Assets will be in an amount acceptable under FHA guidelines. As part of its
collection responsibilities, the Master Servicer shall proceed to collect the
premiums due on the Standard Hazard Insurance Policies from the Obligors in
accordance with the degree of skill and care that is customarily used for such
purpose in the residential mortgage loan servicing industry. Each Standard
Hazard Insurance Policy caused to be maintained by the Master Servicer shall
contain a standard loss payee clause in favor of the Master Servicer and its
successors and assigns. Any amounts received under any such policies shall be
deposited initially into the related Collection Account or Certificate Account
and then deposited into the related Distribution Account pursuant to Sections
3.06 and 3.07 hereof, within the respective time frames specified in such
Sections.
In lieu of causing individual Standard Hazard Insurance Policies to be
maintained with respect to each Mortgaged Property pursuant to subsection (a) of
this Section 3.15, the Master Servicer may maintain one or more blanket
insurance policies, each issued by a Qualified Insurer, covering losses on the
Obligors' interests in the Assets relating to such Mortgaged Properties
resulting from the absence or insufficiency of such individual Standard Hazard
Insurance Policies. The Master Servicer shall pay the premium for any such
policy on the basis described therein and shall pay any deductible amount with
respect to claims under such policy relating to the Assets covered thereby. All
amounts collected by the Master Servicer under any such blanket policy and any
payments by the Master Servicer of deductible amounts thereunder, in each case
relating to an Asset covered thereby, shall be deposited
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initially into the Certificate Account pursuant to Sections 3.05 and 3.06 hereof
(within the respective time frames specified in such Sections), after payment to
(or retention by) the Master Servicer of all Insured Expenses and Liquidation
Expenses incurred by it with respect to the Mortgaged Property to which such
recovery relates, as well as the amount of any Advances made by the Master
Servicer with respect to the related Asset that have not been reimbursed to the
Master Servicer.
(b) Primary Mortgage Insurance. The Master Servicer must maintain a
Primary Mortgage Insurance Policy in full force and effect on each Mortgage
Loan, if any, which is identified in the related Sales Agreement as being
covered by a Primary Mortgage Insurance Policy. Any such Primary Mortgage
Insurance Policy must insure the portion of the Unpaid Principal Balance of the
related Mortgage Loan that exceeds 75% of the value of the related Mortgaged
Property (as set forth in the appraisal obtained in connection with origination
of the Mortgage Loan) (the Mortgaged Property's "Initial Value") unless such
Primary Mortgage Insurance coverage has been waived in writing by the Depositor
at the time it purchases the Mortgage Loan or such Primary Mortgage Insurance is
canceled under the circumstances described below. If a covered Mortgage Loan
provides for negative amortization or the potential for negative amortization,
the Primary Mortgage Insurance Policy must also insure any increase in the
Unpaid Principal Balance of the Mortgage Loan from the original principal
balance of the related Mortgage Note. In the event that the rating assigned by
any Rating Agency for any of the related Certificates to the claims-paying
ability of any related Mortgage Insurer is reduced subsequent to the issuance of
the related Certificates, the Master Servicer will use its best efforts to
replace each Primary Mortgage Insurance Policy issued by the downgraded Mortgage
Insurer with a new Primary Mortgage Insurance Policy issued by an insurer whose
claims-paying ability is acceptable to the Depositor. The premium for any
replacement policy shall not exceed the premium for any replaced policy.
The Master Servicer may cancel the Primary Mortgage Insurance Policy
maintained with respect to any Mortgage Loan at the related Mortgagor's request
if the following conditions are met:
(i) The current Mortgage Loan-to-Value Ratio of the mortgage
Loan must be 80% or less. The current Mortgage Loan-to-Value Ratio must
be calculated by dividing the Unpaid Principal Balance of the Mortgage
Loan by the Initial Value of the related Mortgaged Property;
(ii) The Mortgage Loan may not have been 30 days or more
delinquent at any time within the preceding twelve months; and
(iii) There nay not have been any other default under the
terms of the Mortgage Loan at any time during the preceding twelve
months.
The Master Servicer must take all steps necessary to ensure the payment
by each Mortgage Insurer of the maximum benefits available under the terms of
the related Primary Mortgage Insurance Policy. The Master Servicer must work
diligently with the Mortgage Insurer to determine whether such insurer will
settle a claim under a Primary Mortgage Insurance Policy by taking title to the
related Mortgaged Property or in some other manner. Upon receipt of any proceeds
of a Primary Mortgage Insurance Policy, the Master Servicer must deposit such
proceeds into the applicable Certificate Account in accordance with Sections
3.05 and 3.06 above.
(c) Errors and Omissions Coverage; Fidelity Bond. The Master Servicer
shall keep in force throughout the term of the Pooling and Servicing Agreement a
policy or policies of insurance issued by a Qualified Insurer covering errors
and omissions in the performance of its obligations as Master Servicer
hereunder, including failure to maintain insurance as required by the Pooling
and Servicing Agreement, and a fidelity bond covering the Master Servicer's
performance under the Pooling and Servicing Agreement. Such policy or policies
and bond shall be in such form and amount as is generally customary among
Persons that service a portfolio of mortgage loans having an aggregate principal
amount of $100 million or more and which Persons are generally regarded as
servicers acceptable to institutional investors.
(d) FHA Insurance and VA Guaranty. The Master Servicer must maintain
the FHA Insurance and VA Guaranty in full force and effect on each FHA Asset and
VA Asset, as applicable, which is identified in the related
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Sales Agreement. The Master Servicer must take all steps necessary to ensure
payment by FHA and VA of the maximum benefits available under the terms of the
related FHA Insurance or VA Guaranty, as applicable. The Master Servicer must
work diligently with the FHA and VA to settle all claims. Upon receipt of any
proceeds of FHA Insurance or VA Guaranty, the Master Servicer must deposit such
proceeds into the applicable Certificate Account in accordance with Sections
3.05 and 3.06 above.
ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
SECTION 4.01. REMITTANCE REPORTS.
On or before the tenth Business Day of each month the Master Servicer
shall deliver to the Trustee Mortgage Loan information, which shall be in a form
mutually agreed upon by the Trustee and the Master Servicer and which shall
include, but shall not be limited to, the items listed in (i), (iii), (iv) and
(v) of this Section 4.01, to facilitate the Trustee's preparation of Remittance
Reports. On or before the third Business Day prior to each Distribution Date,
the Trustee shall prepare a statement containing the information specified below
as to such Distribution Date (a "Remittance Report"). The information contained
in any Remittance Report with respect to any Government Insured Mortgage Loan
that became a Liquidated Loan will be reported immediately following the
Collection Period in which the Master Servicer has determined that all
Liquidation Proceeds that it reasonably expects to recover on account of such
Government Insured Mortgage Loans have been recovered. The Trustee shall forward
each Remittance Report to the Certificateholders on the related Distribution
Date, by mail to the addresses of such Certificateholders as listed in the
Certificate Register on the preceding Record Date. A Remittance Report for a
Distribution Date for a Series shall identify the following items:
(i) the aggregate amount of each of the following, stated
separately, with respect to the related Assets: (A) the amount of all
scheduled principal payments on the Assets due during the related
Collection Period, (B) the principal components and interest components
of all Monthly Payments made by the Obligors on the Assets during the
related Collection Period, (C) Principal Prepayments received by the
Master Servicer during the related Prepayment Period, (D) Liquidation
Proceeds (including related Insurance Proceeds) and Net Liquidation
Proceeds (including related Net Insurance Proceeds) received during the
related Prepayment Period and number of Liquidated Assets (stated
separately with respect to FHA Assets and VA Assets), (E) the amount of
any Repurchase Price paid by the Depositor, the Seller or the Master
Servicer with respect to any of the Assets purchased by the Depositor,
the Seller or the Master Servicer pursuant to Section 2.05 hereof
during the related Prepayment Period and the number of Assets affected,
(F) the aggregate number of REO Properties in the Trust as of the end
of the related Prepayment Period and the aggregate of the unpaid
principal balances of the related Mortgage Loans, (G) the aggregate
number and the aggregate Unpaid Principal Balance of Outstanding
Mortgage Loans (stated separately with respect to FHA Assets and VA
Assets) that are (i) delinquent one month (i.e., 30 to 59 days) as of
the end of the related Prepayment Period, (ii) delinquent two months
(i.e., 60 to 89 days) as of the end of the related Prepayment Period,
(iii) delinquent three months (i.e., 90 days or longer) as of the end
of the related Prepayment Period and (iv) as to which foreclosure or
other comparable proceedings have been commenced as of the end of the
related Prepayment Period, (H) the amount of Realized Losses incurred
on the Assets and the number of Assets affected (stated separately with
respect to FHA Assets and VA Assets) during the related Prepayment
Period and on a cumulative basis since the Cut-off Date (the latter
expressed as a dollar amount and as a percentage of the aggregate
Cut-off Date Principal Balance) (separately identifying any Obligor
Bankruptcy Losses, Special Hazard Losses and Fraud Losses, if they are
separately allocated to the related Certificates), (I) the aggregate
Scheduled Principal Balance of the Mortgage Loans and the number of
Outstanding Mortgage Loans at the end of the related Collection Period,
(J) Net Insurance Proceeds (stated separately with respect to FHA
Assets and VA Assets) received by the Master Servicer during the
related Prepayment Period, (K) the aggregate Scheduled Principal
Balance and number of Assets in respect of which a Default has occurred
during the related Collection Period, (L) the aggregate amount of
claims filed with FHA and VA and number of Assets affected, if any,
stated separately, during the related Collection Period, and (M) the
aggregate Scheduled Principal Balance and number of VA Assets that VA,
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at its option and without regard to the related VA Guaranty, makes full
payment to the Mortgagee of the unsatisfied indebtedness on such VA
Asset during the related Collection Period, commonly referred to as a
"No-bid";
(ii) the amount of the Available Distribution Amount for such
Distribution Date;
(iii) the amount of funds in the Certificate Account, if any,
to be allocated to pay Servicing Fees, to reimburse the Master Servicer
for Advances made, to reimburse the Depositor or the Master Servicer
for expenses pursuant to Section 6.05 hereof, and to refund any
overpayment of a Repurchase Price for an Asset pursuant to Section
2.05(c) hereof;
(iv) the amount of the Servicing Fee for the related
Collection Period;
(v) the aggregate deposits into the Certificate Account
relating to such Distribution Date and the aggregate withdrawals from
the Certificate Account for each category of withdrawal specified in
Section 3.07(a) hereof relating to such Distribution Date;
(vi) in the case of a Trust (or designated assets thereof)
for which a REMIC election has been or will be made, any other
information required to be provided to Certificateholders by the REMIC
Provisions; and
(vii) any items relating to a specific Series of Certificates
specified in the related Pooling and Servicing Agreement.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and furnish a statement, from information provided by
the Master Servicer, containing the information concerning the amount of
distributions of interest and principal on the Regular Certificates and the
amount of distributions on the Residual Certificates, as well as any other
information as may be required by the Code or Regulations and that customarily
would be provided by a Trustee to Certificateholders in order to enable such
Certificateholders to prepare their federal income tax returns, to each Person
who at any time during the calendar year was a Certificateholder that
constituted a retail investor or other Certificateholder that requests such
statement, aggregated for such calendar year or portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.
SECTION 4.02. DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish and maintain with itself a Distribution
Account for the benefit of the Certificateholders and shall deposit therein
funds received with respect to the Remittance Amount, P&I Advances, Compensating
Interest and Foreclosure Advances for each Distribution Date immediately upon
receipt thereof from the Master Servicer in accordance with Section 3.04 and
Section 3.07(b) hereof. The Distribution Account shall be an Eligible Account
and shall be either held in the Trustee's name or designated in a manner that
reflects the custodial nature of the account and that all funds in such account
are held in trust for the benefit of the Trustee.
The Master Servicer shall keep and maintain separate accounting, on an
Asset-by-Asset basis, for the purpose of justifying any payment to and from the
Distribution Account.
(b) Amounts on deposit in the Distribution Account may be invested at
the direction of the Trustee in Eligible Investments, and earnings on amounts
deposited in such account shall be credited to the account of the Trustee as
additional compensation in addition to the Trustee. The amount of any net losses
incurred in respect of any such investments shall be deposited in the
Distribution Account by the Trustee out of its own funds immediately upon
realization of any such losses.
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SECTION 4.03. ALLOCATION OF FUNDS.
On or prior to the Distribution Date for a Series, the Trustee shall
withdraw the Available Distribution Amount on deposit in the related
Distribution Account in accordance with the related Remittance Report and shall
distribute such amounts in the following order of priority:
(i) to pay the Trustee the monthly Trustee Fee, to the
extent not previously retained or withdrawn from the Distribution
Account; and
(ii) to distribute to the Certificateholders (or, if more
than one REMIC election has been made with respect to the Trust, to
distribute to the holders of the Regular Interests and the Residual
Interests in the Pooling REMIC), the balance of the amount of the
Available Distribution Amount in accordance with the related Pooling
and Servicing Agreement.
SECTION 4.04. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Trustee shall comply with all federal withholding requirements
respecting payments of interest or principal to the extent of accrued original
issue discount on Certificates to each Holder of such Certificates who (a) is
not a "United States person," within the meaning of Code section 7701(a)(30),
(b) fails to furnish its TIN to the Trustee, (c) furnishes the Trustee an
incorrect TIN, (d) fails to report properly interest and dividends, or (e) under
certain circumstances, fails to provide the Trustee or the Certificateholder's
securities broker with a certified statement, signed under penalties of perjury,
that the TIN provided by such Certificateholder to the Trustee or such broker is
correct and that the Certificateholder is not subject to backup withholding. The
consent of such a Certificateholder shall not be required for such withholding.
In the event the Trustee does withhold the amount of any otherwise required
distribution from interest payments on the Assets (including principal payments
to the extent of accrued original issue discount) or P&I Advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate with any payment to such Certificateholders the amount withheld.
In addition, if any United States federal income tax is due at the time a
Non-U.S. Person transfers a Residual Certificate, the Trustee or other
Withholding Agent may (1) withhold an amount equal to the taxes due upon
disposition of such Residual Certificate from future distributions made with
respect to such Residual Certificate to the transferee thereof (after giving
effect to the withholding of taxes imposed on such transferee), and (2) pay the
withheld amount to the Internal Revenue Service unless satisfactory written
evidence of payment by the transferor of the taxes due has been provided to the
Trustee or such Withholding Agent. Moreover, the Trustee or other Withholding
Agent may (1) hold distributions on a Residual Certificate, without interest,
pending determination of amounts to be withheld, (2) withhold other amounts, if
any, required to be withheld pursuant to United States federal income tax law
from distributions that otherwise would be made to such transferee on each
Residual Certificate that it holds, and (3) pay to the Internal Revenue Service
all such amounts withheld.
SECTION 4.05. REPORTS OF SECURITY PRINCIPAL BALANCES TO THE CLEARING AGENCY.
If and for so long as any Certificate is held by the Clearing Agency,
on the second Business Day before each Distribution Date, the Trustee shall give
oral notice to the Clearing Agency (and shall promptly thereafter confirm in
writing) the following: (a) the amount of interest and principal to be
distributed on the Certificates of such Class on the upcoming Distribution Date,
as reported in the related Remittance Report, (b) the Record Date for such
distribution, (c) the Distribution Date for such distribution and (d) the
aggregate Certificate Principal Balance of each Class of Certificates reported
pursuant to clause (10) of Section 4.01 hereof in such month.
SECTION 4.06. PREPARATION OF REGULATORY REPORTS.
(a) Subject to the provisions of subsections (b) and (c) of this
Section 4.06, the Trustee shall prepare or cause to be prepared, on behalf of
the Trust, and at the expense of the Master Servicer such supplementary and
periodic information, documents and reports (such information, documents or
reports are referred to hereinafter as "Periodic Reports") as may be required
pursuant to Section 12(g) or Section 15(d) of the Securities Exchange Act of
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1934, as amended (the "Exchange Act"), by the rules and regulations of the
Commission thereunder or as a condition to approval of any application for
relief ("Application for Relief") hereinafter referred to and, in connection
therewith, shall prepare such applications and requests for exemption and other
relief from such provisions as it may deem appropriate. The Trustee shall be
deemed to certify as to each Periodic Report that it conforms in all material
respects to applicable reporting requirements imposed by the Exchange Act or is
otherwise in form and content appropriate for filing with the Commission. The
Trustee is hereby authorized to and shall execute all such Periodic Reports or
Applications for Relief on the Trust's behalf and file the same with the
Commission and other required filing offices, if any, on behalf of the Trust.
(b) Within 30 days after the beginning of the first fiscal year of any
Trust during which its obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Trustee shall prepare, or cause to
be prepared, a notice on Commission Form 15 ("Form 15") and is hereby authorized
to and shall execute such Form 15 on the related Trust's behalf and at the
expense of the Master Servicer; provided, however, that the Trustee shall be
under no obligation to prepare such notice if the number of Certificateholders
exceeds 300. The Trustee shall file any notice on Form 15 with the Commission in
accordance with the provisions of Rule 15d-6 under the Exchange Act.
(c) Notwithstanding any other provision of the Pooling and Servicing
Agreement, the Trustee has not assumed, and shall not by its performance
hereunder be deemed to have assumed, any of the duties or obligations of the
Depositor or any other Person with respect to (1) the registration of the
Certificates pursuant to the Securities Act, (2) the issuance or sale of the
Certificates, or (3) other than as expressly set forth in this Section 4.06,
compliance with the provisions of the Securities Act, the Exchange Act, or any
applicable federal or state securities or other laws including, without
limitation, any requirement to update the registration statement or prospectus
relating to the Certificates in order to render the same not materially
misleading to investors.
(d) In connection with the Trustee's preparation of any Form 15 or of
any Periodic Report, the Master Servicer and the Depositor shall provide it with
information which it may reasonably request.
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
SECTION 5.01. POOLING REMIC INTERESTS.
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Pooling and Servicing Agreement will set forth the terms of
the Regular Interests and Residual Interest of the Pooling REMIC. Unless
otherwise specified in the Pooling and Servicing Agreement, (a) the Pooling
REMIC Regular Interests will be "regular interests" for purposes of the REMIC
Provisions but will not constitute securities or certificates of interest in the
Trust; and (b) the Trustee will be the owner of any such Regular Interests,
which may not be transferred to any person other than a successor trustee
appointed pursuant to Section 8.08 hereof unless the party desiring the transfer
obtains a Special Tax Opinion.
SECTION 5.02. THE CERTIFICATES.
The Certificates shall be designated in the Pooling and Servicing
Agreement. The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Trust Estate (or in the Issuing REMIC, if
any). On the Closing Date, unless otherwise specified in the related Pooling and
Servicing Agreement, the aggregate Certificate Principal Balance of the
Certificates will not be less than the aggregate Unpaid Principal Balance of the
underlying Assets as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received. The Certificates
will be substantially in the forms annexed to the Pooling and Servicing
Agreement. Unless otherwise provided in the Pooling and Servicing Agreement, the
Certificates of each Class will be issuable in registered form. Each Certificate
will share ratably in all rights of the related Class.
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Upon original issue, the Certificates shall be executed and delivered
by the Trustee and the Trustee shall cause the Certificates to be authenticated
by the Certificate Registrar to or upon the order of the Depositor. The
Certificates shall be executed and attested by manual or facsimile signature on
behalf of the Trustee by an authorized Officer under its seal imprinted thereon.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper Officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall
represent entitlement to any benefit under the Pooling and Servicing Agreement
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided in the Pooling
and Servicing Agreement (in the forms of Certificates attached thereto as
Exhibits) executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their execution, except
that those Certificates delivered on the Closing Date may be dated the Accrual
Date.
SECTION 5.03. BOOK-ENTRY CERTIFICATES.
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name of CEDE & Co., as nominee of the
Clearing Agency. The Depositor, the Master Servicer and the Trustee may for all
intents and purposes (including the making of payments on the Book-Entry
Certificates) deal with the Clearing Agency as the authorized representative of
the Beneficial Owners of the Book-Entry Certificates for as long as those
Certificates are registered in the name of the Clearing Agency. The rights of
Beneficial Owners of the Book-Entry Certificates shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency and Clearing Agency Participants. The Beneficial Owners of the
Book-Entry Certificates shall not be entitled to certificates for the Book-Entry
Certificates as to which they are the Beneficial Owners, except as provided in
subsection (c) below. Requests and directions from, and votes of, the Clearing
Agency, as Holder, shall not be deemed to be inconsistent if they are made with
respect to different Beneficial Owners. Without the consent of the Depositor,
the Master Servicer and the Trustee, a Book-Entry Certificate may not be
transferred by the Clearing Agency except to another Clearing Agency that agrees
to hold the Book-Entry Certificate for the account of the respective Clearing
Agency Participants and Beneficial Owners.
(b) Neither the Depositor, the Master Servicer nor the Trustee will
have any liability for any aspect of the records relating to or payment made on
account of Beneficial Owners of the Book-Entry Certificates held by the Clearing
Agency, for monitoring or restricting any transfer of beneficial ownership in a
Book-Entry Certificate or for maintaining, supervising or reviewing any records
relating to such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (1) the
Depositor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Book-Entry Certificates and the Depositor is unable to locate a
qualified successor within 30 days or (2) the Depositor, at its option, elects
to terminate the book-entry system operating through the Clearing Agency. Upon
the occurrence of either such event, the Trustee shall notify the Clearing
Agency, which in turn will notify all Beneficial Owners of Book-Entry
Certificates through Clearing Agency Participants, of the availability of
certificated Certificates. Upon surrender by the Clearing Agency of the
certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Book-Entry
Certificates as certificated Certificates to the Beneficial Owners identified in
writing by the Clearing Agency. Such certificated Certificates shall not
constitute Book-Entry Certificates. All reasonable costs associated with the
preparation and delivery of certificated Certificates shall be borne by the
Depositor.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
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If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the Certificate Registrar
by an Officer thereof as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates.
Subject to Section 5.05 below, upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office of the Trustee or at
any other office or agency of the Trustee maintained for such purpose, the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class of a like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be
exchanged for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
The Depositor will (or will cause the Certificate Registrar to) provide
notice to the Trustee of each transfer of a Certificate, and will provide the
Trustee and Master Servicer with an updated copy of the Certificate Register on
January 1 and July 1 of each year (or at such other time as the Master Servicer
may request).
SECTION 5.05. RESTRICTIONS ON TRANSFER.
(a) Securities Law Compliance. No transfer of any Private Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify the Depositor, the Trustee and the Master Servicer against any
liability that may result if any transfer of such Certificates by such Holder is
not exempt from registration under the Securities Act and all applicable state
securities laws or is not made in accordance with such federal and state laws.
Neither the Depositor, the Trustee nor the Master Servicer is obligated to
register or qualify any Private Certificate under the Securities Act or any
other securities law or to take any action not otherwise required under these
Standard Terms or the related Pooling and Servicing Agreement to permit the
transfer of such Certificates without such registration or qualification. The
Trustee shall not register any transfer of a Private Certificate (other than a
Residual Certificate) unless and until the prospective transferee provides the
Trustee with a Transferee Agreement or, if the Certificate to be transferred is
a Rule 144A Certificate, a Rule 144A Agreement certifying to facts which, if
true, would mean that the proposed transferee is a Qualified Institutional
Buyer, and unless and until the transfer otherwise complies with the provisions
of this Section 5.05. If a proposed transfer does not involve a Rule 144A
Certificate or the transferee's Rule 144A Agreement does not certify to facts
which, if true, would mean that the transferee is a Qualified Institutional
Buyer, (i) the Master Servicer and the Trustee shall require that the transferor
and transferee certify as to the factual basis for the registration exemption(s)
relied upon and (ii) if such transfer is made within three years after the
acquisition thereof by a non-Affiliate of the Depositor from the Depositor or an
Affiliate of the Depositor, the Master Servicer or the Trustee may also may
require an Opinion of Counsel that such transfer may be made without
registration or qualification under the Securities Act and applicable state
securities laws, which Opinion of Counsel shall not be
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obtained at the expense of the Depositor, the Trustee or the Master Servicer.
Notwithstanding the foregoing, no Rule 144A Agreement, Transferee Agreement or
Opinion of Counsel shall be required in connection with the initial transfer of
the Private Certificates and no Opinion of Counsel shall be required in
connection with the transfer of the Private Certificates by a broker or dealer,
if such broker or dealer was the initial transferee.
The Depositor shall provide to any transferee Holder of a Rule 144A
Certificate and any prospective transferee designated by such Holder information
regarding the related Certificates and the related Assets 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, upon the request for such information by such
Holder.
(b) ERISA Compliance.
(i) Book-Entry Certificates. No transfer of all or any portion
of any Class of Book-Entry Certificates that are ERISA Restricted
Certificates shall be made to a transferee that is a Plan Investor, and
each Beneficial Owner of such a Certificate shall be deemed to have
represented, by virtue of its acquisition of such a Certificate, that
it is not a Plan Investor.
(ii) Certificated Certificates. No transfer of all or any
portion of any Class of Certificates that (A) are not Book-Entry
Certificates and (B) are ERISA Restricted Certificates shall be made
unless and until the prospective transferee provides the Trustee and
the Master Servicer with a properly completed and executed Benefit Plan
Affidavit, together with a Benefit Plan Opinion if required in order to
comply with such Affidavit. Notwithstanding anything else to the
contrary herein, any purported transfer of such a Certificate to or on
behalf of a Plan Investor without delivery of a Benefit Plan Opinion
shall be null and void.
(c) Residual Certificates. The Trustee shall not register any transfer
of a Residual Certificate (including any beneficial interest therein) unless it
shall have received the written consent of the Master Servicer. No Residual
Certificate may be transferred to a Disqualified Organization. The Master
Servicer will not consent to any proposed transfer or sale of a Residual
Certificate (1) to any investor that it knows is a Disqualified Organization or
(2) if the transfer involves less than an entire interest in a Residual
Certificate, unless (A) the interest transferred is an undivided interest or (B)
the transferor or the transferee provides the Master Servicer with an Opinion of
Counsel obtained at its own expense to the effect that the transfer will not
jeopardize the REMIC status of any REMIC consisting of assets of the Trust. The
Master Servicer's consent to any transfer is further conditioned upon the Master
Servicer's receipt from the proposed transferee of (x) a Residual Transferee
Agreement, (y) a Benefit Plan Affidavit, and (z) either (A) if the transferee is
a Non-U.S. Person, an affidavit of the proposed transferee in substantially the
form attached as Exhibit 7-A to Exhibit 7 hereto and a certificate of the
transferor stating whether the Residual Certificate has "tax avoidance
potential" as defined in Treasury Regulations Section 1.860G-3(a)(2), or (B) if
the transferee is a U.S. Person, an affidavit in substantially the form attached
as Exhibit 7-B to Exhibit 7 hereto. In addition, if a proposed transfer involves
a Private Certificate, the transfer shall be subject to the additional
restrictions set forth in Section 5.05(a) above. Notwithstanding the foregoing,
no Opinion of Counsel shall be required in connection with the initial transfer
of the Residual Certificates or their transfer by a broker or dealer, if such
broker or dealer was the initial transferee. Notwithstanding the fulfillment of
the prerequisites described above, the Master Servicer may withhold its consent
to, or the Trustee may refuse to recognize, a transfer of a Residual
Certificate, but only to the extent necessary to avoid a risk of
disqualification as a REMIC of a REMIC consisting of Trust assets or the
imposition of a tax upon a REMIC. Any attempted transfer in violation of the
foregoing restrictions shall be null and void and shall not be recognized by the
Trustee.
If a tax or a reporting cost is borne by a REMIC consisting of Trust
assets as a result of the transfer of a Residual Certificate or any beneficial
interest therein in violation of the restrictions set forth in this Section, the
transferor shall pay such tax or cost and, if such tax or cost is not so paid,
the Trustee, upon notification from the Master Servicer, shall pay such tax or
cost or may pay such tax or reporting cost with amounts that otherwise would
have been paid to the transferee of the Residual Certificate (or beneficial
interest therein). In that event, neither the transferee nor the transferor
shall have any right to seek repayment of such amounts from the Depositor, the
Trustee,
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the REMIC, the Master Servicer, or the other Holders of any of the Certificates,
and none of such parties shall have any liability for payment of any such tax or
reporting cost. In the event that a Residual Certificate is transferred to a
Disqualified Organization, the Master Servicer shall make, or cause to be made,
available the information necessary for the computation of the excise tax
imposed under section 860E(e) of the Code.
SECTION 5.06. ACCRUAL OF INTEREST ON THE CERTIFICATES.
Certificates entitled to receive interest in accordance with the
related Pooling and Servicing Agreement shall accrue interest at the applicable
Pass-Through Rates on the basis of a 360-day year consisting of twelve 30-day
months and on the assumption that each Interest Accrual Period consists of 30
days, unless otherwise provided in the Pooling and Servicing Agreement.
SECTION 5.07. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
Class, tenor and denomination or Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee and the Certificate Registrar) connected therewith.
Every new Certificate issued pursuant to this Section shall constitute complete
and indefeasible evidence of ownership in the Trust, as if originally issued on
the Closing Date, regardless of whether any destroyed, lost or stolen
Certificate in lieu of which such new Certificate was issued shall be found at
any time.
SECTION 5.08. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any
Certificate, the Master Servicer, the Trustee and any agent of the Master
Servicer or of the Trustee may treat the Person in whose name any Certificate is
registered on the Certificate Register as the owner of such Certificate for the
purpose of receiving distributions on such Certificate and for all other
purposes whatsoever (whether or not such Certificate is overdue), and neither
the Master Servicer, the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by notice to the contrary.
SECTION 5.09. APPOINTMENT OF PAYING AGENT.
The Trustee, at its own expense, may appoint a Paying Agent approved by
the Depositor for the purpose of making distributions to Certificateholders. The
Trustee shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.
The Depositor and the Master Servicer each shall be liable in
accordance with the terms of the Pooling and Servicing Agreement only to the
extent of the obligations specifically imposed by the Pooling and Servicing
Agreement and undertaken hereunder by the Depositor or the Master Servicer,
respectively.
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SECTION 6.02. THE DEPOSITOR'S REPRESENTATIONS AND WARRANTIES.
The Depositor represents and warrants to the Trustee, as of the date of
a Pooling and Servicing Agreement and as of the related Closing Date, as
follows:
(a) The Depositor has been duly organized and is validly existing as a
limited liability company under the laws of the State of Delaware and is in good
standing under such laws, with full power and authority to own its properties
and conduct its business as now conducted by it and to enter into and perform
its obligations under the Pooling and Servicing Agreement, and has duly
qualified to do business and is in good standing under the laws of each
jurisdiction wherein it conducts any material business or in which the
performance of its duties under the Pooling and Servicing Agreement would
require such qualification.
(b) The Depositor has all requisite corporate power and authority to
own its properties and to conduct any and all business required or contemplated
by the Pooling and Servicing Agreement to be conducted by the Depositor and to
perform the covenants and obligations to be performed by it hereunder; the
execution and delivery by the Depositor of the Pooling and Servicing Agreement
are within the corporate power of the Depositor and have been duly authorized by
all necessary action on the part of the Depositor; and neither the execution and
delivery of the Pooling and Servicing Agreement by the Depositor, nor the
consummation by the Depositor of the transactions herein contemplated, nor
compliance with the provisions hereof by the Depositor, will (1) conflict with
or result in a breach of, or will constitute a default under, any of the
provisions of the articles of organization or operating agreement of the
Depositor or any law, governmental rule or regulation, or any judgment, decree
or order binding on the Depositor or its properties, or any of the provisions of
any indenture, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound or (2) result in the creation or
imposition of any lien, charge or encumbrance upon any of its property pursuant
to the terms of any such indenture, mortgage, deed of trust or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Depositor under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Depositor and, assuming due authorization,
execution and delivery thereof by all other parties thereto, constitute legal,
valid and binding agreements enforceable against the Depositor in accordance
with their terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency or other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any state, federal or other governmental
authority by the Depositor is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Depositor of the covenants and obligations to be performed by it
hereunder.
(e) As of the Closing Date, no Proceedings are pending or, to the best
of the Depositor's knowledge, threatened against the Depositor that would
prohibit its entering into the Pooling and Servicing Agreement or performing its
obligations under the Pooling and Servicing Agreement, including assisting in
the issuance of the Certificates.
(f) The Depositor has obtained or made all necessary consents,
approvals, waivers and notifications of stockholders, creditors, lessors and
other nongovernmental persons, in each case, in connection with the execution
and delivery of the Pooling and Servicing Agreement, and the consummation of all
the transactions herein contemplated.
(g) The Depositor does not believe, nor does it have any reason or
cause to believe, that it cannot perform its obligations under the Pooling and
Servicing Agreement.
Upon discovery by any of the Depositor, the Master Servicer or the
Trustee of a breach of any of the foregoing representations, warranties and
covenants that materially and adversely affects the interest of the
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Certificateholders in any underlying Asset, the party discovering such breach
shall give prompt written notice thereof (but in no event later than two
Business Days following such discovery) to the other parties hereto.
SECTION 6.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, as of the date hereof and as of the Closing Date, as follows:
(a) The Master Servicer has been duly organized and is validly existing
as a national banking association under the laws of the United States and is in
good standing under such laws, with full power and authority to own its
properties and conduct its business as now conducted by it and to enter into and
perform its obligations under the Pooling and Servicing Agreement, and is
authorized to conduct business in each jurisdiction where it conducts any
material business or in which the performance of its duties under the Pooling
and Servicing Agreement would require such qualification, except where the
failure so to qualify would not have a material adverse effect on the
performance of its obligations under the Pooling and Servicing Agreement. The
Master Servicer holds all material licenses, certificates, franchises, and
permits from all governmental authorities necessary for the conduct of its
business and will have received no notice of proceedings relating to the
revocation of any such license, certificate or permit, that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
affect materially and adversely the conduct of the business, results of
operations, net worth or condition (financial or otherwise) of the Master
Servicer.
(b) The Master Servicer has all requisite power and authority to own
its properties and to conduct any and all business required or contemplated by
the Pooling and Servicing Agreement to be conducted by the Master Servicer and
to perform the covenants and obligations to be performed by it hereunder; the
execution and delivery by the Master Servicer of the Pooling and Servicing
Agreement are within the corporate power of the Master Servicer and have been
duly authorized by all necessary corporate action on the part of the Master
Servicer; and neither the execution and delivery of the Pooling and Servicing
Agreement by the Master Servicer, nor the consummation by the Master Servicer of
the transactions herein contemplated, nor compliance with the provisions hereof
by the Master Servicer, will (1) conflict with or result in a breach of, or will
constitute a default under, any of the provisions of the articles of
incorporation or by-laws of the Master Servicer or any law, governmental rule or
regulation, or any judgment, decree or order binding on the Master Servicer or
its properties, or any of the provisions of any indenture, mortgage, deed of
trust or other instrument to which the Master Servicer is a party or by which it
is bound or (2) result in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, deed of trust or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Master Servicer under the Pooling and Servicing Agreement have been duly
authorized, executed and delivered by the Master Servicer and, assuming due
authorization, execution and delivery thereof by all other parties thereto,
constitute legal, valid and binding agreements enforceable against the Master
Servicer in accordance with their terms, subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency or other similar laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any federal, state or other governmental
authority by the Master Servicer is required in connection with the
authorization, execution or delivery of the Pooling and Servicing Agreement or
the performance by the Master Servicer of the covenants and obligations to be
performed by it hereunder.
(e) No Proceedings are pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer that would prohibit its
entering into the Pooling and Servicing Agreement or performing its obligations
under the Pooling and Servicing Agreement, including assisting in the issuance
of the Certificates.
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(f) The Master Servicer maintains an errors and omissions policy and
fidelity bond that covers the Master Servicer's performance under the Pooling
and Servicing Agreement and such policy and bond are in full force and effect.
(g) The Master Servicer has obtained or made all necessary consents,
approvals, waivers and notifications of stockholders, creditors, lessors and
other nongovernmental persons, in each case, in connection with the execution
and delivery of the Pooling and Servicing Agreement, and the consummation of all
the transactions herein contemplated.
(h) The Master Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform its obligations under the Pooling
and Servicing Agreement.
(i) The Master Servicer is and shall remain through the duration of the
Pooling and Servicing Agreement (1) a HUD approved mortgagee and (2) approved by
HUD to service FHA insured mortgage loans. If at any time the Master Servicer
fails to remain either (1) a HUD approved mortgagee and (2) approved by HUD to
service FHA insured mortgage loans, then the Master Servicer shall be required
to resign as Master Servicer and shall give immediate written notice to the
Trustee of such failure.
Upon discovery by any of the Depositor, the Master Servicer or the
Trustee of a breach of any of the foregoing representations, warranties and
covenants that materially and adversely affects the interest of the
Certificateholders in any underlying Asset, the party discovering such breach
shall give prompt written notice thereof (but in no event later than two
Business Days following such discovery) to the other parties hereto. The Master
Servicer shall use its reasonable best efforts to cure promptly (and in no event
later than 30 days after such notice, shall cure), any breach of the
representations, warranties and covenants contained in this Section 6.03.
SECTION 6.04. CORPORATE EXISTENCE.
Subject to the provisions of the following paragraph, the Depositor and
the Master Servicer each will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction in which it is
incorporated and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Pooling and
Servicing Agreement, any Certificates or any of the Assets included in the Trust
Estate, and to perform its duties under the Pooling and Servicing Agreement.
Any Person (a) into which the Depositor or the Master Servicer may be
merged or consolidated, (b) that may result from any merger, conversion or
consolidation to which the Depositor or the Master Servicer shall be a party,
(c) that may succeed to the business of the Depositor or the Master Servicer, or
(d) to which the Depositor or the Master Servicer may transfer all of its
assets, shall be the successor to the Depositor or the Master Servicer
hereunder, respectively, without the execution or filing of any document or any
further act by any of the parties to the Pooling and Servicing Agreement,
anything herein to the contrary notwithstanding; provided, that any such
successor to the Master Servicer must agree in writing to be bound by each of
the Master Servicer's obligations hereunder and that each applicable Rating
Agency must deliver to the Trustee a letter to the effect that such
successorship shall not result in a downgrading of the rating initially assigned
by the Rating Agency to any Class of Certificates as to which the Depositor has
requested a rating from such Rating Agency.
SECTION 6.05. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER SERVICER AND
OTHERS.
Neither the Depositor, the Master Servicer nor any of the directors,
officers, employees or agents of any of the Depositor or the Master Servicer
shall be under any liability to the Trust or the Certificateholders and all such
Persons shall be held harmless for any action taken or for refraining from the
taking of any action in good faith pursuant to the Pooling and Servicing
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect any such Person against any breach of warranties or
representations made herein or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the
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Master Servicer and any of the directors, officers, employees or agents of
either the Depositor or the Master Servicer may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by
any Person respecting any matters arising hereunder. Neither the Depositor nor
the Master Servicer shall be under any obligation to appear in, prosecute or
defend any legal action unless such action is related to its respective duties
under the Pooling and Servicing Agreement and such action in its opinion does
not involve it in any expense or liability, except as provided in Section
10.01(b) hereof; provided, however, that the Depositor or the Master Servicer
may each in its discretion undertake any such action that it deems necessary or
desirable with respect to the Pooling and Servicing Agreement and the rights and
duties of the parties thereto and the interests of the Certificateholders
thereunder if the Certificateholders offer to the Depositor or the Master
Servicer, as the case may be, reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or thereby.
SECTION 6.06. MASTER SERVICER RESIGNATION.
The Master Servicer shall not resign from the obligations and duties
imposed on it under the Pooling and Servicing Agreement, except (a) upon
appointment of a successor servicer and receipt by the Trustee of a letter from
each applicable Rating Agency that such a resignation and appointment will not,
in and of itself, result in a downgrading of any rated Certificates or (b) upon
determination by its Board of Directors that the performance of its duties under
the Pooling and Servicing Agreement is no longer permissible under applicable
law. Any such determination permitting the resignation of the Master Servicer
shall be evidenced by a resolution of its Board of Directors and an Opinion of
Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the responsibilities and obligations of the Master Servicer in accordance with
Section 7.02 hereof.
SECTION 6.07. ASSIGNMENT OR DELEGATION OF DUTIES BY THE MASTER SERVICER AND THE
DEPOSITOR.
(a) The Master Servicer may at any time without notice or consent
delegate certain computational, data processing, collection and foreclosure
duties hereunder to any entity. No such delegation shall relieve the Master
Servicer in any respect of its responsibility with respect to such duties.
(b) Neither the Master Servicer nor the Depositor may assign the
Pooling and Servicing Agreement or any of its rights, power, duties or
obligations hereunder (except as provided in Section 6.07(a) above), provided
that the Master Servicer and the Depositor may assign the Pooling and Servicing
Agreement in connection with a consolidation, merger, conveyance, transfer or
lease made in compliance with Section 6.04 hereof.
(c) Except as provided in Sections 6.04 and 6.06 hereof, the duties and
obligations of the Master Servicer and the Depositor under the Pooling and
Servicing Agreement shall continue until the Pooling and Servicing Agreement
shall have been terminated as provided in Section 9.01 hereof, and shall survive
the exercise by the Trustee of any right or remedy under the Pooling and
Servicing Agreement, or the enforcement by the Trustee of any provisions of the
Pooling and Servicing Agreement.
SECTION 6.08. THE DEPOSITOR AND MASTER SERVICER MAY OWN CERTIFICATES.
The Depositor, the Master Servicer and any Affiliate of the foregoing
may in its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Depositor,
the Master Servicer or an Affiliate of the Depositor or the Master Servicer.
SECTION 6.09. PROTECTION OF TRUST ESTATE.
Except as limited by Section 2.02(a) above, the Master Servicer (and
the Depositor, to the extent necessary) will execute and deliver from time to
time all amendments to the Pooling and Servicing Agreement and all financing
statements, continuation statements, instruments of further assurance and other
instruments necessary or advisable in order to, and will take such other action
as the Trustee deems necessary or advisable in order to:
(a) grant to the Trustee more effectively all or any portion of the
Trust Estate;
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(b) preserve and defend the Trust's title to the Trust Estate and the
rights therein of the Trustee and the Holders of Certificates against the claims
of all persons and parties;
(c) maintain or preserve the lien (and the priority thereof) created by
the Pooling and Servicing Agreement or to carry out more effectively the
purposes hereof (including the filing of continuation statements under the UCC
as necessary);
(d) perfect, publish notice of, or protect the validity of any grant
made or to be made pursuant to the Pooling and Servicing Agreement; or
(e) enforce any of the related Asset Documents.
The Depositor and the Master Servicer each hereby designates the Trustee its
agent and attorney-in-fact to execute any financing statement, continuation
statement or other instrument required pursuant to this Section 6.09; provided,
that the Trustee shall have no duty to determine whether the filing of any
financing statement shall be necessary or to file such statements except upon
written request of the Depositor or the Master Servicer. After execution of any
continuation statement or other instrument pursuant to this Section, the Trustee
shall deliver such instrument to the Master Servicer for filing. Promptly after
filing any such instrument or causing any such instrument to be filed, the
Master Servicer shall deliver an Officer's Certificate, signed by an Officer of
the Master Servicer, to the Trustee stating that such continuation statement or
other instrument has been filed.
The Master Servicer shall pay or cause to be paid, on behalf of the
Trust, any taxes levied on the account of the ownership by the Trust of the
related Assets.
SECTION 6.10. PERFORMANCE OF OBLIGATIONS.
The Master Servicer shall not take any action, and will use its best
efforts not to permit any action to be taken by others, that would release any
Person from any of such Person's covenants or obligations under any of the
related Asset Documents or under any instrument included in the Trust Estate, or
that would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the related
Asset Documents or any such instrument, except as expressly provided in the
Pooling and Servicing Agreement or such Asset Documents or other instrument or
unless such action will not adversely affect the interests of the Holders of the
Certificates.
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
SECTION 7.01. EVENTS OF DEFAULT.
Any of the following acts or occurrences shall constitute an Event of
Default by the Master Servicer:
(a) any failure by the Master Servicer to remit funds in the
Certificate Account to the Distribution Account or to make a required P&I
Advance that is not deemed by the Master Servicer to be a Non-Recoverable
Advance or pay Compensating Interest, in either case as required by Section
3.07(b) hereof or to provide the Trustee with the information required under
Section 4.01, and the continuance of such failure unremedied for a period of
five days after the date upon which such deposit, payment or remittance was due;
(b) if the Master Servicer breaches in any material respect any of the
representations, warranties, covenants or agreements on the part of the Master
Servicer (other than covenants referred to in clause (a) above) contained in the
Certificates or in the Pooling and Servicing Agreement, which breach continues
unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee or the Depositor, or to the Master Servicer, the
Depositor and the Trustee by the Holders of Certificates of a Series entitled to
at least 25% of the related Voting Rights;
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(c) the issuance of a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or similar
law or appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, against the
Master Servicer, and the remaining of such decree or order in force undischarged
or unstayed for a period of 60 consecutive days;
(d) the Master Servicer's consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities, or similar proceedings of, or relating to, the Master
Servicer or of, or relating to, all or substantially all of the property of the
Master Servicer; or
(e) the Master Servicer's (1) admission in writing of its inability to
pay its debts generally as they become due, (2) filing of a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, (3) making of an assignment for the benefit of its
creditors, or (4) voluntarily suspending payment of its obligations.
If an Event of Default concerning the Master Servicer shall occur
hereunder, then, and in each and every such case, so long as such Event of
Default shall not have been remedied or waived, the Trustee may, and at the
direction of the Holders of Certificates evidencing greater than 51% of the
Voting Rights, shall, by notice then given in writing to the Master Servicer,
terminate all of the rights and obligations of the Master Servicer as servicer.
On and after the receipt by the Master Servicer of any such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Certificates (except its rights as a Holder thereof) or the Assets or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section 7.01 (provided, however, that the Master Servicer shall continue to be
entitled to receive all amounts accrued and owing to it as Master Servicer under
the Pooling and Servicing Agreement on or prior to the occurrence of a Event of
Default specified in Section 7.01(a) above or, in the case of any other Event of
Default, on or prior to the date of such termination); and, without limitation,
the Trustee hereby is authorized and empowered on behalf of the Master Servicer,
as attorney-in-fact or otherwise, to execute and deliver any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Assets and
related documents or otherwise.
The holders of Certificates representing at least 66 2/3% of the Voting
Rights allocated to the respective Classes of Certificates affected by any Event
of Default will be entitled to waive such Event of Default; provided, however,
that an Event of Default involving a failure to distribute a required payment to
Certificateholders described in clause (a) of this Section 7.01 may be waived
only by all of affected Certificateholders. Upon any such waiver of an Event of
Default, such Event of Default shall cease to exist and shall be deemed to have
been remedied for every purpose under this Agreement.
The Master Servicer shall cooperate with the Trustee in effecting the
termination of the responsibilities and rights of the Master Servicer hereunder,
including, without limitation, (1) transferring to the Trustee for
administration by it of all cash amounts that shall be held at the time by the
Master Servicer for deposit, shall have been deposited by the Master Servicer
into the Collection Account, the Certificate Account or the Distribution
Account, or shall be received thereafter with respect to an Asset, and (2) the
prompt provision to the Trustee (in no event later than ten Business Days
subsequent to its receipt of such notice of termination) of all documents and
records, electronic and otherwise, reasonably requested by the Trustee or its
designee in order for the Trustee or its designee to assume and carry out the
duties and obligations that otherwise were to have been performed and carried
out by the Master Servicer under the Pooling and Servicing Agreement but for the
termination of the Master Servicer.
Upon any termination of the Master Servicer pursuant to this Section,
the Trustee or its designee shall pay over to the Master Servicer that portion
of any future proceeds of the related Assets that, if it were acting hereunder
at such future time, it would be permitted to retain or withdraw from the
Certificate Account or Distribution Account in consideration of, or in
reimbursement for, previous services performed, or advances made, by it or for
other matters for which it is entitled to reimbursement pursuant hereto or to
the terms of the Pooling and Servicing
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Agreement. Prior to appointment of any successor Master Servicer, the Trustee
must notify the Rating Agency in writing of the identity of such prospective
successor.
SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof or resigns pursuant to Section 6.06
or 6.03(i) hereof, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as servicer under the Pooling and Servicing
Agreement and in connection with the transactions provided for herein and shall
be subject to all the responsibilities, duties and liabilities placed on the
Master Servicer by the terms and provisions hereof. As compensation therefor,
the Trustee, except as provided in Section 7.01 hereof, shall be entitled to
such compensation (whether payable out of the Distribution Account or otherwise)
as the Master Servicer would have been entitled to receive hereunder if no such
notice of termination had been given, as well as all protections and
indemnification afforded the Master Servicer pursuant to Section 6.05 above.
Notwithstanding the above, the Trustee may, if it is unwilling or unable so to
act, it may or, at the written request of Certificateholders entitled to at
least 51% of the Voting Rights, it shall appoint, or petition a court of
competent jurisdiction to appoint, any established housing finance institution
having a net worth of not less than $15,000,000 and acceptable to each Rating
Agency, as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. No appointment of a successor to the Master Servicer shall
be effective until the assumption by the successor of all future
responsibilities, duties and liabilities of the Master Servicer under the
Pooling and Servicing Agreement. Pending appointment of a successor to the
Master Servicer hereunder, unless the Trustee is prohibited by law from so
acting, the Trustee or an Affiliate of the Trustee shall act as Master Servicer
hereunder as provided above. Notwithstanding any of the foregoing, the successor
Master Servicer shall not be required to purchase any Assets from the Trust
pursuant to these Standard Terms except (i) under Section 2.05(a)(2) hereof to
the extent the obligation to repurchase arose out of a breach of a
representation, warranty or covenant by the successor Master Servicer and (ii)
under Section 2.05(b) hereof to the extent the Master Servicer's obligation to
effect remedial action as described in such Section arose after the successor
Master Servicer began serving as Master Servicer. It is understood that any
predecessor Master Servicer shall remain liable for any breaches of
representations, warranties and covenants that it committed while it was the
Master Servicer, and shall remain responsible for effecting remedial actions
described in Section 2.05(b) hereof (and for repurchasing Assets pursuant to
such Section 2.05(b)) to the extent the obligation to undertake such remedial
action arose while such predecessor Master Servicer was the Master Servicer
hereunder.
In connection with the appointment of a successor Master Servicer, the
Trustee may make such arrangements for the compensation of such successor
servicer out of payments on the related Assets as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer under the terms of the Pooling and Servicing
Agreement. The Trustee and such successor servicer shall take such action,
consistent with the Pooling and Servicing Agreement, as shall be necessary to
effectuate any such succession.
Any successor to the Master Servicer shall maintain in force during the
term of its service as Master Servicer the policy or policies that the Master
Servicer is required to maintain pursuant to Section 3.15(c) hereof.
Upon any Event of Default described hereunder, the Trustee, in addition
to the rights specified in this Section, shall have the right, in its own name
and as "Trustee," to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests of the Certificateholders, and enforce the rights and remedies of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt
in connection therewith). No remedy provided for by the Pooling and Servicing
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or omission
to exercise any right or remedy shall impair any such right or remedy or shall
be deemed to be a waiver of any Event of Default. Amounts payable to the Trustee
to reimburse it for any expenses it incurs in connection with any actions taken
by it pursuant to this paragraph are intended to constitute administrative
expenses. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the
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rights of any Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Certificateholder in any such Proceeding.
If the Master Servicer shall be required to resign pursuant to the
terms of Section 6.03 (i) herein, then upon receiving such notice of
resignation, the Trustee shall promptly appoint a successor Master Servicer. The
Trustee may remove the Master Servicer if the FHA Assets or VA Assets included
in the Trust Fund are not serviced in accordance with HUD, FHA and/or VA
requirements, as applicable, or if the Master Servicer fails to service the FHA
Assets or VA Assets according to reasonable and customary requirements. Any
resignation or removal of the Master Servicer shall not become effective until
acceptance of appointment by a qualified successor master servicer. The Trustee
shall not appoint a successor master servicer unless such successor master
servicer is both approved by HUD as a mortgagee and approved by HUD to service
FHA insured mortgage loans.
For the purposes of this Section 7.02 and Section 7.03 hereof, the
Trustee shall not be deemed to have knowledge of a Default or an Event of
Default hereunder unless an Officer of the Trustee having direct responsibility
for the administration of the Pooling and Servicing Agreement has actual
knowledge thereof or unless written notice of any Event of Default is received
by the Trustee and such notice references the Certificates or the Trust.
SECTION 7.03. NOTIFICATIONS TO MASTER SERVICER AND TO CERTIFICATEHOLDERS.
(a) Upon obtaining actual knowledge of any Default, the Trustee shall
promptly notify the Master Servicer and each Certificateholder (at their
respective addresses appearing in the Certificate Register) thereof.
(b) Upon any termination of, or appointment of a successor to, the
Master Servicer pursuant to Section 7.02 hereof, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register.
(c) As soon as practicable after the Trustee's obtaining knowledge of
the occurrence of an Event of Default, the Trustee shall transmit by certified
mail to all Holders of the Certificates (at their respective addresses appearing
in the Certificate Register) notice of such Event of Default or occurrence 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.
If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by the Pooling and
Servicing Agreement, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Prior to the occurrence of an Event of Default or
after all Events of Default which may have occurred have been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by the
Pooling and Servicing Agreement, and shall use the same degree of care and skill
in their exercise, as a corporate trustee would exercise or use under the
circumstances in the administration of a corporate trust agreement.
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 the Pooling and Servicing Agreement, shall examine them to determine whether
they conform to the requirements of the Pooling and Servicing Agreement;
provided, however, that the Trustee shall be under no duty to recalculate,
verify or recompute the information provided to it hereunder by the Depositor or
the Master Servicer. If any such instrument is found not to conform to the
requirements of the Pooling and Servicing Agreement in a material manner, the
Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the related Certificateholders.
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No provision of the Pooling and Servicing Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default with respect to the
Master Servicer of which the Trustee has notice or knowledge, and after the
curing or waiver of any such Event of Default, the duties and obligations of the
Trustee shall be determined solely by the express provisions of the Pooling and
Servicing Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in the Pooling and
Servicing Agreement, no implied covenants or obligations shall be read into the
Pooling and Servicing Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee that conform to the
requirements of the Pooling and Servicing Agreement;
(b) the Trustee shall not be liable in its individual capacity for any
error of judgment made in good faith by an Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable in its individual capacity with
respect to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Holders of Certificates of a Series
entitled to at least 25% of the related Voting Rights 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 the
Pooling and Servicing Agreement;
(d) Any determination of negligence or bad faith of the Trustee shall
be made only upon a finding that there is clear and convincing evidence (and not
upon the mere preponderance of evidence) thereof in a proceeding before a court
of competent jurisdiction in which the Trustee has had an opportunity to defend;
and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Master Servicer or the Depositor (excepting the Trustee's own
actions as Master Servicer), and in connection with any action or claim or
recovery sought against the Trustee based upon facts involving the acts or
omissions of the Master Servicer or the Depositor, or involving any allegation
or claim of liability or recovery against the Trustee by the Master Servicer or
by the Depositor, the Trustee shall not be held to a greater standard of care
than the Master Servicer or the Depositor would be held in such situation.
Except as specifically required herein, the Trustee shall not be
required to expend, advance or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it, unless such risk or liability
relates to its ordinary services hereunder.
SECTION 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 8.01 hereof:
(i) In the absence of bad faith, the Trustee may rely, and
shall be protected in acting or refraining from acting in reliance
upon, any resolution, 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. Further, the Trustee may accept a copy of the vote of the
board of directors of any party certified by its clerk or assistant
clerk or secretary or assistant secretary as conclusive evidence of the
authority of any person to act in accordance with such vote, and such
vote may be considered as in full force and effect until receipt by the
Trustee of written notice to the contrary.
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(ii) The Trustee may rely, in the absence of bad faith on
its part, upon a certificate of an Officer of the appropriate Person
whenever in the administration of the Pooling and Servicing Agreement
the Trustee shall deem it desirable that a matter be proved or
established (unless other evidence be prescribed herein specifically)
prior to taking, suffering or omitting any action hereunder.
(iii) The Trustee may consult with counsel and the written
advice of such counsel or 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 written advice or Opinion of Counsel.
(iv) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by the Pooling and Servicing
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Pooling and
Servicing 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.
(v) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Holders of Certificates of a
Series entitled to at least 25% of the related Voting Rights; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation, in the opinion of the Trustee, is not
assured to the Trustee by the security afforded to it by the terms of
the Pooling and Servicing Agreement, the Trustee may require indemnity
against such expense or liability as a condition to taking any such
action. The expense of every such examination shall be paid by the
Master Servicer or, if paid by the Trustee, shall be repaid by the
Master Servicer upon demand.
(vi) The Trustee may execute any of the trusts or powers
under the Pooling and Servicing Agreement or perform any duties
hereunder either directly or by or through agents, attorneys or
co-trustees and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it under the Pooling and Servicing Agreement.
(vii) Whenever the Trustee is authorized herein to require
acts or documents in addition to those required to be provided it in
respect of any matter, it shall be under no obligation to make any
determination as to whether such additional acts or documents should be
required unless obligated to do so under Section 8.01 hereof.
(viii) The Trustee shall not be deemed to have notice or
knowledge of any matter, including, without limitation, any Event of
Default, unless one of its Officers having direct responsibility for
the administration of the Pooling and Servicing Agreement has actual
knowledge or record thereof or unless written notice thereof is
received by the Trustee at the Corporate Trust Office and such notice
references the Certificates generally, the Depositor, the Trust or the
Pooling and Servicing Agreement.
(ix) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by the Pooling and Servicing Agreement.
(x) The permissive right or authority of the Trustee to
take any action enumerated in the Pooling and Servicing Agreement shall
not be construed as a duty or obligation.
Certificateholders shall have rights to institute suits, actions or
proceedings in equity or at law upon or under or with respect to the Pooling and
Servicing Agreement only under the circumstances described in the third
paragraph of Section 11.03 hereof.
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(b) All rights of action under the Pooling and Servicing Agreement or
under any of the Certificates enforceable by the Trustee may be enforced by it
without the possession of any of the Certificates, or the production thereof at
the trial or other Proceeding relating thereto, and any such suit, action or
Proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of the
Pooling and Servicing Agreement.
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR ASSETS.
The recitals contained in the Pooling and Servicing Agreement and in
the Certificates (other than the signature and countersignature of the Trustee
on the Certificates) shall be taken as the statements of the Depositor or the
Master Servicer and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations or warranties as to the validity or
sufficiency of the Pooling and Servicing Agreement or of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any underlying Asset or related document. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Master Servicer in respect of the
underlying Assets or deposited in or withdrawn from the Collection Account, the
Certificate Account or the Distribution Account other than any funds held by or
on behalf of the Trustee in accordance with the Pooling and Servicing Agreement.
SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES.
The Trustee, in its individual capacity or any other capacity, may
become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES.
The Trustee shall receive for services performed for a Series
(including Remittance Reports and regulatory reporting) and ordinary expenses
incurred by the Trustee under the Pooling and Servicing Agreement, on each
Distribution Date the Trustee shall be entitled to receive the Trustee Fee on
each Asset from amounts collected on such Asset. The Trustee Fee relating to any
Asset shall be payable in the manner and in the priority set forth in Section
3.07(d). The Trustee also shall be entitled to pay itself additional servicing
compensation as specified in Section 4.02 hereof. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Master
Servicer (unless the Trustee is the Master Servicer, in which case the Seller
shall provide such indemnification) against any loss, liability or expense
(including costs and expenses of litigation, and of investigation, counsel fees,
damages, judgments and amounts paid in settlement), incurred in connection with
the Trustee's (i) enforcing its rights and remedies and protecting the
interests, and enforcing the rights and remedies, of the Certificateholders
during the continuance of an Event of Default, (ii) defending or prosecuting any
legal action in respect of this Agreement or the related Certificates, (iii)
being the mortgagee of record with respect to the Mortgage Loans in a Trust Fund
and the owner of record with respect to any Mortgaged Property acquired in
respect thereof for the benefit of Certificateholders, or (iv) acting or
refraining from acting in good faith at the direction of the holders of the
Certificates entitled to not less than 25% of the Voting Rights for the related
Series; provided, however, that such indemnification will not extend to any
loss, liability or expense that constitutes a specific liability of the Trustee
pursuant to this Agreement, or to any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence on the part of the
Trustee in the performance of its obligations and duties hereunder, or by reason
of its reckless disregard of such obligations or duties, or as may arise from a
breach of any representation, warranty or covenant of the Trustee made herein.
To the extent that the Trustee has not been paid for any of the foregoing items,
the Trustee shall be entitled to be paid for such items from amounts on deposit
in the Distribution Account, if set forth in the related Pooling and Servicing
Agreement. The obligations under this Section 8.05 shall survive the resignation
or removal of the Trustee.
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee shall at all times be a corporation or national banking
association that is not an Affiliate of the Depositor or the Master Servicer,
organized and doing business under the laws of any state or the United States of
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America, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 (or qualifying as a
Qualified Bank) and subject to supervision or examination by federal or state
regulatory authorities. 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 the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 hereof.
SECTION 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Pooling and Servicing Agreement by giving written notice
of such resignation to the Depositor, the Master Servicer and to all related
Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor Trustee. A copy of such instrument shall be delivered to the
Certificateholders and to the Master Servicer by the Depositor. If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the resigning Trustee's giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation thereof,
then the Depositor may remove the Trustee and appoint a successor Trustee by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor Trustee. A copy of such instrument shall
be delivered to the Certificateholders and to the Master Servicer by the
Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may remove the Trustee at any time and appoint a successor Trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and to the Master Servicer by the
Depositor. If the Holders remove the Trustee otherwise than for reasonable cause
based upon the Trustee's failure to continue to meet the eligibility
requirements set forth in Section 8.06 above or the Trustee's failure to perform
its duties as described herein, then the Holders so removing the Trustee shall
bear any and all costs and expenses arising from such removal and substitution.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08 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, the Master Servicer and
to its predecessor Trustee an instrument accepting such appointment under the
Pooling and Servicing Agreement and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor Trustee all related Asset Documents and related
documents and statements held by it under the Pooling and Servicing Agreement
and the Depositor, the Master Servicer and the predecessor Trustee shall execute
and deliver such instruments and do such other things as
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reasonably may be required for more fully and certainly vesting and confirming
in the successor Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Depositor shall mail notice of the succession of such Trustee
under the Pooling and Servicing Agreement to all Holders of the Certificates at
their addresses as shown in the Certificate Register. 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 or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee, shall be the successor of the Trustee under the Pooling and
Servicing Agreement provided such corporation or association shall be eligible
under the provisions of Section 8.06 hereof, 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. Prior to any such merger, conversion or
consolidation, the Trustee shall notify each applicable Rating Agency in writing
of the pendency of such merger, conversion or consolidation.
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
For the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Estate or property securing the same may be
located at any time, the Depositor, the Master Servicer and the Trustee, acting
jointly, shall have the power and shall execute and deliver all instruments
necessary 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
Trustees, of all or any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity, such title to the Trust Estate or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Depositor, the Master Servicer and the
Trustee may consider necessary or desirable. If the Depositor or the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Trustee alone shall have the power to
make such appointment. No co-Trustee or separate Trustee(s) hereunder shall be
required to meet the terms of eligibility as a successor Trustee under Section
8.06 hereof and no notice to Holders of Certificates of the appointment of
co-Trustee(s) or separate Trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-Trustee or separate Trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate Trustee or co-Trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee under the
Pooling and Servicing Agreement or as successor to the Master Servicer pursuant
to Section 7.02 hereof), 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 Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate Trustee or co-Trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate Trustees and co-Trustees,
as effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to the Pooling and Servicing
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 the Pooling and Servicing Agreement, specifically
including every
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provision of the Pooling and Servicing Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Pooling and Servicing Agreement on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
SECTION 8.11. APPOINTMENT OF CUSTODIANS.
The Trustee may, with the consent of the Master Servicer, such consent
not to be unreasonably withheld, appoint one or more Custodians to hold all or a
portion of the Trustee Mortgage Loan Files as agent for the Trustee, by entering
into a custodial agreement. The appointment of any Custodian may at any time be
terminated and a substitute Custodian appointed therefor by the Trustee. The
Trustee shall terminate the appointment of any Custodian and appoint a
substitute custodian upon the request of the Master Servicer to the Trustee.
Subject to this Article VIII, the Trustee agrees to comply with the terms of
each custodial agreement and to enforce the terms and provisions thereof against
the Custodian for the benefit of the Certificateholders. Each Custodian shall be
a depository institution or trust company subject to supervision by federal or
state authority, shall have combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds any
Trustee Mortgage Loan File. Any such Custodian may not be an affiliate of the
Depositor or any Seller with respect to the applicable Trust.
SECTION 8.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES.
All rights of action and claims under the Pooling and Servicing
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto and any such proceeding instituted by the
Trustee shall be brought in its own name or in its capacity as Trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION UPON REPURCHASE OR LIQUIDATION OF ALL ASSETS.
(a) The respective obligations and responsibilities of the Depositor,
the Master Servicer and the Trustee under the Pooling and Servicing Agreement
(other than the obligations of the Trustee to make distributions to
Certificateholders, to reimburse the Master Servicer for outstanding Advances,
to pay the Master Servicer accrued and previously unpaid Servicing Fees or to
provide tax information as provided in Section 4.01(a) hereof and other than the
obligations of the Master Servicer under Article X hereof) shall terminate upon
distribution to the Certificateholders of all amounts held by or on behalf of
the Trustee and required hereunder to be so distributed on the Distribution Date
coinciding with or following the earlier to occur of (1) a Terminating Purchase
for an amount equal to the Termination Price and (2) the final payment or other
liquidation (or any advance with respect thereto) of the last Asset remaining in
the Trust or the disposition of the last REO Property remaining in the Trust;
provided, however, that in no event shall the Trust created hereby continue
beyond the expiration of 21 years after the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James's, living on the date hereof.
(b) Unless otherwise provided in the Pooling and Servicing Agreement,
the Master Servicer or the Holders of the majority of the Percentage Interest in
the Residual Certificates of a REMIC (or, in the case of a
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double REMIC Series, the Pooling REMIC) (the "Residual Majority") may, at their
respective options, make, or cause a Person to make, a Terminating Purchase on
any Distribution Date on or after the earlier to occur of (1) the Master
Servicer's determination, based upon an Opinion of Counsel, that the REMIC
status of any REMIC related to the Trust has been lost or that a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, or (2) the Distribution Date on which the aggregate Scheduled Principal
Balance of the Assets is less than 5% of the sum of the Scheduled Principal
Balance of the Assets as of the Cutoff Date.
(c) The Master Servicer or the Residual Majority shall notify the
Trustee and the Certificate Registrar in writing of its election to make or to
cause a Terminating Purchase no later than the Distribution Date preceding the
Distribution Date on which the Certificates will be retired as a result of such
Terminating Purchase. The Master Servicer shall advise the Trustee and the
Certificate Registrar of the final payment or other liquidation of the last
Asset remaining in the Trust or the disposition of the last REO Property
remaining in the Trust at least two Business Days prior to the Remittance Date
in the month in which the Trust will terminate as a result thereof.
Notice of any termination of the Trust shall be given promptly by the
Trustee by letter sent to the Certificateholders by certified mail (1) in the
event such notice is given in connection with a Terminating Purchase, not
earlier than the fifth day of the month preceding the month of such termination
and not later than the first day of the month of such termination or (2)
otherwise not later than the Remittance Date preceding the final Distribution
Date, in each case specifying (A) the Distribution Date upon which the Trust
will terminate and that final payment of the Certificates will be made on such
Distribution Date and (B) the amount of any such final distribution. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with a Terminating Purchase, the Terminator shall deliver to the Trustee for
deposit into the Distribution Account on the Business Day immediately preceding
the Distribution Date on which the Terminating Purchase is to take place an
amount in next day funds equal to the Termination Price. Notwithstanding the
foregoing, if the Terminator is the Master Servicer, the Terminator, upon notice
to the Trustee, shall be entitled to remit the Termination Price net of amounts
owed to the Terminator in respect of unreimbursed outstanding Advances made by
such Terminator or amounts required to be reimbursed or paid to such Terminator
hereunder.
(d) On the final Distribution Date, the Trustee shall distribute to the
Certificateholders as of the related Record Date the amount otherwise
distributable on the Certificates on such Distribution Date (if such final
Distribution Date is not the result of a Terminating Purchase).
Upon any termination of the Trust as the result of a Terminating
Purchase, the Trustee and the Master Servicer shall distribute the Termination
Price as though it were the amount on deposit in the Certificate Account in
accordance with Section 3.07(d) hereof and in accordance with the related
Pooling and Servicing Agreement.
Following such final distribution, the Master Servicer and the Trustee
shall promptly release to the Terminator the related Asset Files or portions
thereof in their respective possessions for the remaining Assets, and REO
Properties, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate transfer of such Asset Files to such
Terminator, whereupon the Trust shall terminate.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates 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 and receive
the final distribution with respect thereto, net of the cost of such second
notice. If within one year after the second notice all the 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 amounts otherwise payable on such
Certificates. Any funds payable to Certificateholders that are not distributed
on the final Distribution Date shall be deposited in a Termination Account, as
the case may be, each of which shall be an Eligible Account, to be held for the
benefit of Certificateholders not presenting and surrendering their Certificates
in the aforesaid manner, and shall be disposed of in accordance with this
Section.
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SECTION 9.02. ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event of a Terminating Purchase as provided in Section 9.01
hereof, the Trust shall be terminated in accordance with the following
additional requirements, unless the Master Servicer, the Depositor, and the
Trustee receive (1) a Special Tax Opinion and (2) a Special Tax Consent from
each of the Holders of the Residual Certificates (unless the Special Tax Opinion
specifically provides that no REMIC-level tax will result from such Terminating
Purchase).
(i) Within 90 days prior to the time of the making of the
final payment on the Certificates, the Depositor on behalf of each
related REMIC shall adopt a plan of complete liquidation meeting the
requirements set forth in the REMIC Provisions for a qualified
liquidation (which plan may be adopted by the Trustee's attachment of a
statement specifying the first day of the 90-day liquidation period to
the REMIC's final federal income tax return) and the REMIC will sell
all of its assets (other than cash).
(ii) At the time of the making of the final payment on the
Regular Certificates or the deposit to the Termination Account, the
Trustee shall distribute or credit, or cause to be distributed or
credited, pro rata, to the Holders of the Residual Certificates, all
remaining cash on hand relating to the REMIC after such final payment
(other than cash retained to meet claims against the Trust) and the
REMIC shall terminate at that time.
(iii) In no event may the final payment on the Regular
Certificates or the final distribution or credit to the Holders of the
Residual Certificates be made after the 90th day after the date on
which the plan of complete liquidation relating thereto is adopted. A
payment into the Termination Account with respect to any Certificate
pursuant to Section 9.01 hereof shall be deemed a final payment on, or
final distribution with respect to, such Certificate for the purposes
of this Section 9.02(a)(3).
(b) By their acceptance of Residual Certificates, the Holders thereof
agree (1) to authorize such action as may be necessary to adopt a plan of
complete liquidation of any related REMIC and (2) to take such action as may be
necessary to adopt a plan of complete liquidation of any related REMIC upon the
written request of the Master Servicer, which authorization shall be binding
upon all successor Holders of such Residual Certificates.
ARTICLE X
REMIC TAX PROVISIONS
SECTION 10.01. REMIC ADMINISTRATION.
Unless otherwise specified in the related Pooling and Servicing
Agreement, an election will be made to treat the Assets and the Distribution
Account underlying a Series as one or more REMICs under the Code. Each Holder of
a Residual Certificate in each REMIC shall, in its Residual Transferee
Agreement, designate the Master Servicer or an Affiliate of the Master Servicer,
as its agent, to act as the Tax Matters Person for such REMIC. The Master
Servicer agrees that it or one of its Affiliates will serve as such Tax Matters
Person for each REMIC, and also will perform various tax administration
functions for each REMIC, as its agent, as set forth in this Section 10.01.
(a) The Trustee shall elect (on behalf of each REMIC to be created) to
have the Trust (or designated assets thereof) treated as a REMIC on Form 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued as
well as on any corresponding state tax or information return necessary to have
such assets treated as a REMIC under relevant state law.
(b) The Master Servicer shall pay any and all tax related expenses (not
including taxes) specifically in respect of the Trust and each related REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to each such REMIC
that involve the Internal Revenue Service or state tax authorities or related to
the adoption of a plan of complete liquidation.
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(c) The Trustee shall prepare any necessary forms for election as well
as all of the Trust's and each related REMIC's federal and state tax and
information returns. The Trustee shall sign and file such returns on behalf of
each such REMIC. The expenses of preparing and filing such returns shall be
borne by the Master Servicer.
(d) The Trustee shall perform all reporting and other tax compliance
duties that are the responsibility of the Trust and the REMIC under the REMIC
Provisions or state or local tax law. Among its other duties, if required by the
REMIC Provisions, the Trustee, acting as agent of the REMIC, shall provide (1)
to the Treasury or to other governmental authorities such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (2) to the Trustee such
information as is necessary for the Trustee to discharge its obligations under
the REMIC Provisions to report tax information to the Certificateholders.
(e) The Depositor, the Master Servicer, the Trustee (to the extent the
Trustee has been instructed by the Depositor or the Master Servicer), and the
Holders of Residual Certificates shall take any action or cause each related
REMIC to take any action necessary to create or maintain the status of each such
REMIC as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status.
(f) The Depositor, the Master Servicer, the Trustee (to the extent the
Trustee has been instructed by the Depositor or the Master Servicer), and the
Holders of the Residual Certificates shall not take any action or fail to take
any action, or cause each related REMIC to take any action or fail to take any
action that, if taken or not taken, could endanger the status of each such REMIC
as a REMIC unless the Trustee and the Master Servicer have received an Opinion
of Counsel (at the expense of the party seeking to take or to omit to take such
action) to the effect that the contemplated action or failure to act will not
endanger such status.
(g) Any taxes that are imposed upon the Trust or any related REMIC by
federal or state (including local) governmental authorities (other than taxes
paid by a party pursuant to Section 10.02 hereof or as provided in the following
sentence) shall be allocated to the Certificates (including, for this purpose,
the regular interests in any Pooling REMIC) out of the Available Distribution
Amount before any distributions are made on the related Certificates on the
related Distribution Date. Any state or local taxes imposed upon the Trust, any
related REMIC or any related Certificateholder that would not have been imposed
on the Trust, such REMIC or such Certificateholder in the absence of any legal
or business connection between the Trustee and the state or locality imposing
such taxes (including any federal, state or local taxes imposed on such Trust,
such REMIC or such Certificateholder as a result of such Trust, such REMIC or
such Certificateholder being deemed to have received income as a result of the
Trustee's payment of state or local taxes) shall be paid by the Trustee, and,
notwithstanding anything to the contrary in these Standard Terms, such taxes
shall be deemed to be part of the Trustee's cost of doing business and shall not
be reimbursable to the Trustee.
(h) If the Master Servicer (or an Affiliate thereof) is unable for any
reason to fulfill its duties as Tax Matters Person, then the holder of the
largest Percentage Interest of the Residual Certificates, without compensation,
shall become the successor Tax Matters Person for each related REMIC; provided,
however, that in no event shall the Trustee be required to act as Tax Matters
Person (regardless of whether the Trustee is acting as successor Master
Servicer).
SECTION 10.02. PROHIBITED ACTIVITIES.
Except as otherwise provided elsewhere in the Pooling and Servicing
Agreement, neither the Depositor, the Master Servicer, the Holders of Residual
Certificates, nor the Trustee shall engage in, nor shall the Trustee permit, any
of the following transactions or activities unless it has received (1) a Special
Tax Opinion and (2) a Special Tax Consent from each of the Holders of the
Residual Certificates (unless the Special Tax Opinion specially provides that no
REMIC-level tax will result from the transaction or activity in question):
(a) the sale or other disposition of, or substitution for, any of the
underlying Assets except pursuant to (1) a foreclosure or default with respect
to such an Asset, (2) a purchase or repurchase pursuant to Section 2.05
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hereof, (3) the bankruptcy or insolvency of any related REMIC, or (4) the
termination of any related REMIC pursuant to Article IX hereof;
(b) the acquisition of any Assets for the Trust after the related
Closing Date except (1) during the three-month period beginning on the Closing
Date pursuant to a fixed-price contract in effect on the Closing Date that has
been reviewed and approved by tax counsel acceptable to the Master Servicer or
(2) a substitution in accordance with Section 2.05 hereof;
(c) the sale or other disposition of any investment in the Distribution
Account at a gain;
(d) the acceptance of any contribution to the Trust except the
following cash contributions: (1) a cash contribution received during the
three-month period beginning on the Closing Date; (2) a cash contribution to
facilitate a Terminating Purchase that is made within the 90-day period
beginning on the date on which a plan of complete liquidation is adopted
pursuant to Section 9.02(a)(1) hereof; (3) a contribution to a Reserve Fund
owned by a related REMIC that is made pro rata by the Holders of the Residual
Certificates; or (4) any other contribution approved by the Master Servicer
after consultation with tax counsel;
(e) except in the case of an Asset that is in default, or as to which,
in the reasonable judgment of the Master Servicer, default is reasonably
foreseeable, neither the Trustee nor the Master Servicer shall permit any
modification of any material term of an Asset (including, but not limited to,
the interest rate, the principal balance, the amortization schedule (except as
provided in the Pooling and Servicing Agreement), the remaining term to
maturity, or any other term affecting the amount or timing of payments on the
Asset) unless the Trustee and Master Servicer have received an Opinion of
Counsel (at the expense of the party seeking to modify the Asset) to the effect
that such modification would not be treated as giving rise to a new debt
instrument for REMIC purposes;
(f) any other transaction or activity that is not contemplated by the
Pooling and Servicing Agreement;
(g) the sale or other disposition of any asset held in a Reserve Fund
for a period of less than three months (a "Short-Term Reserve Fund Investment")
if such sale or disposition would cause 30% or more of a related REMIC's income
from all of its Reserve Funds for the taxable year to consist of gain from the
sale or disposition of Short-Term Reserve Fund Investments; or
(h) the withdrawal of any amounts from any Reserve Fund except (A) for
the distribution pro rata to the Holders of the Residual Certificates or (B) to
provide for the payment of Trust expenses or amounts payable on the Certificates
in the event of defaults or late payments on the related Assets or lower than
expected returns on funds held in the Distribution Account, as provided under
section 860G(a)(7) of the Code.
Any party causing the Trust to engage in any of the activities prohibited in
this Section shall be liable for the payment of any tax imposed on the Trust
pursuant to Code section 860F(a)(1) or 860G(d) as a result of the Trust engaging
in such activities.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. AMENDMENTS.
The Pooling and Servicing Agreement may be amended or supplemented from
time to time by the Depositor, the Master Servicer and the Trustee without the
consent of any of the Certificateholders (a) to cure any ambiguity herein, (b)
to correct or supplement any provisions herein that may be inconsistent with any
other provisions herein, (c) to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of any related REMIC as a REMIC under the Code at all times that
any Certificates are outstanding or (d) to make any other provisions with
respect to matters or questions arising under the Pooling and
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Servicing Agreement or matters arising with respect to the Trust that are not
covered by the Pooling and Servicing Agreement; provided, that such action shall
not affect adversely the interests of any Certificateholder, as evidenced by an
opinion of counsel independent from the Depositor, the Master Servicer and the
Trustee or a letter from each Rating Agency from whom the Depositor requested a
rating of any of the related Certificates stating that such action will not
result in a downgrading of the rating of any of the related Certificates rated
by such Rating Agency at the request of the Depositor. Promptly after the
execution of any such amendment, the Trustee shall furnish a copy of such
amendment to each Holder of Certificates.
The Pooling and Servicing Agreement also may be amended from time to
time by the Depositor, the Master Servicer and the Trustee with the consent of
the Holders entitled to at least a majority of the Voting Rights of each Class
of Certificates that would be affected by such amendment for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or of modifying in any manner
the rights of the Holders of the Certificates; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans that are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (b) affect
adversely in any material respect the interests of the Holders of any Class of
Certificates in a manner other than described in clause (a) of this paragraph,
without the consent of the Holders of Certificates of such Class evidencing at
least 66_% of the Voting Rights with respect to such Class, or (c) reduce the
aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of such Holders of all
Certificates then outstanding.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
SECTION 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, the Pooling and Servicing
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties included in the Trust Estate and subject
to the related Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Master
Servicer and at its expense, but only upon direction of the Trustee accompanied
by an Opinion of Counsel to the effect that such recordation is necessary to
protect the interests of the Certificateholders. The Trustee shall not be
responsible for determining whether the Pooling and Servicing Agreement should
be recorded in any such office.
For the purpose of facilitating the recordation of the Pooling and
Servicing Agreement as herein provided and for other purposes, the Pooling and
Servicing 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 together constitute but one and the same instrument.
SECTION 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate the Pooling and Servicing Agreement or the Trust, nor will such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor shall it otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, 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 person by reason of any action taken by the parties
to the Pooling and Servicing Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any provision of
the Pooling and Servicing Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to the Pooling and Servicing
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the Voting Rights allocated to the Certificates shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under the Pooling and Servicing Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
15 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of the Pooling and Servicing Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under the Pooling and Servicing Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Certificates. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION 11.04. NOTICES.
All demands and notices under the Pooling and Servicing Agreement shall
be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service, to (a) in the case of the Depositor, 7130 Goodlett Farms
Parkway, Cordova, Tennessee 38018, Attention: President, telecopy number (901)
580-6923, or such other address or telecopy number as may hereafter be furnished
to each party to the Pooling and Servicing Agreement in writing by the
Depositor, (b) in the case of the Master Servicer, 7130 Goodlett Farms Parkway,
Cordova, Tennessee 38018, Attention: President, Union Planters Mortgage,
telecopy number (901) 580-2468, or such other address or telecopy number as may
subsequently be furnished to each party to the Pooling and Servicing Agreement
in writing by the Master Servicer and (c) in the case of the Trustee, at its
address set forth in the Pooling and Servicing Agreement or such other address
or telecopy number as may subsequently be furnished to each party to the Pooling
and Servicing Agreement in writing by the Trustee. Any notice required or
permitted to be mailed to a Certificateholder shall be given by registered mail,
postage prepaid, or by express delivery service, at the address of such Holder
as shown in the Certificate Register. Any notice so mailed within the time
prescribed in the Pooling and Servicing Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
SECTION 11.05. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
the Pooling and Servicing Agreement shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of the
Pooling and Servicing Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Pooling and Servicing Agreement or
of the Certificates or the rights of the Holders thereof.
SECTION 11.06. SALE OF ASSETS.
It is the express intent of the Depositor and the Trustee that the
conveyance of the Assets underlying a Series by the Depositor to the Trustee
pursuant to the related Pooling and Servicing Agreement be construed as a sale
of such Assets by the Depositor to the Trustee. It is, further, not the
intention of the Depositor or the Trustee that such conveyance be deemed a
pledge of such Assets by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
intent of the parties, such Assets are held to continue to be property of the
Depositor, then (a) the Pooling and Servicing Agreement also shall be deemed to
be a security agreement within the meaning of Article 9 of the applicable UCC;
(b) the conveyance by the Depositor provided for in the Pooling and Servicing
Agreement shall be deemed to be a grant by the Depositor to the
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Trustee of a security interest in all of the Depositor's right, title and
interest in and to the Assets and all amounts payable to the holders of the
Assets in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the related Certificate Account
or Distribution Account, whether in the form of cash, instruments, securities or
other property, and including without limitation all amounts from time to time
held or invested in any related Reserve Fund; (c) the possession by the Trustee
or its agent of items of property that constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the applicable UCC; and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. The Depositor and the Trustee (to the extent the Trustee has
been instructed by the Depositor or the Master Servicer) shall take, to the
extent consistent with the Pooling and Servicing Agreement, such actions as may
be necessary to ensure that, if the Pooling and Servicing Agreement were deemed
to create a security interest in the related Assets, 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 Pooling
and Servicing Agreement.
SECTION 11.07. NOTICE TO RATING AGENCY.
(a) The Trustee shall use its best efforts promptly to provide notice
to each applicable Rating Agency and each Certificateholder with respect to each
of the following of which it has actual knowledge, except that no notice
specified below need be sent to any such Certificateholder or each applicable
Rating Agency if already sent pursuant to other provisions of the Pooling and
Servicing Agreement:
(i) any amendment to the Pooling and Servicing Agreement or
any agreement assigned to the Trust;
(ii) the occurrence of any Event of Default involving the
Master Servicer that has not been cured or waived;
(iii) the resignation, termination or merger of the
Depositor, the Master Servicer or the Trustee;
(iv) the purchase or repurchase or substitution of Assets
pursuant to Section 2.05 hereof;
(v) the final payment to the Certificateholders;
(vi) any change in the location of the related Certificate
Account or the Distribution Account;
(vii) any event that would result in the inability of the
Master Servicer to make Advances regarding the related Assets;
(viii) any change in applicable law that would require an
assignment of a Mortgage, not previously recorded, to be recorded in
order to protect the right, title and interest of the Trustee in and to
the related Mortgaged Property or, in case a court should
recharacterize the sale of the related Asset as a financing, to perfect
a first priority security interest in favor of the Trustee in the
related Asset; or
(ix) any change in the Depositor's or the Master Servicer's
name or place of business or the relocation of the Master Servicer
Mortgage Loan Files to a location outside the State of California or
the relocation of the Trustee Mortgage Loan Files to a location outside
of the state where they are originally held by the Trustee or its
Custodian.
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(b) The Master Servicer shall promptly notify the Trustee of any of the
events listed in Section 11.07(a) hereof of which it has actual knowledge. In
addition, the Trustee shall furnish promptly to each Rating Agency, at its
address set forth in the Pooling and Servicing Agreement, copies of the
following:
(i) Each Remittance Report; and
(ii) Each Officer's Certificate supplied by the Master
Servicer to the Trustee and the Certificateholders pursuant to Section
3.12 hereof.
(c) Any notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid or by express delivery service to each Rating
Agency at its address specified in the Pooling and Servicing Agreement.
ARTICLE XII
CONCERNING THE CONTRACT OF INSURANCE HOLDER
SECTION 12.01. COMPLIANCE WITH FHA REGULATIONS AND FILING OF FHA CLAIMS.
(a) The Contract of Insurance Holder shall at all times be reflected as
the mortgagee of record solely for FHA regulatory purposes with respect to each
FHA Asset and shall maintain its status as a HUD approved mortgagee. To the
extent applicable to the duties of the Contract of Insurance Holder hereunder,
the Contract of Insurance Holder shall take or refrain from taking such actions
as directed by the Claims Administrator, as necessary or appropriate to maintain
FHA Insurance for the FHA Assets.
(b) As of the Closing Date and at all times thereafter until the
Termination Date, FHA Insurance will cover the FHA Assets. The Master Servicer
and Claims Administrator, in each such capacity, covenants and agrees that it
shall not take any action that would reduce or otherwise diminish the protection
of the FHA Insurance.
(c) The Trustee hereby appoints the Claims Administrator to facilitate
the servicing of FHA Loans. The Claim Administrator shall perform on behalf of
the Contract of Insurance Holder the duties associated with the submission of
FHA claims in connection with the FHA Insurance, except to the extent that
certain documents must be signed by the Contract of Insurance Holder (in which
case the Contract of Insurance Holder may appoint an attorney-in-fact to sign on
its behalf) and shall not, in its capacity as Claims Administrator or as Master
Servicer, take any action or omit to take any action that would cause the
Contract of Insurance Holder to violate this Section 12.01 or otherwise fail to
maintain valid FHA Insurance or cause any denial by FHA of an insurance claim.
(d) The Contract of Insurance Holder shall not be deemed to have
violated this Section 12.01 and shall otherwise incur no liability hereunder if
any failure to maintain valid FHA Insurance or to comply with FHA regulations
requirements or any denial by FHA of an insurance claim shall have been caused
by any act or omission of the Master Servicer or Claims Administrator in the
performance of its duties hereunder.
(e) No Certificateholder, by virtue of holding a Certificate that
evidences a beneficial interest in any FHA Asset, shall have any right against
FHA or HUD with respect to the FHA Insurance applicable to any FHA Asset, and
each Certificateholder, by its acceptance of such Certificate, or any interest
therein, shall be deemed to have agreed to the foregoing.
SECTION 12.02. REGARDING THE CONTRACT OF INSURANCE HOLDER.
(a) The Trustee, as Contract of Insurance Holder, shall at all times be
approved by HUD as a mortgagee and not resign from the obligations and duties
imposed on it by this Agreement as Contract of Insurance Holder except upon a
determination that by reason of a change in legal requirements or requirements
imposed by the FHA (including, without limitation, loss of its status as a HUD
approved mortgagee) the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements or FHA imposed
requirements in a
-67-
<PAGE> 72
manner which would result in a material adverse effect on the Contract of
Insurance Holder or cause it to become ineligible to hold the FHA Insurance. Any
such determination permitting the resignation of the Contract of Insurance
Holder shall be evidenced by an Opinion of Counsel to such effect delivered and
acceptable to the Trustee. Upon receiving such notice of resignation, the FHA
Insurance shall be transferred to a qualified successor appointed by the Master
Servicer (which qualified successor must be a HUD approved mortgagee) by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Contract of Insurance Holder and one copy to the successor contract of
insurance holder.
(b) If at any time the Contract of Insurance Holder shall become
incapable of acting, or shall fail to perform its obligations hereunder, or its
long-term credit rating assigned by Moody's Investors Service, Inc. shall fall
below "A1" (or such other credit rating as may be determined by the Rating
Agencies from time to time) or shall be adjudged as bankrupt or insolvent, or a
receiver of the Contract of Insurance Holder or of its property shall be
appointed, or any public officer shall take charge or control of the Contract of
Insurance Holder or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or the Contract of Insurance Holder
shall fail to be "well capitalized" within the meaning of the Federal Deposit
Insurance Act and the regulations thereunder, then, in any such case the Trustee
or Master Servicer shall remove the Contract of Insurance Holder and appoint a
successor contract of insurance holder (which successor must be a HUD approved
mortgagee) by written instrument, in duplicate, one copy of which instrument
shall be delivered to the Contract of Insurance Holder so removed and one copy
to the successor contract of insurance holder. Upon removal of the Contract of
Insurance Holder, the outgoing Contract of Insurance Holder shall take all
action required to maintain the benefits of the FHA Insurance; provided that, if
the Contract of Insurance Holder is removed because it has failed to be "well
capitalized" as provided in the preceding sentence, the Master Servicer shall
bear the expenses incurred in connection with such transfer.
(c) Any resignation or removal of the Contract of Insurance Holder and
appointment of a successor contract of insurance holder pursuant to any of the
provisions of this Section 12.02 shall become effective upon acceptance of
appointment by the successor contract of insurance holder.
(d) The rights and protections afforded the Trustee pursuant to Article
8 hereof shall also be afforded to the Contract of Insurance Holder if the
Trustee and the Contract of Insurance Holder are the same Person.
-68-
<PAGE> 73
EXHIBIT 1-A
FORM OF INITIAL CERTIFICATION
[Date]
Union Planters Mortgage Finance Corp.
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
Attention: Secretary
[Master Servicer]
[Address]
[Address]
Attention: [ ]
----------------
Re: Pooling and Servicing Agreement, dated as of _________ 1, 19___,
among Union Planters Mortgage Finance Corp.,
____________________________, as Master Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
UPMFC Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.02 of the Depositor's Standard Terms to
Pooling and Servicing Agreement (May 1998 Edition) (the "Standard Terms"), which
are incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule to the Pooling and Servicing
Agreement (other than any Mortgage Loan paid in full or listed on the attachment
hereto) it, or a Custodian on its behalf, has reviewed the Trustee Mortgage Loan
File and has determined that, except as noted on the Schedule of Exceptions
attached hereto: (i) all documents required to be included in the Trustee
Mortgage Loan File (as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms), other than documents noted in (G) thereof and any
flood insurance policy, are in its possession or in the possession of a
Custodian on its behalf; (ii) such documents have been reviewed by it, or a
Custodian on its behalf, and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, or by a Custodian on its
behalf, and only as to such documents, the information set forth on the Mortgage
Loan Schedule to the Pooling and Servicing Agreement accurately reflects the
information set forth in the Trustee Mortgage Loan File. The undersigned further
certifies that the Trustee's review, or the review of its Custodian, of each
Trustee Mortgage Loan File included each of the procedures listed in Section
2.02(c)(2) of the Standard Terms.
Except as described herein, neither the Trustee, nor any Custodian on
its behalf, has made an independent examination of any documents contained in
any Trustee Mortgage Loan File. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any
documents contained in any Trustee Mortgage Loan File for any of the Mortgage
Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectibility, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Trustee Mortgage Loan File should
include any assumption agreement, modification agreement, written assurance or
substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:
---------------------------
Its:
--------------------------
Exhibit 1-A - Page 1
<PAGE> 74
EXHIBIT 1-B
FORM OF FINAL CERTIFICATION
[Date]
Union Planters Mortgage Finance Corp.
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
Attention: Secretary
[Master Servicer]
[Address]
[Address]
Attention: [ ]
----------------
Re: Pooling and Servicing Agreement, dated as of _________ 1, 19___,
among Union Planters Mortgage Finance Corp.,
____________________________, as Master Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
UPMFC Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.02 of the Depositor's Standard Terms to
Pooling and Servicing Agreement (May 1998 Edition) (the "Standard Terms"), which
are incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, except as noted
on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed in
the Mortgage Loan Schedule to the Pooling and Servicing Agreement (other than
any Mortgage Loan paid in full or listed on the attachment hereto) it, or a
Custodian on its behalf, has received a complete Trustee Mortgage Loan File
which includes each of the documents required to be included in the Trustee
Mortgage Loan File as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms other than documents noted in (G) thereof and any
flood insurance policy.
Neither the Trustee nor any Custodian on its behalf has made an
independent examination of any documents contained in any Trustee Mortgage Loan
File beyond the review specifically required in the above captioned Pooling and
Servicing Agreement. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in any Trustee Mortgage Loan File or any of the Mortgage
Loans listed on the Mortgage Loan Schedule, (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
whether any Trustee Mortgage Loan File should include any assumption agreement,
modification agreement, written assurance or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:
---------------------------
Its:
--------------------------
Exhibit 1-B - Page 1
<PAGE> 75
EXHIBIT 2
FORM OF RECORDATION REPORT
[Date]
[Master Servicer]
[Address]
[Address]
Attention: [________________]
Re: Pooling and Servicing Agreement, _________ 1, 19___,
dated as of among Union Planters
Mortgage Finance Corp.,
_______________________, as Master
Servicer, and _______________, as
Trustee, Pass-Through Certificates,
__________________
UPMFC Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.02 of the Depositor's Standard Terms to
Pooling and Servicing Agreement (May 1998 Edition) (the "Standard Terms"), which
are incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee hereby notifies you, that as of the date
hereof with respect to the following Mortgage Loans it has not received the
indicated documents:
<TABLE>
<CAPTION>
MORTGAGE LOANS DOCUMENTS NOT RECEIVED
- -------------- ------------------------------------------
ORIGINAL RECORDED
ORIGINAL RECORDED ASSIGNMENT OF
MORTGAGE MORTGAGE
OR CERTIFIED COPY OR CERTIFIED COPY
LOAN NUMBER THEREOF THEREOF*
- ----------- ------- --------
<S> <C> <C>
</TABLE>
[TRUSTEE]
as Trustee
By:___________________________
Its:__________________________
- ------------------------------
* Not required for Mortgage Loans for which the Depositor has waived recordation
of Assignments.
Exhibit 2 - Page 1
<PAGE> 76
EXHIBIT 3
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
TO: [Name and Address of Trustee or Custodian]
RE: Pooling and Servicing Agreement, dated as of __________ 1,
19__, among Union Planters Mortgage Finance Corp. (the
"Depositor"), ________________________, as Master Servicer,
and ____________________, as Trustee, which incorporates by
reference the Depositor's Standard Terms to Pooling and
Servicing Agreement (May 1998 Edition) (collectively, the
"Pooling and Servicing Agreement")
In connection with the administration of the Mortgage Loans held by you
as the Trustee or Custodian, we request the release and acknowledge receipt, of
the Trustee Mortgage Loan File [specify documents if only a partial Trustee
Mortgage Loan File is being released]) for the Mortgage Loan described below,
for the reason indicated.
Mortgagor's Name and Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
___ 1. Mortgage Loan Paid in Full. (The Master Servicer
hereby certifies that all amounts received in connection
therewith have been deposited into the applicable Certificate
Account as provided in the Pooling and Servicing Agreement.)
___ 2. Mortgage Loan Liquidated by _________________. (The
Master Servicer hereby certifies that all proceeds of
foreclosure, insurance, condemnation or other liquidation have
been finally received.)
___ 3. Mortgage Loan in Foreclosure.
___ 4. Other (explain). _______________________________
If item 1 or 2 above is checked, and if all or part of the Trustee
Mortgage Loan File was previously released to us, please release to us our
previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Mortgage Loan.
If item 3 or 4 above is checked, upon our return of all of the above
documents to you as the Trustee or Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
Capitalized terms used herein but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
[___________________________],
as Master Servicer
Exhibit 3 - Page 1
<PAGE> 77
By: ______________________________________
Name: ________________________________
Title: ________________________________
Date: ________________________________
Acknowledgment of Documents returned to the Trustee or Custodian:
NAME OF TRUSTEE OR CUSTODIAN
----------------------------
By: ______________________________________
Name: ________________________________
Title: ________________________________
Date: ________________________________
Exhibit 3 - Page 2
<PAGE> 78
EXHIBIT 4
RULE 144A AGREEMENT--QIB CERTIFICATION
UNION PLANTERS MORTGAGE FINANCE CORP., SERIES 19__-_
PASS-THROUGH CERTIFICATES, CLASS ___
________________
(DATE)
[Trustee]
[Address]
[Address]
Attention: [________________]
Union Planters Mortgage Finance Corp.
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
Attention: Secretary
[Master Servicer]
[Address]
[Address]
Attention: [________________]
Gentlemen:
In connection with the purchase on the date hereof of the captioned
securities (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Union Planters Mortgage
Finance Corp. (the "Depositor"), the Master Servicer, the Trustee and the Trust
as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") promulgated under the Securities Act
of 1933, as amended (the "1933 Act") and has completed the form of certification
to that effect attached hereto as Annex A1 (if the Transferee is not a
registered investment company) or Annex A2 (if the Transferee is a registered
investment company). The Transferee is aware that the sale to it is being made
in reliance on Rule 144A.
2. The Transferee understands that the Purchased Certificates
have not been registered under the 1933 Act or registered or qualified under any
state securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the 1933 Act and under applicable state law or
unless an exemption from such registration is available. The Transferee further
understands that neither the Depositor, the Master Servicer, the Trustee nor the
Trust is under any obligation to register the Purchased Certificates or make an
exemption from such registration available.
3. The Transferee is acquiring the Purchased Certificates for its
own account or for the account of a "qualified institutional buyer" (as defined
in Rule 144A, a "QIB"), and understands that such Purchased Certificates may be
resold, pledged or transferred only (a) to a person reasonably believed to be
such a QIB that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the 1933 Act and under applicable state securities laws. IN ADDITION, SUCH
TRANSFER MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS, AS SET FORTH IN SECTION 5.05
OF THE STANDARD TERMS TO THE POOLING AND SERVICING AGREEMENT (THE "STANDARD
TERMS") REFERRED TO BELOW. By its execution of this agreement, the Transferee
agrees that it will not resell, pledge or transfer any of the Purchased
Certificates to anyone otherwise than in strict compliance with Rule 144A, or
pursuant to another exemption from
Exhibit 4 - Page 1
<PAGE> 79
registration under the 1933 Act and all applicable state securities laws, and in
strict compliance with the transfer restrictions set forth in Section 5.05 of
the Standard Terms. The Transferee will not attempt to transfer any or all of
the Purchased Certificates pursuant to Rule 144A unless the Transferee offers
and sells such Certificates only to QIBs or to offerees or purchasers that the
Transferee and any person acting on behalf of the Transferee reasonably believe
(as described in paragraph (d)(l) of Rule 144A) is a QIB.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Pooling and Servicing Agreement referred to below.
5. If applicable, the Transferee has complied, will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of _____________ 1, 19__, which incorporates by reference the Standard
Terms thereto (May 1998 Edition), among the Depositor, the Master Servicer and
____________________, as Trustee, pursuant to which the Purchased Certificates
were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
[TRANSFEREE]
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
Exhibit 4 - Page 2
<PAGE> 80
ANNEX A1 TO EXHIBIT 4
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") promulgated under the Securities Act
of 1933, as amended (the "1933 Act"), because (a) the Transferee owned and/or
invested on a discretionary basis at least $____________ in securities [Note to
reviewer - the amount in the previous blank must be at least $100,000,000 unless
the Transferee is a dealer, in which case the amount filled in the previous
blank must be at least $10,000,000.] (except for the excluded securities
referred to in paragraph 3 below) as of _______________ [specify a date on or
since the end of the Transferee's most recently ended fiscal year] (such amount
being calculated in accordance with Rule 144A) and (b) the Transferee meets the
criteria listed in the category marked below.
_____ Corporation, etc. The Transferee is an organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, a corporation (other than a bank as defined in
Section 3(a)(2) of the 1933 Act or a savings and loan
association or other similar institution referenced in Section
3(a)(5)(A) of the Act), a partnership, or a Massachusetts or
similar business trust.
_____ Bank. The Transferee (a) is a national bank or banking
institution as defined in Section 3(a)(2) of the 1933 Act and
is organized under the laws of a state, territory or the
District of Columbia. The business of the Transferee is
substantially confined to banking and is supervised by the
appropriate 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 as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. bank, and not more than 18
months preceding the date of this certification in the case of
a foreign bank or equivalent institution, a copy of which
financial statements is attached hereto.
_____ Savings and Loan. The Transferee is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution referenced in
Section 3(a)(5)(A) of the 1933 Act. The Transferee is
supervised and examined by a state or federal authority having
supervisory authority over any such institutions or is a
foreign savings and loan association or equivalent institution
and has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. savings and loan
association or similar institution, and not more than 18
months preceding the date of this certification in the case of
a foreign savings and loan association or equivalent
institution, a copy of which financial statements is attached
hereto.
_____ Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Certificates Exchange Act of 1934, as
amended (the "1934 Act").
_____ Insurance Company. The Transferee is an insurance company as
defined in Section 2(13) of the 1933 Act, whose primary and
predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies
and which is subject to supervision by the insurance
commissioner or a similar official or agency of a state,
territory or the District of Columbia.
Exhibit 4 - Page 3
<PAGE> 81
_____ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Certificate Act of 1974, as amended.
_____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as
amended.
_____ Other. The Transferee qualifies as a "qualified institutional
buyer" as defined in Rule 144A on the basis of facts other
than those listed in any of the entries above. If this
response is marked, the Transferee must certify on additional
pages, to be attached to this certification, to facts that
satisfy the Master Servicer that the Transferee is a
"qualified institutional buyer" as defined in Rule 144A.
3. The term "securities" as used herein does not include (a)
securities of issuers that are affiliated with the Transferee, (b) securities
constituting the whole or part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (c) bank deposit notes and
certificates of deposit, (d) loan participations, (e) repurchase agreements, (f)
securities owned but subject to a repurchase agreement and (g) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A
and understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing ______ _____
the Purchased Certificates only YES NO
for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee agrees
that, in connection with any purchase of securities sold to the Transferee for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Transferee will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of Rule
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Exhibit 4 - Page 4
<PAGE> 82
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ day of ___________,
19____.
____________________________
Print Name of Transferee
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
Date: _____________________________________
Exhibit 4 - Page 5
<PAGE> 83
ANNEX A2 TO EXHIBIT 4
REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Purchased Certificates (the "Transferee") or, if the Transferee is part of a
Family of Investment Companies (as defined in paragraph 3 below), is an officer
of the related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") promulgated under the Securities Act
of 1933, as amended (the "1933 Act"), because (a) the Transferee is an
investment company (a "Registered Investment Company") registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and (b) as marked
below, the Transferee alone, or the Transferee's Family of Investment Companies,
owned at least $___________ [Note to reviewer - the amount in the previous blank
must be at least $100,000,000] in securities (other than the excluded securities
referred to in paragraph 4 below) as of ________________ [specify a date on or
since the end of the Transferee's most recently ended fiscal year]. For purposes
of determining the amount of securities owned by the Transferee or the
Transferee's Family of Investment Companies, the cost of such securities to the
Transferee or the Transferee's Family of Investment Companies was used.
_____ The Transferee owned $____________ in securities (other than the
excluded securities referred to in paragraph 4 below) as of the end of
the Transferee's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies which owned
in the aggregate $____________ in securities (other than the excluded
securities referred to in paragraph 4 below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more Registered Investment Companies except for a unit investment trust
whose assets consist solely of shares of one or more Registered Investment
Companies (provided that each series of a "series company," as defined in Rule
18f-2 under the 1940 Act, shall be deemed to be a separate investment company)
that have the same investment adviser (or, in the case of a unit investment
trust, the same depositor) or investment advisers (or depositors) 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 (a)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (b) bank deposit notes and
certificates of deposit, (c) loan participations, (d) repurchase agreements, (e)
securities owned but subject to a repurchase agreement and (f) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that
the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Purchased Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
Exhibit 4 - Page 6
<PAGE> 84
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ____ of ____________,
19____.
____________________________________________
Print Name of Transferee or
Adviser
By:_________________________________________
Name:_______________________________________
Title:______________________________________
IF AN ADVISER:
____________________________________________
Print Name of Transferee
Date:_______________________________________
Exhibit 4 - Page 7
<PAGE> 85
EXHIBIT 5
FORM OF TRANSFEREE AGREEMENT
UNION PLANTERS MORTGAGE FINANCE CORP., SERIES 19___-___
PASS-THROUGH CERTIFICATES
CLASS __
_______________
[Name of Transferee]
________________
(DATE)
[Trustee]
[Address]
[Address]
Attention: [________________]
Union Planters Mortgage Finance Corp.
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
Attention: Secretary
[Master Servicer]
[Address]
[Address]
Attention: [________________]
Re: Union Planters Mortgage Finance Corp., Series 19___-____
Pass-Through Certificates, Class __, representing a [___%
Percentage Interest] [$ denomination]
Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of
the Class __, Class __, Class __ and Class __ Certificates (the "Purchased
Certificates"), issued by the Trust established pursuant to a pooling and
servicing agreement, dated as of ____________ (the "Series Agreement"), among
Union Planters Mortgage Finance Corp. (the "Depositor"), ___________________, as
Master Servicer (the "Master Servicer") and _____________________________, as
Trustee, which incorporates by reference the Depositor's Standard Terms to
Pooling and Servicing Agreement (May 1998 Edition) (the "Standard Terms," and,
collectively with the Series Agreement, the "Agreement"). In doing so the
Transferee hereby acknowledges and agrees as follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. In
connection with the proposed transfer of the Purchased Certificates, the
Transferee represents and warrants to the Depositor, the Master Servicer, the
Trustee and the Trust as follows:
Exhibit 5 - Page 1
<PAGE> 86
(a) The Transferee is purchasing the Purchased
Certificates for its own account as principal for investment purposes
and not with a view to the distribution of the Purchased Certificates,
in whole or in part, in violation of Section 5 of the Securities Act of
1933, as amended (the "Act").
(b) The Transferee has knowledge in financial and
business matters and is capable of evaluating the merits and risks of
an investment in the Purchased Certificates; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to
bear the economic risk of an investment in the Purchased Certificates
and can afford a complete loss of such investment.
(c) The Transferee confirms that the Depositor and the
Master Servicer have made available to the Transferee the opportunity
to ask questions of, and receive answers from, the Depositor and the
Master Servicer concerning the Depositor, the Master Servicer, the
Trust, the purchase by the Transferee of the Purchased Certificates and
all matters relating thereto, and to obtain additional information
relating thereto that the Depositor or the Master Servicer possesses or
can acquire without unreasonable effort or expense.
(d) The Transferee is an "accredited investor" as defined
in paragraph (1), (2), (3) or (7) of Rule 501(a) under the Act.
SECTION 3. COVENANTS OF THE TRANSFEREE. In consideration of the
proposed transfer, the Transferee covenants with each of the Depositor, the
Master Servicer, the Trustee and the Trust as follows:
(a) The Transferee will not make a public offering of the
Purchased Certificates, and will not reoffer or resell the Purchased
Certificates in a manner that would render the issuance and sale of the
Purchased Certificates, whether considered together with the resale or
otherwise, a violation of the Act or any state securities or "Blue Sky"
laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a
holder of the Purchased Certificates, it will assert no claim or
interest in the Assets by reason of owning the Purchased Certificates
other than with respect to amounts that may be properly and actually
payable to the Transferee pursuant to the terms of the Pooling and
Servicing Agreement and the Purchased Certificates.
(c) The Transferee hereby agrees to abide by the terms of
the Agreement that will be applicable to it as a Certificateholder,
including, without limitation, the indemnification provisions contained
in the second sentence of Section 5.05(a) of the Agreement.
(d) If applicable, the Transferee will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
SECTION 4. TRANSFER OF PURCHASED CERTIFICATES.
(a) The Transferee understands that the Purchased Certificates
have not been registered under the Act or any state securities laws and that no
transfer may be made unless the Purchased Certificates are registered under the
Act and under applicable state law or unless an exemption from such registration
is available. If requested by the Master Servicer or the Trustee, the Transferee
and the Holder of Purchased Certificates who desires to effect this transfer
have certified to the Trustee, the Depositor and the Master Servicer as to the
factual basis for the registration or qualification exemption relied upon. The
Transferee further understands that neither the Depositor, the Master Servicer,
the Trustee nor the Trust is under any obligation to register the Purchased
Certificates or make an exemption from such registration available.
(b) In the event that the transfer is to be made within three
years of the date the Purchased Certificates were acquired by a non-Affiliate of
the Depositor from the Depositor or an Affiliate of the Depositor, the Master
Servicer or the Trustee may require an Opinion of Counsel (which shall not be an
expense of the Depositor, the Master Servicer or the Trustee) that such transfer
is not required to be registered under the Act or state securities laws.
Exhibit 5 - Page 2
<PAGE> 87
(c) Any Certificateholder desiring to effect a transfer shall, and
does hereby agree to, indemnify the Depositor, the Master Servicer and the
Trustee against any liability that may result if the transfer is not exempt
under federal or applicable state securities laws.
(d) The transfer of the Purchased Certificates may be subject to
additional restrictions, as set forth in Section 5.05 of the Standard Terms of
the Pooling and Servicing Agreement, a copy of which is attached hereto as Annex
A.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Certification and Agreement to be validly executed by its duly authorized
representative this ____ day of ___________, 19__.
__________________________________________,
____________________________________________
By:_________________________________________
Its:________________________________________
Exhibit 5 - Page 3
<PAGE> 88
ANNEX A TO EXHIBIT 5
ATTACH COPY OF SECTION 5.05 OF THE
STANDARD TERMS TO POOLING AND SERVICING AGREEMENT
Exhibit 5 - Page 4
<PAGE> 89
EXHIBIT 6
BENEFIT PLAN AFFIDAVIT
Re: Union Planters Mortgage Finance Corp.,
UPMFC Trust 19__-__ (the "Trust")
Pass-Through Certificates, Class ___,
Class __ and Class __
)
) ss:
)
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. That I am a duly authorized officer of ______________________,
a _________ corporation (the "Purchaser"), whose taxpayer identification number
is __________, and on behalf of which I have the authority to make this
affidavit.
2. That the Purchaser is acquiring the Class ______ Certificates
("the Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. Section
2510.3-101 (the "Plan Asset Regulations"), a person acting on behalf of
a Plan, or a person using the assets of a Plan and (B) either (I) is
not an insurance company or (II) is an insurance company, in which case
none of the funds used by the Purchaser in connection with its purchase
of the Purchased Certificates constitute plan assets as defined in the
Plan Asset Regulations ("Plan Assets") and its purchase of the
Purchased Certificates shall not result in the certificates issued by
or the assets of the Trust being deemed to be Plan Assets;
(ii) is an insurance company and (A) the Purchaser is
acquiring the Purchased Certificates with funds held in an "insurance
company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), as published in 60
Fed. Reg. 35925 (July 12, 1995)), (B) there is no Plan with respect to
which the amount of such general account's reserves and liabilities for
all contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer, or its affiliates (as defined in
Section V(a)(1) of PTCE 95-60), or by the same employee organization
exceeds or will exceed 10% of the total of all reserves and liabilities
of such general account (as such amounts are determined under Section
I(a) of PTCE 95-60) at the date of acquisition, and (C) the conditions
set forth in PTCE 95-60 have been satisfied and the purchase and
holding of the Private Certificates by or on behalf of the Purchaser
are exempt under PTCE 95-60; or
(iii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to the Depositor, the Master
Servicer, and the Trustee. A Benefit Plan Opinion is an opinion of
counsel to the effect that the proposed transfer will not (a) cause the
assets of the Trust to be regarded as Plan Assets, (b) give rise to
Exhibit 6 - Page 1
<PAGE> 90
a fiduciary duty under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), on the part of the Depositor, the Master
Servicer, or the Trustee, or (c) be treated as, or result in, a
prohibited transaction under Section 406 or 407 of ERISA or Section
4975 of the Code.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of ____________ __, _______, which incorporates by reference the Standard Terms
thereto (May 1998 Edition), among the Depositor, the Master Servicer, and
___________________, as Trustee.
Exhibit 6 - Page 2
<PAGE> 91
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this ____ day of
___________, 19__.
_____________________________
[Name of Purchaser]
By: ____________________________________
Its: ____________________________________
Personally appeared before me ________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
_________________________ of the Purchaser, and acknowledged to me that he
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me this ______ day of ___________, ____.
___________________________________
Notary Public
My commission expires: ______________________________.
Exhibit 6 - Page 3
<PAGE> 92
EXHIBIT 7
FORM OF RESIDUAL TRANSFEREE AGREEMENT
UNION PLANTERS MORTGAGE FINANCE CORP., SERIES 19__-_______
PASS-THROUGH CERTIFICATES,
CLASS __
RESIDUAL TRANSFEREE
_________________
[Name of Transferee]
________________
(DATE)
[Trustee]
[Address]
[Address]
Attention: [________________]
Union Planters Mortgage Finance Corp.
7130 Goodlett Farms Parkway
Cordova, Tennessee 38018
Attention: Secretary
[Master Servicer]
[Address]
[Address]
Attention: [________________]
Re: Union Planters Mortgage Finance Corp., Series 19__-____,
Pass-Through Certificates, Class __, representing a [___%
Percentage Interest] [$ denomination]
Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of
the captioned Certificates (the "Residual Certificates"), issued by the Trust
established pursuant to a pooling and servicing agreement dated as of
__________________, 19____ (the "Series Agreement"), among Union Planters
Mortgage Finance Corp. (the "Depositor"), ________________________, as master
servicer (the "Master Servicer"), and _____________________________, as Trustee,
which incorporates by reference the Standard Terms thereto, _____ 1997 Edition
(the "Standard Terms" and, collectively with the Series Agreement, the
"Agreement"). In doing so the Transferee hereby acknowledges and agrees as
follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
Exhibit 7 - Page 1
<PAGE> 93
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. In
connection with the proposed transfer of the Purchased Certificates, the
Transferee represents and warrants to the Depositor, the Master Servicer, the
Trustee and the Trust as follows:
(a) The Transferee has knowledge in financial and
business matters and is capable of evaluating the merits and risks of
an investment in the Residual Certificates; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed decision; and the Transferee is able to bear the
economic risk of an investment in the Residual Certificates and can
afford a complete loss of such investment.
(b) The Transferee represents that (i) it understands
that each of the Residual Certificates represents for federal income
tax purposes a "residual interest" in a real estate mortgage investment
conduit (a "REMIC") and that, as the holder of the Residual
Certificates, it will be required to take into account, in determining
its taxable income, its pro rata share of the taxable income of the
REMIC, (ii) it understands that it may incur federal income tax
liabilities with respect to the Residual Certificates in excess of any
cash flows generated by the Residual Certificates and (iii) it has
historically paid its debts as they became due and has the financial
wherewithal and intends to continue to pay its debts as they come due
in the future, including any tax imposed on the income that it derives
from the Residual Certificates as such taxes become due.
*(c) The Transferee is acquiring the Residual Certificates
for its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Act").
*(d) The Transferee confirms that the Depositor has made
available to the Transferee the opportunity to ask questions of, and
receive answers from, the Depositor concerning the Depositor, the
Trust, the purchase by the Transferee of the Residual Certificates and
all matters relating thereto, and to obtain additional information
relating thereto that the Depositor possesses or can acquire
unreasonable effort or expense.
SECTION 3. COVENANTS. The Transferee covenants:
*(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Act, or any state securities or "Blue
Sky" laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a
holder of the Residual Certificates, it will assert no claim or
interest in the Mortgage Loans by reason of owning the Residual
Certificates other than with respect to amounts that may be properly
and actually payable to the Transferee pursuant to the terms of the
Pooling and Servicing Agreement and the Certificates.
(c) If applicable, the Transferee will comply with
respect to the Residual Certificates in all material respects with
applicable regulatory guidelines relating to the ownership of mortgage
derivative products.
(d) Upon notice thereof, the Transferee agrees to any
future amendment to the provisions of the Pooling and Servicing
Agreement relating to the transfer of the Residual Certificates (or any
interest therein) that counsel to the Depositor or the Trust may deem
necessary to ensure that any such transfer will not result in the
imposition of any tax on the Trust.
- ------------------------------
* These representations and covenants are to be deleted if the Residual
Securities are not Private Securities.
Exhibit 7 - Page 2
<PAGE> 94
(e) The Transferee hereby agrees that the Master Servicer
or an affiliate thereof will (i) supervise or engage in any action
necessary or advisable to preserve the status of the REMIC as a REMIC,
(ii) be, and perform the functions of, the REMIC's tax matters person
("TMP"), and (iii) employ on a reasonable basis counsel, accountants,
and professional assistance to aid in the preparation of tax returns or
the performance of the above.
(f) The Transferee hereby agrees to cooperate with the
TMP and to take any action required of it by the REMIC Provisions in
order to create or maintain the REMIC status of the REMIC.
(g) The Transferee hereby agrees that it will not take
any action that could endanger the REMIC status of any related REMIC or
result in the imposition of tax on any such REMIC unless counsel for,
or acceptable to, the TMP has provided an opinion that such action will
not result in the loss of such REMIC status or the imposition of such
tax, as applicable.
SECTION 4. ADDITIONAL TRANSFER RESTRICTIONS.
(a) No transfer of the Residual Certificates shall be
made unless the Master Servicer has consented in writing to such
transfer. No Residual Certificate may be transferred to a Disqualified
Organization. The Master Servicer will not consent to any proposed
transfer (i) to any investor that it knows is a Disqualified
Organization or (ii) if the transfer involves less than an entire
interest in a Residual Certificate unless (A) the interest transferred
is an undivided interest or (B) the transferor or the transferee
provides the Master Servicer with an Opinion of Counsel obtained at its
own expense to the effect that the transfer will not jeopardize the
REMIC status of any related REMIC. The Master Servicer's consent to any
transfer is further conditioned the Master Servicer's receipt from the
proposed transferee of (x) a Residual Transferee Agreement, (y) a
Benefit Plan Affidavit, and (z) either (A) if the transferee is a
Non-U.S. Person, an affidavit of the proposed transferee in
substantially the form attached as Exhibit 7-A to Exhibit 7 to the
Standard Terms and a certificate of the transferor stating whether the
Class R Certificate has "tax avoidance potential" as defined in
Treasury Regulations Section 1.860G-3(a)(2), or (B) if the transferee
is a U.S. Person, an affidavit in substantially the form attached as
Exhibit 7-B to Exhibit 7 to the Standard Terms. In addition, if a
proposed transfer involves a Private Certificate, (1) the Master
Servicer or the Trustee shall require that the transferor and
transferee certify as to the factual basis for the registration or
qualification exemption(s) relied upon to exempt the transfer from
registration under the Act and all applicable state securities or "blue
sky" laws, and (2) if the transfer is to be made within three years
after the acquisition thereof by a non-Affiliate of the Depositor from
the Depositor or an Affiliate of the Depositor, the Master Servicer or
the Trustee also may require an Opinion of Counsel that such transfer
may be made without registration or qualification under the Act and
applicable state securities laws, which Opinion of Counsel shall not be
obtained at the expense of the Depositor, the Trustee or the Master
Servicer. Notwithstanding the foregoing, no Opinion of Counsel shall be
required in connection with the initial transfer of the Residual
Certificates or their transfer by a broker or dealer, if such broker or
dealer was the initial transferee. Notwithstanding the fulfillment of
the prerequisites described above, the Master Servicer may withhold its
consent to, or the Trustee may refuse to recognize, a transfer of a
Residual Certificate, but only to the extent necessary to avoid a risk
of disqualification of a related REMIC as a REMIC or the imposition of
a tax upon any such REMIC. Any attempted transfer in violation of the
foregoing restrictions shall be null and void and shall not be
recognized by the Trustee.
(b) If a tax or a reporting cost is borne by a related
REMIC as a result of the transfer of the Residual Certificates or any
beneficial interest therein, in violation of the restrictions
referenced herein, the Transferor shall pay such tax or cost and, if
such tax or costs are not so paid, the Trustee, upon notification from
the Master Servicer, shall pay such tax or reporting cost with amounts
that otherwise would have been paid to the transferee of such Residual
Certificates. In that event, neither the Transferee nor the transferor
shall have any right to seek repayment of such amounts from the
Depositor, the Master Servicer, the Trustee, the Trust, the REMIC or
the holders of any other Certificates, and none of such parties shall
have any liability for payment of any such tax or reporting cost. In
the event that a Residual Certificate is transferred to a Disqualified
Organization, the Master Servicer shall make, or cause to be made,
available the information necessary for the computation of the excise
tax imposed under section 860E(e) of the Code.
Exhibit 7 - Page 3
<PAGE> 95
SECTION 5. ACKNOWLEDGMENTS.
(a) The Transferee acknowledges that, if the Residual
Certificates are Private Certificates, the Residual Certificates have
not been registered under the Act or registered or qualified under any
state securities laws and that no transfer may be made unless the
Purchased Certificates are registered under the Act and under
applicable state law or unless an exemption from such registration is
available. The Transferee further understands that neither the
Depositor, the Master Servicer nor the Trust is under any obligation to
register the Certificate or make an exemption from such registration
available.
(b) The Transferee acknowledges that if any United States
federal income tax is due at the time a Non-U.S. Person transfers a
Residual Certificate, the Trustee or its designated Paying Agent or
other person who is liable to withhold federal income tax from a
distribution on a Residual Certificate under sections 1441 and 1442 of
the Code and the regulations thereunder (the "Withholding Agent") may
(i) withhold an amount equal to the taxes due upon disposition of the
Certificate from future distributions made with respect to the
Certificate to the transferee (after giving effect to the withholding
of taxes imposed on such transferee), and (ii) pay the withheld amount
to the Internal Revenue Service unless satisfactory written evidence of
payment of the taxes due by the transferor has been provided to the
Withholding Agent. Moreover, the Withholding Agent may (x) hold
distributions on a Certificate, without interest, pending determination
of amounts to be withheld, (y) withhold other amounts required to be
withheld pursuant to United States federal income tax law, if any, from
distributions that otherwise would be made to such transferee on each
Certificate it holds, and (z) pay to the Internal Revenue Service all
such amounts withheld.
(c) The Transferee acknowledges that the transfer of all
or part of the Residual Certificates that have "tax avoidance
potential" (as defined in Treasury Regulations section 1.860G-3(a)(2)
or any successor provision) to a Non-U.S. Person will be disregarded
for all federal income tax purposes.
(d) The Transferee acknowledges that the transfer of the
Residual Certificates to a U.S. Person will be disregarded for all
federal income tax purposes if a significant purpose of the transfer is
to impede the assessment or collection of the taxes and expenses
associated with the security within the meaning of Treasury regulation
section 1.860E-1(c)(1).
IN WITNESS WHEREOF, the undersigned has caused the Pooling and
Servicing Agreement be validly executed by its duly authorized representative as
of the day and year first above written.
____________________________________________
[Name of Transferee]
By: _______________________________________
Its: _______________________________________
Exhibit 7 - Page 4
<PAGE> 96
EXHIBIT 7-A
UNION PLANTERS MORTGAGE FINANCE CORP.
FOREIGN PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(a) AND 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Union Planters Mortgage Finance Corp.
Series __________ Trust (the "Trust")
Pass-Through Certificates, Class __
STATE OF ___________ )
) ss.:
COUNTY OF __________ )
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true,
correct, and complete:
1. I am a duly authorized officer of ___________________ (the
"Transferee"), and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the securities
(the "Residual Certificates"), which represent a residual interest in one or
more real estate mortgage investment conduits (each, a "REMIC") for which
elections are to be made under Section 860D of the Internal Revenue Code of
1986, as amended (the "Code").
3. The Transferee is a foreign person within the meaning of
Treasury Regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a
citizen or resident of the United States, (ii) a corporation or partnership that
is organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income tax regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to Section 1441 or 1442 of the
Code on income derived from the Residual Certificates (a "Non-U.S. Person").
4. The Transferee agrees that it will not hold the Residual
Certificates in connection with a trade or business in the United States, and
the Transferee understands that it will be subject to United States federal
income tax under sections 871 and 881 of the Code in accordance with section
860G of the Code and any Treasury regulations issued thereunder on "excess
inclusions" that accrue with respect to the Residual Certificates during the
period the Transferee holds the Residual Certificates.
5. The Transferee understands that the federal income tax on
excess inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States
federal income tax return for the year in which disposition of a Residual
Certificate it holds occurs (or earlier if required by law) and will pay any
United States federal income tax due at that time and (ii) if any tax is due at
that time, to provide satisfactory written evidence of payment to the Trustee or
its designated paying agent or other person who is liable to withhold federal
income tax from a
Exhibit 7-A - Page 1
<PAGE> 97
distribution on the Residual Certificates under sections 1441 and 1442 of the
Code and the regulations thereunder (the "Withholding Agent").
7. The Transferee understands that, until such written notice is
provided, the Withholding Agent may (i) withhold an amount equal to the taxes
due upon disposition of a Residual Certificates from future distributions made
with respect to the Residual Certificate to subsequent transferees (after giving
effect to the withholding of taxes imposed on such subsequent transferees), and
(ii) pay the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may
withhold other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificates it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual
Certificate (or any interest therein) to a United States Person (including a
foreign person who is subject to net United States federal income taxation with
respect to such Residual Certificate), the Withholding Agent may disregard the
transfer for federal income tax purposes if the transfer would have the effect
of allowing the Transferee to avoid tax on accrued excess inclusions and may
continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual
Certificate (or any interest therein) to a Non-U.S. Person (i.e., a foreign
person who is not subject to net United States federal income tax with respect
to such Residual Certificate) will not be recognized unless the Withholding
Agent has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as
defined below), and the Transferee is not acquiring a Residual Certificate for
the account of, or as agent or nominee of, or with a view to the transfer of
direct or indirect record or beneficial ownership to, a Disqualified
Organization. For the purposes hereof, a Disqualified Organization is any of the
following: (i) the United States, any State or political subdivision thereof,
any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing; (ii) any organization (other than a
farmer's cooperative as defined in Section 521 of the Code) that is exempt from
federal income taxation (including taxation under the unrelated business taxable
income provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the
Pooling and Servicing Agreement that shall be deemed necessary by the Depositor
(upon the advice of counsel to the Depositor) to constitute a reasonable
arrangement to ensure that no interest in a Residual Certificate will be owned
directly or indirectly by a Disqualified Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code
would impose a substantial tax on the transferor or, in certain circumstances,
on an agent for the transferee, with respect to any transfer of any interest in
any Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, 19__, which incorporates by reference the Standard Terms
thereto (May 1998 Edition), among the Depositor, the Master Servicer, and
____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf, by its duly authorized officer as of the _______
day of _____________, 19__.
Exhibit 7-A - Page 2
<PAGE> 98
_____________________________________________________
[Name of Transferee]
By: _________________________________________________
Its: ________________________________________________
Personally appeared before me ___________________________, known or
proved to me to be the same person who executed the foregoing instrument and to
be a ______________________ of the Transferee, and acknowledged to me that he or
she executed the same as his or her free act and deed and as the free act and
deed of the Transferee.
Subscribed and sworn before me this ______ day of __________, 19__.
_____________________________________________________
Notary Public
My commission expires the _____ day of ________________, 19__.
Exhibit 7-A - Page 3
<PAGE> 99
EXHIBIT 7-B
UNION PLANTERS MORTGAGE FINANCE CORP.
AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) AND 860E(e)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: Union Planters Mortgage Finance Corp.
Series ________ Trust (the "Trust")
Pass-Through Certificates, Class ___
STATE OF __________________________ )
) ss.:
COUNTY OF _________________________ )
Under penalties of perjury, I, the undersigned declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of ______________________ (the
"Transferee"), on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities
(the "Residual Certificates"), which represent residual interests in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the
United States, (ii) a domestic partnership or corporation, (iii) an estate or
trust that is subject to United States federal income tax regardless of the
source of its income, or (iv) a foreign person who would be subject to United
States income taxation on a net basis on income derived from the Residual
Certificates (a "U.S. Person").
4. The Transferee is a not a "Disqualified Organization" (as
defined below), and the Transferee is not acquiring a Residual Certificate for
the account of, or as agent or nominee of, or with a view to the transfer of
direct or indirect record or beneficial ownership to, a Disqualified
Organization. For the purposes hereof, a Disqualified Organization is any of the
following: (i) the United States, any State or political subdivision thereof,
any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing; (ii) any organization (other than a
farmer's cooperative as defined in Section 521 of the Code) that is exempt from
federal income taxation (including taxation under the unrelated business taxable
income provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
Exhibit 7-B - Page 1
<PAGE> 100
5. The Transferee agrees to consent to any amendment of the
Pooling and Servicing Agreement that shall be deemed necessary by the Issuer
(upon advice of counsel to the Issuer) to constitute a reasonable arrangement to
ensure that no interest in a Residual Certificate will be owned directly or
indirectly by a Disqualified Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code
would impose a substantial tax on the transferor or, in certain circumstances,
on an agent for the transferee, with respect to any transfer of any interest in
any Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, 19__, which incorporates by reference the Standard Terms
thereto (May 1998 Edition), among the Depositor, the Master Servicer, and
____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf by its duly authorized officer this ____ day of
______, 19__.
____________________________________________
[Name of Transferee]
By: ________________________________________
Its: _______________________________________
Personally appeared before me ___________________, known or proved to
me to be the same person who executed the foregoing instrument and to be a
_______________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ____ day of ________, 19__.
____________________________________________
Notary Public
My commission expires the ____ day of ____________________, 19__.
Exhibit 7-B - Page 2
<PAGE> 101
EXHIBIT 8
UNION PLANTERS MORTGAGE FINANCE CORP.,
[ ]
AND
[ ]
TRUSTEE
__________
SERIES 19__-__ POOLING AND SERVICING AGREEMENT
DATED AS OF ________ ___, 19___
__________
UNION PLANTERS MORTGAGE FINANCE CORP.,
PASS-THROUGH CERTIFICATES, SERIES 19___-___
Exhibit 8 - Page 1
<PAGE> 102
THIS SERIES 19___-___ POOLING AND SERVICING AGREEMENT, dated as of
______________ 1, 19___, is made with respect to the formation of UPMFC Trust
19___-___ (the "Trust") among UNION PLANTERS MORTGAGE FINANCE CORP., a Delaware
corporation (the "Depositor"), ______________________, a _____________
corporation ("___" and, in its capacity as master servicer, the "Master
Servicer"), and [_______________________], a national banking association, as
trustee (the "Trustee"), under this Agreement and the Standard Terms to Pooling
and Servicing Agreement, May 1998 Edition (the "Standard Terms"), all the
provisions of which are incorporated herein as modified hereby and shall be a
part of this Agreement as if set forth herein in full (this Agreement with the
Standard Terms so incorporated, the "Pooling and Servicing Agreement").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given them in the Standard Terms.
PRELIMINARY STATEMENT
The Depositor has duly authorized the formation of the Trust to issue a
Series of Certificates with an aggregate initial principal amount of
$[___________], to be known as the Senior/Subordinated Pass-Through
Certificates, Series 19___-___ (the "Certificates"). The Certificates consist of
___ Classes that in the aggregate evidence the entire beneficial ownership
interest in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee
will make an election to treat all of the assets of the Trust as [two] real
estate mortgage investment conduits (each, a "REMIC" and, individually, the
"Pooling REMIC" and the "Issuing REMIC") for federal income tax purposes. The
Pooling REMIC will consist of the Distribution Account and the Assets listed on
the Asset Schedule attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the [________] Subaccounts designated as provided herein,
the Class [_____] Liquidity Account and the Class [_______] Liquidity Account.
The "startup day" of each REMIC for purposes of the REMIC Provisions is the
Closing Date.
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
the Depositor hereby bargains, sells, conveys, assigns and transfers to the
Trustee, in trust and as provided in this Pooling and Servicing Agreement,
without recourse and for the exclusive benefit of the Holders of the
Certificates, all of the Depositor's right, title and interest in and to, and
any and all benefits accruing to the Depositor from, (a) the Assets listed in
Schedule I hereto, together with the related Asset Documents, and all payments
thereon and proceeds of the conversion, voluntary or involuntary, of the
foregoing, including, without limitation, all rights to receive all principal
and interest payments due on the Assets after the Cut-off Date, including such
scheduled payments received by the Depositor or Seller on or prior to the
Cut-off Date, and Principal Prepayments, Net Insurance Proceeds, Net Liquidation
Proceeds, Repurchase Prices and other unscheduled collections received on the
Assets on and after the Cut-off Date; (b) the security interests in the
Mortgaged Properties granted by the Obligors pursuant to the related Assets; (c)
all funds, other than investment earnings, relating to the Assets on deposit in
the Certificate Account or the Distribution Account for the Certificates and all
proceeds thereof, whether in the form of cash, instruments, securities or other
properties; (d) the Class _________ Liquidity Account, the Class _______
Liquidity Account and all amounts on deposit in each; (e) any and all rights,
privileges and benefits accruing to the Depositor under the Sales Agreement with
respect to the Assets (provided that the Depositor shall retain its rights to
indemnification from the Seller under such Sales Agreement, but also hereby
conveys its rights to such indemnification to the Trustee as its assignee),
including the rights and remedies with respect to the enforcement of any and all
representations, warranties and covenants under such Sales Agreement; and (f)
proceeds of all the foregoing (including, but not by way of limitation, all
proceeds of any Standard Hazard Insurance Policy or FHA Insurance, or any other
insurance policy relating to any of the Assets, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables that at any time constitute all or part or are
included in the proceeds of any of the foregoing) to make distributions on the
Certificates as specified herein (the items referred to in clauses (a) through
(f) above shall be collectively referred to herein as the "Trust Estate").
Exhibit 8 - Page 2
<PAGE> 103
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required 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 1. STANDARD TERMS.
The Depositor, the Master Servicer and the Trustee acknowledge that the
Standard Terms prescribe certain obligations of the Depositor, the Master
Servicer and the Trustee with respect to the Certificates. The Depositor, the
Master Servicer and the Trustee agree to observe and perform such prescribed
duties, responsibilities and obligations, and acknowledge that, except to the
extent inconsistent with the provisions of this Pooling and Servicing Agreement,
the Standard Terms are and shall be a part of this Pooling and Servicing
Agreement to the same extent as if set forth herein in full.
SECTION 2. DEFINED TERMS.
With respect to the Certificates and in addition to or in replacement
for the definitions set forth in Section 1.01 of the Standard Terms, the
following definitions shall be assigned to the defined terms set forth below:
"Accrual Date": The Accrual Date (i) with respect to the Class [LIBOR]
Certificates shall be the Closing Date and (ii) with respect to all other
Classes of Certificates shall be __________ 1, 19___.
"Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Mortgage Property has been repossessed or
foreclosed upon but not yet disposed of) as to which a Monthly Payment thereon
is delinquent 60 days or more as of the end of the related Collection Period,
and the denominator of which is the Pool Scheduled Principal Balance for such
Distribution Date.
"Average Thirty-Day Delinquency Ratio": With respect to any
Distribution Date, the arithmetic average of the Thirty-Day Delinquency Ratios
for such Distribution Date and the two preceding Distribution Dates. The
"Thirty-Day Delinquency Ratio" for a Distribution Date is the percentage derived
from the fraction, the numerator of which is the aggregate Scheduled Principal
Balance (as of the end of the preceding Prepayment Period) of all Assets
(including Assets in respect of which the related Mortgage Property has been
repossessed or foreclosed upon but not yet disposed of) as to which a Monthly
Payment thereon is delinquent 30 days or more as of the end of the related
Collection Period, and the denominator of which is the Pool Scheduled Principal
Balance for such Distribution Date.
"Book-Entry Certificates": The Class A and Class B Certificates.
"Carryover Interest Amount": With respect to each Class of
Certificates, except the Class X Certificates and the Residual Certificates, and
each Distribution Date, all amounts that were distributable on such Class as
Interest Distribution Amounts on previous Distribution Dates that remain unpaid,
together with interest on each overdue Interest Distribution Amount that
comprises the Carryover Interest Amount at the Pass-Through Rate in effect for
such Class from time to time from the last day of the Interest Accrual Period in
which such overdue Interest Distribution Amount accrued through the last day of
the related Interest Accrual Period, to the extent not previously distributed.
With respect to each Subaccount on each Distribution Date, all amounts that were
allocable to such Subaccount as Priority Interest Amounts on previous
Distribution Dates that remain unpaid, together with interest on each overdue
Priority Interest Amount that comprises the Carryover Interest Amount at the
applicable Pass-Through Rate in effect for the Corresponding Certificates with
respect to such Subaccount from time to time from the last day of the Interest
Accrual Period in which such overdue Priority Interest Amount accrued through
the last day of the related Interest Accrual Period, to the extent not
previously distributed.
"Carryover Non-Priority Interest Amount": For any Subaccount, on any
Distribution Date, all amounts that were distributable on such Subaccount as
Non-Priority Interest Amounts on previous Distribution Dates that remain unpaid.
Exhibit 8 - Page 3
<PAGE> 104
"Class A Certificates": The Class A-__ Certificates, Class A-__
Certificates, Class A-__ Certificates, Class A-__ Certificates, Class A-__
Certificates and Class A-__ Certificates.
"Class A Percentage": With respect to each Distribution Date, generally
the percentage derived from the fraction (which shall not be greater than 1),
the numerator of which is the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates immediately prior to such Distribution Date. The "Class A Principal
Balance" and "Class B Principal Balance" will be based on the Certificate
Principal Balance of the Certificates.
"Class A-___ Liquidity Account": The fund established pursuant to
Section 6(a) hereof and to be applied specifically to the Class A-___
Certificates. The Class A-___ Liquidity Account shall be deemed to be a "Reserve
Fund" as such term is defined in the Standard Terms.
"Class A-__ Liquidity Account Draw Amount": On any Distribution Date,
the lesser of (i) the amount on deposit in the Class A-___ Liquidity Account,
and (ii) the aggregate amount of any Interest Distribution Amounts and Carryover
Interest Amounts due on the Class A-___ Certificates that are not distributed
out of the Available Distribution Amount for such Distribution Date.
"Class A-___ Liquidity Account Required Amount": On any Distribution
Date, three months of interest at the Class A-___ Pass-Through Rate on the Class
A-___ Certificate Principal Balance after giving effect to principal
distributions on such Distribution Date.
"Class A Subaccounts": Any or all, as appropriate, of the Class A-___,
Class A-___, Class A-___, Class A-___, Class A-___ or Class A-___ Subaccounts.
"Class B Certificates": The Class B-___ Certificates and Class B-___
Certificates.
"Class B-__ Liquidity Account": The fund established pursuant to
Section 6(b) hereof and to be applied specifically to the Class B-__
Certificates. The Class B-__ Liquidity Account shall be deemed to be a "Reserve
Fund" as such term is defined in the Standard Terms.
"Class B-__ Liquidity Account Draw Amount": On any Distribution Date,
the lesser of (i) the amount on deposit in the Class B-__ Liquidity Account, and
(ii) the aggregate amount of any Interest Distribution Amounts and Carryover
Interest Amounts due on the Class B-__ Certificates that are not distributed out
of the Available Distribution Amount for such Distribution Date.
"Class B-__ Liquidity Account Required Amount": On any Distribution
Date, three months of interest at the Class B-__ Pass-Through Rate on the Class
B-__ Certificate Principal Balance after giving effect to principal
distributions on such Distribution Date.
"Class B Cross-over Date": The later to occur of (a) the Distribution
Date occurring in _________ 20__ or (b) the first Distribution Date on which the
Class B Percentage equals or exceeds ____ times the initial Class B Percentage.
"Class B Percentage": With respect to each Distribution Date, the
difference between 100% and the Class A Percentage for such Distribution Date.
"Class B Principal Distribution Tests": With respect to each
Distribution Date: (a) the Average Sixty-Day Delinquency Ratio as of such
Distribution Date does not exceed 5%; (b) the Average Thirty-Day Delinquency
Ratio as of such Distribution Date does not exceed 7%; (c) the Cumulative
Realized Losses as of such Distribution Date do not exceed an amount equal to
the percentage set forth below of the initial aggregate Certificate Principal
Balance of all the Certificates:
Exhibit 8 - Page 4
<PAGE> 105
<TABLE>
<CAPTION>
Distribution Dates Percentage
------------------ ----------
<S> <C>
_________ 20__ through ________ 20__ 7%
_________ 20__ through ________ 20__ 8%
_________ 20__ through and after 9%
</TABLE>
; and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
"Class B Subaccounts": Any or all, as appropriate, of the Class B-___
or Class B-___ Subaccounts.
"Class R Certificates": The Class R Certificates, which comprise both
the Pooling REMIC Residual Interest and the Issuing REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-1 Certificates,
which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-2 Certificates,
which will represent the Pooling REMIC Residual Interest.
"Class X Carryover Strip Amount": With respect to the Class X
Certificates on each Distribution Date, all amounts that were distributable on
such Class as Class X Strip Amounts on previous Distribution Dates that remain
unpaid.
"Class X Certificates": The Class X Certificates created pursuant to
Section 3 hereof.
"Class X Strip Amount": With respect to any Distribution Date, 30 days
interest on the aggregate Certificate Principal Balance of the Class A
Certificates and the Class B Certificates at a rate equal to the difference, if
any, between the Weighted Average Net Asset Rate and the weighted average of the
Pass-Through Rates on the Class A Certificates and the Class B Certificates.
"Closing Date": _____________ ___, 19___.
"Corporate Trust Office": The address set forth hereinbelow under
"Trustee".
"Corresponding Certificates": For any Subaccount, the Class of
Certificates bearing the same letter and numerical designation as that borne by
such Subaccount.
"Corresponding Subaccount" For any Class of Certificates, the
Subaccount bearing the same letter and numerical designation as that borne by
such Class.
"Cumulative Realized Losses": With respect to any Distribution Date,
the aggregate Realized Losses incurred on the Assets during the period from the
Cut-off Date through the end of the related Prepayment Period.
"Current Realized Loss Ratio": With respect to any Distribution Date,
the annualized percentage derived from the fraction, the numerator of which is
the sum of the aggregate Realized Losses for the three preceding Prepayment
Periods and the denominator of which is the arithmetic average of the Pool
Scheduled Principal Balances for such Distribution Date and the preceding two
Distribution Dates.
"Cut-off Date": _______________ 1, 19___.
"ERISA Restricted Certificates": The Class A-___, Class B-___, Class
B-___, Class X and Class R Certificates.
Exhibit 8 - Page 5
<PAGE> 106
"Floating Rate Determination Date": For any Interest Accrual Period for
the Class [LIBOR] Certificates, the second London Banking Day prior to the
commencement of such Interest Accrual Period.
"Institutional Holder": An insurance company whose long-term debt is
rated at least A- by a Rating Agency, or an equivalent rating from any other
nationally recognized statistical rating organization.
"Interest Distribution Amount": On each Distribution Date, an amount
equal to interest accrued at the applicable Pass-Through Rate for the related
Interest Accrual Period on (i) in the case of the Senior Certificates or the
Senior Subaccounts, the Certificate Principal Balance of such Class or the
Subaccount Principal Balance of such Subaccount, respectively, immediately prior
to that Distribution Date and (ii) in the case of the Offered Subordinated
Certificates or the Corresponding Subaccounts, on the Certificate Principal
Balance of such Class or the Subaccount Principal Balance of such Subaccount,
respectively, immediately prior to that Distribution Date.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts, the
Class A-__ Liquidity Account and the Class B-___ Liquidity Account.
"Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.
"London Banking Day": Any day on which commercial banks and foreign
exchange markets settle payments in London and New York City.
"Non-Priority Interest Amount": For any Subaccount, on any Distribution
Date, an amount equal to the positive difference, if any, between (i) the
related Interest Distribution Amount for such Subaccount and (ii) the related
Priority Interest Amount for such Subaccount.
"Notional Principal Balance": The Notional Principal Balance of the
Class X Certificates on any date shall equal the sum of all of the Subaccount
Principal Balances on such date.
"Offered Subordinated Certificates": The Class A-___ and Class B
Certificates.
"Pass-Through Rate": With respect to each Class of Certificates (except
the Class X Certificates and the Residual Certificates) on any Distribution
Date, the per annum rate for such Class set forth in the table in Section 3
hereof. With respect to any Subaccount on any Distribution Date, the then
applicable Weighted Average Net Asset Rate.
"Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.
"Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Shortfall Carryover Amount": With respect to
each Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates.
"Priority Interest Amount": For any Subaccount, on any Distribution
Date, an amount equal to interest accrued at the applicable Pass-Through Rate
for the related Interest Accrual Period on the Corresponding Certificates.
"Private Certificates": The Class X Certificates and Residual
Certificates.
"Qualified Bidders": Firms and institutions that are engaged in the
business of buying and selling pools of mortgage loans.
Exhibit 8 - Page 6
<PAGE> 107
"Rating Agency": Each of [Rating Agency], [Address], and [Rating
Agency], [Address].
"Regular Certificates": The Class A Certificates, Class B Certificates
and Class X Certificates.
"Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 9(b)
hereof, the Class R-1 Certificates and Class R-2 Certificates.
"Rule 144A Certificates": The Class X and Residual Certificates.
"Senior Certificates": The Class A-__, Class A-__, Class A-__, Class
A-__ and Class A-__ Certificates.
"Senior Subaccounts": The Class A-__, Class A-__, Class A-__, Class
A-__ and Class A-__ Subaccounts.
"Servicing Fee Rate": [____]% per annum.
"Subaccount": Each of the following eight subaccounts established
solely for purposes of the REMIC Provisions by the Trustee, which have the
Pass-Through Rates and initial Subaccount Principal Balances set forth below:
<TABLE>
<CAPTION>
INITIAL
PASS-THROUGH SUBACCOUNT
SUBACCOUNT RATE PRINCIPAL BALANCE
---------- ---- -----------------
<S> <C> <C>
A-__ (1) $__________
A-__ (1) $__________
A-__ (1) $__________
A-__ (1) $__________
A-__ (1) $__________
A-__ (1) $__________
B-__ (1) $__________
B-__ (1) $__________
</TABLE>
(1) The Pass-Through Rate on each Subaccount for any
Distribution Date shall be equal to the Weighted Average Net Asset
Rate.
The final scheduled Distribution Date for each Subaccount is the
____________ 20___ Distribution Date. For purposes of Treasury Regulation
Section 1.860G-1(a)(4), the latest possible maturity date for each of the
Subaccounts shall be the _________ 20____ Distribution Date.
"Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such Subaccount in the definition of "Subaccount" above,
minus all amounts allocated to such Subaccount in reduction of its Subaccount
Principal Balance pursuant to Section 5(a) hereof.
"Subordinated Certificates": The Class A-___, Class B-___, Class B-___,
Class X and Residual Certificates.
"Trustee": [ ], not in its individual capacity but solely as Trustee
under this Pooling and Servicing Agreement, or any successor trustee appointed
as herein provided. Notices to the Trustee shall be sent to Corporate Trust
Department, [Address], Attn: UPMFC Trust 19___-___ (the "Corporate Trust
Office"), or its successor in interest.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
Exhibit 8 - Page 7
<PAGE> 108
"Underwriters": ___________________________ (whose address is
______________________________), and ____________________ (whose address is
____________________________________).
"Weighted Average Net Asset Rate": With respect to any Distribution
Date, the weighted average of the Asset Rates applicable to the Monthly Payments
that were due during the related Collection Period on Assets that were
Outstanding at the beginning of the related Prepayment Period, less the
Servicing Fee Rate.
SECTION 3. CERTIFICATES.
The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$___________, except for Certificates executed and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued
in ten Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
<TABLE>
<CAPTION>
INITIAL FINAL
CERTIFICATE SCHEDULED
PRINCIPAL PASS THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(7)
- ----------- ------- ---- -------
<S> <C> <C> <C>
A-__ $__________ (1) ________ 15, 20__
A-__ $__________ _____% ________ 15, 20__
A-__ $__________ _____% ________ 15, 20__
A-__ $__________ _____% ________ 15, 20__
A-__ $__________ _____% ________ 15, 20__
A-__ $__________ (2) ________ 15, 20__
B-__ $__________ (3) ________ 15, 20__
B-__ $__________ (4) ________ 15, 20__
X (5) (5) ________ 15, 20__
R (6) (6) ________ 15, 20__
</TABLE>
(1) The Pass-Through Rate on the Class A-__ Certificates for any
Distribution Date shall be the per annum rate equal to the lesser of
One-Month LIBOR, as determined (except for the initial Distribution
Date) on the applicable Floating Rate Determination Date, plus ______%
or the Weighted Average Net Asset Rate. For the initial Distribution
Date, the Pass-Through Rate for the Class A-__ Certificates will be
______% per annum, and the initial Interest Accrual Period for the
Class A-__ Certificates commences on the Closing Date and ends on
_________ 14, 19___.
(2) The Pass-Through Rate on the Class A-___ Certificates for any
Distribution Date shall be equal to the lesser of (i) ______% per annum
or (ii) the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class B-__ Certificates for any
Distribution Date shall be equal to the lesser of (i) _____% per annum
or (ii) the Weighted Average Net Asset Rate.
(4) The Pass-Through Rate on the Class B-___ Certificates for any
Distribution Date shall be equal to the lesser of (i) _______% per
annum or (ii) the Weighted Average Net Asset Rate.
(5) The Class X Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate. The Class X Certificates will
represent the right to receive, on each Distribution Date, the
applicable Class X Strip Amount and any Class X Carryover Strip Amount.
(6) The Class R Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate, and shall represent the residual
interest in both the Pooling REMIC and the Issuing REMIC. Following the
division
Exhibit 8 - Page 8
<PAGE> 109
of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with
Section 9(b) hereof, the Class R-1 and Class R-2 Certificates shall
have no Certificate Principal Balances and no Pass-Through Rates and
shall represent the residual interest in the Issuing REMIC and the
Pooling REMIC, respectively.
(7) For purposes of Treasury Regulation Section 1.860G-1(a)(4),
the latest possible maturity date of each Class of Certificates shall
be the Final Scheduled Distribution Date.
SECTION 4. DENOMINATIONS.
The Book-Entry Certificates will be registered as one or more
certificates in the name of the Clearing Agency or its nominee. Beneficial
interests in the Book-Entry Certificates will be held by the Beneficial Owners
through the book-entry facilities of the Clearing Agency, in minimum
denominations of $[1,000] and integral multiples of $1 in excess thereof.
The Class X Certificates and the Residual Certificates will be issued
in certificated, fully registered form. The Class X Certificates and the
Residual Certificates will be issued in minimum Percentage Interests equal to
[1]%.
SECTION 5. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate the Available Distribution Amount to the
various Subaccounts, and, where applicable, ___, to the extent of the amount
thereof remaining after application pursuant to clauses (1) through (4) of
Section 4.03 of the Standard Terms, in the following manner and in the following
order of priority:
(i) First, concurrently, to each Senior Subaccount, (A) first, its
Priority Interest Amount for such Distribution Date, with the Available
Distribution Amount being allocated among the Senior Subaccounts pro
rata based on their respective Priority Interest Amount, and (B)
second, the related Carryover Interest Amount for such Distribution
Date, if any, allocated first to pay all interest accrued and unpaid on
overdue Priority Interest Amounts and then to pay such overdue Priority
Interest Amounts, in each case with the Available Distribution Amount
being allocated among the Senior Subaccounts pro rata based on their
respective Carryover Interest Amounts;
(ii) Second, to the Class A-___ Subaccount, (A) first, the related
Priority Interest Amount for such Distribution Date, and (B) second,
any related Carryover Interest Amount for such Distribution Date,
allocated first to pay all interest accrued and unpaid on overdue
Priority Interest Amounts and then to pay such overdue Priority
Interest Amounts;
(iii) Third, to the Class B-__ Subaccount, (A) first, the related
Priority Interest Amount for such Distribution Date, and (B) second,
any related Carryover Interest Amount for such Distribution Date,
allocated first to pay all interest accrued and unpaid on overdue
Priority Interest Amounts and then to pay such overdue Priority
Interest Amounts;
(iv) Fourth, to the Class B-___ Subaccount, (A) first, the related
Priority Interest Amount for such Distribution Date, and (B) second,
any related Carryover Interest Amount for such Distribution Date,
allocated first to pay all interest accrued and unpaid on overdue
Priority Interest Amounts and then to pay such overdue Priority
Interest Amounts;
(v) Fifth, concurrently, to each Senior Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Senior
Subaccounts, if any, for such Distribution Date, allocated among the
Senior Subaccounts pro rata based on their respective Subaccount
Principal Balances;
(vi) Sixth, to the Senior Subaccounts, (A) if the Class B
Cross-over Date has not yet occurred or if the Class B Principal
Distribution Tests are not met for such Distribution Date, the
Principal Distribution Amount, or (B) if the Class B Cross-over Date
has occurred and the Class B Principal Distribution Tests are met for
such
Exhibit 8 - Page 9
<PAGE> 110
Distribution Date, the Class A Percentage of the Principal Distribution
Amount, in either case allocated in the following sequential order:
(1) First, to the Class A-___ Subaccount in
reduction of the Subaccount Principal Balance of such
Subaccount, until it has been reduced to zero;
(2) Second, to the Class A-___ Subaccount
in reduction of the Subaccount Principal Balance of such
Subaccount, until it has been reduced to zero;
(3) Third, to the Class A-___ Subaccount in
reduction of the Subaccount Principal Balance of such
Subaccount, until it has been reduced to zero;
(4) Fourth, to the Class A-___ Subaccount
in reduction of the Subaccount Principal Balance of such
Subaccount, until it has been reduced to zero; and
(5) Fifth, to the Class A-___ Subaccount in
reduction of the Subaccount Principal Balance of such
Subaccount, until it has been reduced to zero;
provided, however, that on any Distribution Date on
which the Pool Scheduled Principal Balance is less than the
aggregate Subaccount Principal Balance of the Senior
Subaccounts immediately prior to such Distribution Date, the
Principal Distribution Amount or applicable percentage thereof
will be allocated among the Senior Subaccounts pro rata based
upon their respective Subaccount Principal Balances;
(vii) Seventh, to the Class A-___ Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class A-___ Subaccount,
if any, for such Distribution Date;
(viii) Eighth, to the Class A-___ Subaccount, (A) if the Class B
Cross-over Date has not yet occurred or if the Class B Distribution
Tests are not met for such Distribution Date, the Principal
Distribution Amount, or (B) if the Class B Cross-over Date has occurred
and the Class B Distribution Tests are met for such Distribution Date
the Class A Percentage of the Principal Distribution Amount (in the
case of (A) or (B), less the portion thereof, if any, distributable
pursuant to clause (vi) above on such Distribution Date);
(ix) Ninth, to the Class B-___ Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class B-___ Subaccount,
if any, for such Distribution Date;
(x) Tenth, to the Class B-___ Subaccount, (A) if the Class B
Cross-over Date has occurred and the Class B Principal Distribution
Tests are met for such Distribution Date, the Class B Percentage of the
Principal Distribution Amount; or (B) if the Class A Principal Balance
has been or is reduced to zero on or before such Distribution Date, the
entire Principal Distribution Amount (in the case of (A) or (B), less
the portion thereof, if any, distributable pursuant to clauses (vi) or
(viii) above);
(xi) Eleventh, to the Class B-___ Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class B-___ Subaccount,
if any, for such Distribution Date;
(xii) Twelfth, to the Class B-___ Subaccount, (A) if the Class B
Cross-over Date has occurred, the Class B Principal Distribution Tests
are met for such Distribution Date and the Class B-___ Subaccount
Principal Balance has been or is reduced to zero on or before such
Distribution Date, the Class B Percentage of the Principal Distribution
Amount or (B) if the Class A Principal Balance has been or is reduced
to zero on or before such Distribution Date and the Class B-___
Subaccount Principal Balance has been or is reduced to zero on or
before such Distribution Date, the entire Principal Distribution Amount
(in the case of (A) or (B), less the portion thereof, if any,
distributable pursuant to clauses (vi), (viii) or (x) above);
(xiii) Thirteenth, to each Subaccount, (i) first, its Carryover
Non-Priority Interest Amount for such Distribution Date and (ii)
second, its Non-Priority Interest Amount for such Distribution Date, in
each case with
Exhibit 8 - Page 10
<PAGE> 111
the Available Distribution Amount being allocated among the Subaccounts
pro rata based upon their respective Subaccount Principal Balances;
provided, however, that the aggregate amount allocated pursuant to this
clause (xiii) shall not exceed the amounts deposited to the Class A-___
Liquidity Account and the Class B-___ Liquidity Account pursuant to
clause (xiii) of Section 5(b) hereof;
(xiv) Fourteenth, if ___ is the Master Servicer, to the Master
Servicer in the following sequential order: (A) the Servicing Fee with
respect to such Distribution Date; and (B) any Servicing Fees from
previous Distribution Dates remaining unpaid;
(xv) Fifteenth, to each Subaccount, (i) first, to the extent not
allocated pursuant to clause (xiii) of this Section 5(a), its Carryover
Non-Priority Interest Amount for such Distribution Date and (ii)
second, to the extent not allocated pursuant to clause (xiii) of this
Section 5(a), its Non-Priority Interest Amount for such Distribution
Date, in each case with the Available Distribution Amount being
allocated among the Subaccounts pro rata based upon their respective
Subaccount Balances; and
(xvi) Sixteenth, any remainder to Holders of the Pooling REMIC
Residual Interest.
(b) On each Distribution Date, after all Subaccount allocations
have been made as described in Section 5(a) above, the Trustee (or the Paying
Agent on behalf of the Trustee) shall withdraw all amounts allocated to the
various Subaccounts, and shall distribute such amounts in the following manner
and in the following order of priority:
(i) First, concurrently, to each Class of Senior Certificates, (A)
first, its Interest Distribution Amount for such Distribution Date,
with the Available Distribution Amount being allocated among such
Classes pro rata based on their respective Interest Distribution
Amounts, and (B) second, the related Carryover Interest Amount, if any,
for such Distribution Date allocated first to pay all interest accrued
and unpaid on overdue Interest Distribution Amounts and then to pay
such overdue Interest Distribution Amounts, in each case with the
Available Distribution Amount being allocated among the Classes of
Senior Certificates pro rata based on their respective Carryover
Interest Amounts;
(ii) Second, to the Class A-___ Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Amount for such Distribution
Date, allocated first to pay all interest accrued and unpaid on overdue
Interest Distribution Amounts and then to pay such overdue Interest
Distribution Amounts;
(iii) Third, to the Class B-___ Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Interest Amount for such Distribution
Date, allocated first to pay all interest accrued and unpaid on overdue
Interest Distribution Amounts and then to pay such overdue Interest
Distribution Amounts;
(iv) Fourth, to the Class B-___ Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date and (B)
second, any related Carryover Interest Amount for such Distribution
Date, allocated first to pay all interest accrued and unpaid on overdue
Interest Distribution Amounts and then to pay such overdue Interest
Distribution Amounts;
(v) Fifth, concurrently, to each Class of Senior Certificates, the
related Principal Distribution Shortfall Carryover Amount for the
Senior Certificates, if any, for such Distribution Date, allocated
among the Senior Certificates pro rata based on their respective
Certificate Principal Balances;
(vi) Sixth, to the Senior Certificates, (A) if the Class B
Cross-over Date has not yet occurred or if the Class B Principal
Distribution Tests are not met for such Distribution Date, the
Principal Distribution Amount, or (B) if the Class B Cross-over Date
has occurred and the Class B Principal Distribution Tests are met for
such Distribution Date, the Class A Percentage of the Principal
Distribution Amount, in either case allocated in the following
sequential order:
Exhibit 8 - Page 11
<PAGE> 112
(1) First, to the Class A-___ Certificates
in reduction of the Certificate Principal Balance of such
Class, until it has been reduced to zero;
(2) Second, to the Class A-___ Certificates
in reduction of the Certificate Principal Balance of such
Class, until it has been reduced to zero;
(3) Third, to the Class A-___ Certificates
in reduction of the Certificate Principal Balance of such
Class, until it has been reduced to zero;
(4) Fourth, to the Class A-___ Certificates
in reduction of the Certificate Principal Balance of such
Class, until it has been reduced to zero; and
(5) Fifth, to the Class A-___ Certificates
in reduction of the Certificate Principal Balance of such
Class, until it has been reduced to zero;
provided, however, that on any Distribution Date on
which the Pool Scheduled Principal Balance is less than the
aggregate Certificate Principal Balance of the Senior
Certificates, immediately prior to such Distribution Date, the
Principal Distribution Amount or applicable percentage thereof
will be allocated among the Senior Certificates pro rata based
upon their respective Certificate Principal Balances;
(vii) Seventh, to the Class A-___ Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class A-___
Certificates, if any, for such Distribution Date;
(viii) Eighth, to the Class A-___ Certificates, (A) if the Class B
Cross-over Date has not yet occurred or if the Class B Distribution
Tests are not met for such Distribution Date, the Principal
Distribution Amount, or (B) if the Class B Cross-over Date has occurred
and the Class B Distribution Tests are met for such Distribution Date,
the Class A Percentage of the Principal Distribution Amount (in the
case of (A) or (B), less the portion thereof, if any, distributable
pursuant to clause (vi) on such Distribution Date);
(ix) Ninth, to the Class B-___ Certificates, the related Principal
Distribution Shortfall Carryover Amount for the Class B-___
Certificates, if any, for such Distribution Date;
(x) Tenth, to the Class B-___ Certificates, (A) if the Class B
Cross-over Date has occurred and the Class B Principal Distribution
Tests are met for such Distribution Date, the Class B Percentage of the
Principal Distribution Amount; or (B) if the Class A Principal Balance
has been or is reduced to zero on or before such Distribution Date, the
entire Principal Distribution Amount (in the case of (A) or (B), less
the portion thereof, if any, distributable pursuant to clauses (vi) or
(viii) above on such Distribution Date);
(xi) Eleventh, to the Class B-___ Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class B-___
Certificates, if any, for such Distribution Date;
(xii) Twelfth, to the Class B-___ Certificates, (A) if the Class B
Cross-over Date has occurred, the Class B Principal Distribution Tests
are met for such Distribution Date and the Class B-___ Principal
Balance has been or is reduced to zero on or before such Distribution
Date, the Class B Percentage of the Principal Distribution Amount or
(B) if the Class A Principal Balance has been or is reduced to zero on
or before such Distribution Date and the Class B-___ Principal Balance
has been or is reduced to zero on or before such Distribution Date, the
entire Principal Distribution Amount (in the case of (A) or (B), less
the portion thereof, if any, distributable pursuant to clauses (vi),
(viii) or (x) above);
(xiii) Thirteenth, to the Class A-___ Liquidity Account and the Class
B-__ Liquidity Account in the following sequential order:
Exhibit 8 - Page 12
<PAGE> 113
(1) to the Class A-___ Liquidity Account until
the amount on deposit therein equals the Class A-___ Liquidity
Account Required Amount; and
(2) to the Class B-___ Liquidity Account until
the amount on deposit therein equals the Class B-___ Liquidity
Account Required Amount;
(xiv) Fourteenth, to the Class X Certificates in the following
sequential order:
(A) the current Class X Strip Amount; and
(B) any Class X Carryover Strip Amount; and
(xv) Finally, any remainder to the holders of the Issuing REMIC
Residual Interest.
(c) All distributions or allocations made with respect to each
Class on each Distribution Date shall be allocated pro rata among the
outstanding Certificates of such Class based on their respective Percentage
Interests. So long as the Book-Entry Certificates are registered in the name of
a Clearing Agency or its nominee, the Trustee shall make all distributions or
allocations on such Certificates by wire transfers of immediately available
funds to the Clearing Agency or its nominee. In the case of Certificates issued
in fully-registered, certificated form, payment shall be made either (i) by
check mailed to the address of each Certificateholder as it appears in the
Certificate Register on the Record Date immediately prior to such Distribution
Date or (ii) by wire transfer of immediately available funds to the account of a
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the Trustee in writing at least five Business Days
prior to the Record Date immediately prior to such Distribution Date and such
Holder is (A) with respect to any Class A or Class B Certificates issued after
the Closing Date in certificated, fully-registered form, the registered owner of
Class A or Class B Certificates with an aggregate initial Certificate Principal
Balance of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its standard wire transfer
fee for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms.
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any Distribution
Date after all distributions required to be made by this Pooling and Servicing
Agreement have been made, and any amounts remaining in the Issuing REMIC after
payment in full of the Regular Interests therein and any administrative expenses
associated with the Trust, will be distributed to the Holders of the Issuing
REMIC Residual Interest.
SECTION 6. CLASS A-___ LIQUIDITY ACCOUNT AND CLASS B-___ LIQUIDITY
ACCOUNT.
(a)(1) A Class A-___ Liquidity Account is hereby established
as part of the Trust Estate. The Class A-___ Liquidity Account shall be an asset
of the Issuing REMIC. The Trustee shall hold the Class A-___ Liquidity Account
and maintain its status at all times as an Eligible Account. The account for the
Class A-___ Liquidity Account shall be in the name of the Trustee, or shall be
designated in a manner that reflects that all funds in such account are held in
trust for the benefit of the Trustee. The Trustee shall invest all amounts on
deposit in the Class A-___ Liquidity Account in Eligible Investments as directed
in writing by the holders of a majority in interest (by Percentage Interest) of
the Issuing REMIC Residual Interest. All net income and gain if any, from such
investments shall become funds available in the Class A-___ Liquidity Account.
All loss, if any, from such investments shall become a charge to the Class A-___
Liquidity Account.
Exhibit 8 - Page 13
<PAGE> 114
(2) On each Distribution Date, after the amounts allocated to the
various Subaccounts have been allocated in accordance with Section 5(b) hereof,
the Trustee shall, in accordance with the related Remittance Report, withdraw
from the Class A-___ Liquidity Account the amount of the Class A-___ Liquidity
Account Draw Amount, if any, for such Distribution Date. Such Class A-___
Liquidity Account Draw Amount, if any, will be applied on the Class A-___
Certificates in accordance with clause (ii) under Section 5(b) hereof.
(3) If, after the disbursement of the related Class A-___
Liquidity Account Draw Amount, if any, in accordance with Section 6(a)(2) above
on any Distribution Date other than the final Distribution Date, the amount on
deposit in the Class A-___ Liquidity Account exceeds the Class A-___ Liquidity
Account Required Amount, the amount of such excess shall be withdrawn and
distributed first to the Class B-___ Liquidity Account, until the amount on
deposit therein equals the Class B-___ Liquidity Account Required Amount,
second, to the holders of the Class X Certificates in reduction of any unpaid
Class X Strip Amounts (such amounts to be distributed first in reduction of the
Class X Strip Amount for such Distribution Date, to the extent not previously
distributed, and next in reduction of any Class X Carryover Strip Amount for
such Distribution Date, to the extent not previously distributed), and then to
the holders of the Issuing REMIC Residual Interest.
(4) On the final Distribution Date, after the disbursement of the
Class A-___ Liquidity Account Draw Amount, if any, in accordance with Section
6(a)(2) above, the amount, if any, on deposit in the Class A-___ Liquidity
Account will be withdrawn by the Trustee and distributed in the following order
of priority: (i) first, in reduction of any remaining Certificate Principal
Balance of the Class A-___ Certificates to zero; (ii) next, in reduction of any
remaining Certificate Principal Balance of the Class B-___ Certificates to zero;
(iii) next, to the Class B-___ Certificates in reduction of any remaining
Certificate Principal Balance of the Class B-___ Certificates to zero; (iv)
next, to the holders of the Class X Certificates in reduction of any unpaid
Class X Strip Amounts (such amounts to be distributed first in reduction of the
Class X Strip Amount for such Distribution Date, to the extent not previously
distributed, and next in reduction of any Class X Carryover Strip Amount for
such Distribution Date, to the extent not previously distributed); and (v)
finally, to the holders of the Issuing REMIC Residual Interest, whereupon the
Class A-___ Liquidity Account shall be terminated.
(b)(1) The Class B-___ Liquidity Account is hereby established as
part of the Trust Estate. The Class B-___ Liquidity Account shall be an asset of
the Issuing REMIC. The Trustee shall hold the Class B-___ Liquidity Account and
maintain its status at all times as an Eligible Account. The account for the
Class B-___ Liquidity Account shall be in the name of the Trustee, or shall be
designated in a manner that reflects that all funds in such accounts are held in
trust for the benefit of the Trustee. The Trustee shall invest all amounts on
deposit in the Class B-___ Liquidity Account in Eligible Investments as directed
in writing by the holders of a majority in interest (by Percentage Interest) of
the Issuing REMIC Residual Interest. All net income and gain, if any, from such
investments shall become funds available in the Class B-___ Liquidity Account.
All loss, if any, from such investments shall become a charge to the Class B-___
Liquidity Account.
(2) On each Distribution Date, after the amounts allocated to the
various Subaccounts have been allocated in accordance with Section 5(b) hereof,
the Trustee shall, in accordance with the related Remittance Report, withdraw
from the Class B-___ Liquidity Account the amount of the Class B-___ Liquidity
Account Draw Amount, if any, for such Distribution Date. Such Class B-___
Liquidity Account Draw Amount, if any, will be applied on the Class B-___
Certificates in accordance with clause (iii) under Section 5(b) hereof.
(3) If, after the disbursement of the related Class B-___
Liquidity Account Draw Amount in accordance with Sections 6(b)(2) above on any
Distribution Date other than the final Distribution Date, the amount on deposit
in the Class B-___ Liquidity Account exceeds the Class B-___ Liquidity Account
Required Amount, the amount of such excess shall be withdrawn and distributed
first, to the holders of the Class X Certificates in reduction of any unpaid
Class X Strip Amounts (such amounts to be distributed first in reduction of the
Class X Strip Amount for such Distribution Date, to the extent not previously
distributed, and next in reduction of any Class X Carryover Strip Amount for
such Distribution Date, to the extent not previously distributed), and then to
the holders of the Issuing REMIC Residual Interest.
(4) On the final Distribution Date, after the disbursement of the
Class B-___ Liquidity Account Draw Amount in accordance with Sections 6(b)(2)
above, the amount, if any, on deposit in the Class B-___ Liquidity Account will
be
Exhibit 8 - Page 14
<PAGE> 115
withdrawn by the Trustee and distributed in the following order of priority: (i)
first, in reduction of any remaining Certificate Principal Balance of the Class
B-___ Certificates to zero; (ii) next, in reduction of any remaining Certificate
Principal Balance of the Class B-___ Certificates to zero, (iii) next, to the
holders of the Class X Certificates in reduction of any unpaid Class X Strip
Amounts (such amounts to be distributed first in reduction of the Class X Strip
Amount for such Distribution Date, to the extent not previously distributed, and
next in reduction of any Class X Carryover Strip Amount for such Distribution
Date, to the extent not previously distributed); and (iv) finally, to the
holders of the Issuing REMIC Residual Interest, whereupon the Class B-___
Liquidity Account shall be terminated.
SECTION 7. REMITTANCE REPORTS.
(a) The Remittance Report for each Distribution Date shall
identify the following items, in addition to the items specified in Section 4.01
of the Standard Terms:
(1) the Interest Distribution Amount for each Class of the
Certificates for such Distribution Date (which shall equal the Priority
Interest Amount for the Corresponding Subaccount) and the Carryover
Interest Amount, for each Class of the Certificates for such
Distribution Date, and the amount of interest of each such category to
be distributed on each such Class based upon the Available Distribution
Amount for such Distribution Date;
(2) the amount to be distributed on such Distribution Date on each
Class of the Certificates to be applied to reduce the Certificate
Principal Balance of such Class (which will be equal to the amount to
be allocated on such Distribution Date on the Corresponding Subaccount
to be applied to reduce the Subaccount Principal Balance of such
Subaccount), separately identifying any portion of such amount
attributable to any prepayments, and the amount to be distributed to
reduce the Principal Distribution Shortfall Carryover Amount on each
such Class based upon the Available Distribution Amount for such
Distribution Date;
(3) the aggregate amount, if any, to be distributed on the
Residual Certificates;
(4) (a) the Class A-___ Liquidity Account Required Amount and the
Class B-___ Liquidity Account Required Amount both immediately before
and after the Distribution Date, (b) the amount of any Class A-___
Liquidity Account Draw Amount and any Class B-___ Liquidity Account
Draw Amount for such Distribution Date, (c) the amount to be deposited
into the Class A-___ Liquidity Account and the Class B-___ Liquidity
Account pursuant to clause (xiii) under Section 5(b) above, and (d) the
amount on deposit in the Class A-___ Liquidity Account and the Class
B-___ Liquidity Account both immediately before and immediately after
the Distribution Date;
(5) the Certificate Principal Balance of each Class of the
Certificates (which will be equal to the Subaccount Principal Balance
of the Corresponding Subaccount) and the Certificate Principal Balance
of each Class of the Offered Subordinated Certificates (which will be
equal to the Subaccount Principal Balance of the Corresponding
Subaccount) after giving effect to the distributions to be made on such
Distribution Date;
(6) the aggregate Interest Distribution Amount remaining unpaid,
if any, and the aggregate Carryover Interest Amount remaining unpaid,
if any, for each Class of Certificates (which will be equal to the
Priority Interest Amount and Carryover Interest Amount remaining unpaid
on the Corresponding Subaccount), after giving effect to all
distributions to be made on such Distribution Date;
(7) the aggregate Principal Distribution Shortfall Carryover
Amount remaining unpaid, if any, for each Class of Certificates, after
giving effect to the distributions to be made on such Distribution
Date.
In the case of information furnished pursuant to clauses (1), (2) and
(3) above, the amounts shall be expressed, with respect to any Class A or Class
B Certificate, as a dollar amount per $1,000 denomination.
(b) In addition to mailing a copy of the related Remittance Report
to each Certificateholder on each Distribution Date in accordance with Section
4.01 of the Standard Terms, on each Distribution Date, the Trustee shall mail a
copy of the related Remittance Report to each Underwriter (to the attention of
the person, if any, reported to the Trustee by the applicable Underwriter), to
the Seller and to The Bloomberg (to the address and to the person, if any
Exhibit 8 - Page 15
<PAGE> 116
specified to the Trustee by ______________________________________). The Trustee
shall not be obligated to mail any Remittance Report to The Bloomberg unless and
until _____________ _______________________ shall have notified the Trustee in
writing of the name and address to which such reports are to be mailed, which
notice, once delivered, will be effective for all Distribution Dates after the
date such notice is received by the Trustee unless and until superseded by a
subsequent notice.
SECTION 8. LIMITED RIGHT OF MASTER SERVICER TO RETAIN SERVICING FEES FROM
COLLECTIONS.
The Master Servicer may retain its Servicing Fee and any other
servicing compensation provided for herein and in the Standard Terms from gross
interest collections on the Assets prior to depositing such collections into the
Certificate Account; provided, however, that ___ as Master Servicer may only so
retain its Servicing Fee in respect of a Distribution Date from gross interest
collections on the Assets to the extent that the amounts on deposit in the
Certificate Account and attributable to the Available Distribution Amount for
such Distribution Date exceed the sum of all amounts to be allocated and
distributed on such Distribution Date pursuant to clauses (i) through (xiii)
under Section 5(b) hereof.
SECTION 9. REMIC ADMINISTRATION.
(a) For purposes of the REMIC Provisions, all of the Certificates
(except the Residual Certificates) will be designated as the "regular interests"
in the Issuing REMIC, the ________ Subaccounts will be designated as the
"regular interests" in the Pooling REMIC, the Class R Certificates will be
designated as the "residual interest" in each of the Issuing REMIC and the
Pooling REMIC and, following the division of the Class R Certificates into two
separately transferable, certificated and fully registered certificates in
accordance with Section 9(b) below, the Class R-1 Certificates will be
designated as the "residual interest" in the Issuing REMIC and the Class R-2
Certificates will be designated as the "residual interest" in the Pooling REMIC.
(b) Upon the request of any registered Holder of a Class R
Certificate, the Trustee shall issue to such Holder two separately transferable,
certificated and fully registered Certificates (a Class R-1 Certificate and a
Class R-2 Certificate), in substantially the forms of Exhibit R-1 and Exhibit
R-2 attached hereto. In the event that the Class R Certificates are exchanged
for separately transferable Class R-1 and Class R-2 Certificates: (1) the Class
R-1 Certificates will be designated as the residual interest in the Issuing
REMIC, (2) the Class R-2 Certificates will be designated as the residual
interest in the Pooling REMIC, (3) the Holders of a majority of the Percentage
Interest in the Class R-1 Certificates together with the Holders of a majority
of the Percentage Interest in the Class R-2 Certificates will have the option to
make a Terminating Purchase given to the Holders of a majority of the Percentage
Interest in the Residual Certificates pursuant to Section 9.01 of the Standard
Terms, and (4) the restrictions on the transfer of a Residual Certificate
provided in the Standard Terms will apply to both the Class R-1 and the Class
R-2 Certificates.
SECTION 10. AUCTION CALL.
(a) If neither the Master Servicer nor the Residual Majority
exercises its optional termination right as described in Section 9.01 of the
Standard Terms within 90 days after it first becomes entitled to do so, the
Trustee shall use commercially reasonable efforts to solicit bids for the
purchase of all Assets and REO Properties remaining in the Trust from no fewer
than two prospective purchasers that it believes to be Qualified Bidders. If ___
is then the Master Servicer of the Assets, the solicitation of bids shall be
conditioned upon the continuation of ___ as the servicer of the Assets on terms
and conditions substantially similar to those in the Pooling and Servicing
Agreement, except that it shall not be required to pay compensating interest or
make Advances.
(b) If the Trustee receives bids from at least two Qualified
Bidders and the net proceeds of the highest bid are equal to or greater than the
Termination Price, the Trustee shall promptly advise the Master Servicer of the
highest bid and the terms of purchase, and the Master Servicer shall have three
Business Days, at its option, to match the terms of such bid. The Trustee shall
thereafter sell the Assets and REO Properties either (i) to the Master Servicer,
if it shall so elect, or (ii) to the highest bidder, and in either case the
Trustee shall distribute the net proceeds of such sale in redemption of the
Certificates in compliance with Article IX of the Standard Terms and Section 5
hereof. Any such sale must also comply with the requirements applicable to a
Terminating Purchase set forth in Section 9.02 of the Standard Terms.
Exhibit 8 - Page 16
<PAGE> 117
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets
and REO Properties in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two
Qualified Bidders, or does not receive a bid such that the net proceeds
therefrom would at least equal the Termination Price, it shall not sell the
Assets and REO Properties, and shall thereafter have no obligation to attempt to
sell same.
(e) The Master Servicer shall cooperate with and provide necessary
information to the Trustee in connection with any auction sale as described
herein.
SECTION 11. VOTING RIGHTS.
The Voting Rights applicable to the Certificates shall be allocated
0.5% to the Class R Certificates, 0.5% to the Class X Certificates and 99% to
the other Certificates in proportion with their respective Certificate Principal
Balance.
SECTION 12. GOVERNING LAW.
The Pooling and Servicing Agreement shall be construed in accordance
with and governed by the laws of the State of North Carolina applicable to
agreements made and to be performed therein. The parties hereto agree to submit
to the personal jurisdiction of all federal and state courts sitting in the
State of North Carolina and hereby irrevocably waive any objection to such
jurisdiction. In addition, the parties hereto hereby irrevocably waive any
objection that they may have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any federal or state
court sitting in the State of North Carolina, and further irrevocably waive any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
SECTION 13. FORMS OF CERTIFICATES.
Each of the Schedules and Exhibits attached hereto or referenced herein
are incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
SECTION 14. COUNTERPARTS.
This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 15. ENTIRE AGREEMENT.
This Pooling and Servicing Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
Exhibit 8 - Page 17
<PAGE> 118
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused this Pooling and Servicing Agreement to be duly executed by their
respective officers thereunto duly authorized and their respective signatures
duly attested all as of the day and year first above written.
UNION PLANTERS MORTGAGE FINANCE CORP.
By:_________________________________________
Name:
Title:
[_____________________]
By:
Name:
Title:
[ ],
AS TRUSTEE
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Exhibit 8 - Page 18
<PAGE> 119
STATE OF __________________ )
) s.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me in the County of
__________ this ____ day of _____________, 19_____ by ______________,
_________________ of Union Planters Mortgage Finance Corp., a Delaware
corporation, on behalf of the corporation.
___________________________________
Notary Public
My Commission expires: ___________, ____
STATE OF _______________ )
) s.
COUNTY OF _______ )
The foregoing instrument was acknowledged before me in the County of
__________ this ____ day of ____________, 19____ by ________________,
_________________ of _____________, a _________________ corporation, on behalf
of the corporation.
___________________________________
Notary Public
My Commission expires: ___________, ____
STATE OF ____________________ )
) s.
CITY OF ____________ )
The foregoing instrument was acknowledged before me in the City of
____________, this ____ day of ________, 19__, by __________________,
________________ of ______________________________, a national banking
association, on behalf of the association.
___________________________________
Notary Public
My Commission expires: _____________, ____
Exhibit 8 - Page 19
<PAGE> 120
EXHIBIT 9
UNION PLANTERS
MORTGAGE LOAN COLLECTION AND LOSS MITIGATION PROCEDURES
- - The Collections call center operates with a Unix based Melita call
distribution system in tandem with the Alltel CPI MSP system platform.
- - Past due mortgages are tracked utilizing the CPI system through the use
of work "queues". These queues are downloaded into the dialer for
automated dialing. Delinquencies are categorized by aging and campaigns
are devised daily. (Example: collectors work the "less than 30 day"
accounts on the 17th through the 20th days of the month in accordance
with investor requirements.
- - Loans are normally considered late on the 15th day after the due date.
Late fees are assessed after payment processing on the 16th day unless
the terms of the security instruments provide alternate terms. In those
instances, the loans are modified at the loan level. Additionally,
notices are forwarded to borrowers who are contractually current with
outstanding late fees due and payable.
- - Contact with the borrowers via telephone begins when required by the
investor. Many investors, such as FNMA, require telephone contact on
new loan delinquencies begin on or around the 10th day of delinquency.
Generally, first contact is required between the 17th and 20th days of
delinquency. The Melita and CPI systems provide "queues" that can be
accessed by the team according to the daily campaign strategy.
- - All collection activity is documented on the collections workstation
for review. Most comments are coded to facilitate investor reporting
via EDI transmission. Loans are not systematically presented for
collection activity for 25 days after noting productive comments.
Payment arrangements are excluded from the call center downloads until
the arrangement is broken.
- - First contacts are critical. Loss mitigation efforts and repayment
plans are most effective when established early in the default.
Collectors are required to obtain a full financial disclosure on the
first contact with the delinquent borrower without regard to the age of
the delinquency. The first contact also involves a complete discussion
of the borrower's intent, as well as current programs and options
available.
- - All delinquent borrowers are solicited for interest in loss mitigation
programs on the 35th day of delinquency via letter.
- - On the 33rd day of delinquency, a demand letter is generated for each
loan product type, formally demanding full reinstatement within thirty
days of the date of the letter. HUD borrowers receive an additional
pamphlet outlining alternatives to foreclosure.
- - Between the 45th and 60th day of delinquency, field representatives are
dispatched to visit the properties and report the condition. Vacant
properties are secured and preventive maintenance is completed where
required. (i.e. grass cut, winterization)
- - All notices, certified cards and required documentation is compiled
into a file folder and given to the foreclosure review committee for
approval.
- - The foreclosure review committee, consisting of supervisors from the
loss mitigation, collections and foreclosure areas, meets as often as
is necessary to complete the loans ready for review. If accepted, the
loan is coded as such and loaded into the foreclosure workstation. If
rejected, the loan is coded as such and returned to the collections
department to correct the reasons for the rejection. Once complete, the
file is returned to the review committee for approval.
Exhibit 9 - Page 1
<PAGE> 121
- - The foreclosure referral department receives the approved files, orders
the original documents and activates the foreclosure workstation,
assigning the appropriate template for processing. The template then
becomes a tracking checklist for the foreclosure specialist to follow
complete with target dates for completion within regulatory guidelines.
- - When the required information is received, the package is referred to
an attorney located in the state or district of the mortgaged property.
- - Efforts related to ensuring that all attempts to mitigate or control
losses associated with defaulted mortgages are administered by the Loss
Mitigation Department.
- - Cases or referrals to the unit are typically generated through the
Collections call center, however referrals may also be accepted from
the Foreclosure or Bankruptcy units.
- - The active cases are monitored using the ALLTEL Loss Mitigation
Workstation. The workstation allows the user to monitor the significant
events associated with the applicable loss mitigation effort using an
"alternative" specific template that has been designed to act as a
checklist for monitoring the progress of the case.
- - The unit is responsible for ensuring that all cases are processed
within the applicable investor, agency or regulatory guidelines. The
unit also participates in the foreclosure review committee to determine
that adequate consideration has been granted in cases subject to the
initiation of foreclosure.
Exhibit 9 - Page 2
<PAGE> 1
EXHIBIT 4.1(b)
UNION PLANTERS MORTGAGE FINANCE CORP.,
AS DEPOSITOR,
UNION PLANTERS BANK, N.A.,
AS MASTER SERVICER,
THE BANK OF NEW YORK, AS
TRUSTEE
AND
THE BANK OF NEW YORK, AS
CONTRACT OF INSURANCE HOLDER
---------
SERIES 1998-1 POOLING AND SERVICING AGREEMENT
DATED AS OF MAY 1, 1998
---------
UNION PLANTERS MORTGAGE FINANCE CORP.,
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-1
<PAGE> 2
THIS SERIES 1998-1 POOLING AND SERVICING AGREEMENT, dated as of May 1,
1998, is made with respect to the formation of UPMFC Trust 1998-1 (the "Trust")
among UNION PLANTERS MORTGAGE FINANCE CORP., a Delaware corporation (the
"Depositor"), UNION PLANTERS BANK, N.A., a national banking association (in its
capacity as master servicer, the "Master Servicer"), THE BANK OF NEW YORK, a New
York banking corporation, as trustee (the "Trustee"), and THE BANK OF NEW YORK,
a New York banking corporation, as contract of insurance holder (the "Contract
of Insurance Holder") under this Agreement and the Standard Terms to Pooling and
Servicing Agreement, May 1998 Edition (the "Standard Terms"), all the provisions
of which are incorporated herein as modified hereby and shall be a part of this
Agreement as if set forth herein in full (this Agreement, with the Standard
Terms so incorporated, the "Pooling and Servicing Agreement"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings given
them in the Standard Terms.
PRELIMINARY STATEMENT
The Depositor has duly authorized the formation of the Trust to issue a
Series of Certificates with an aggregate initial principal amount of
$380,958,124, to be known as the Mortgage Pass-Through Certificates, Series
1998-1 (the"Certificates"). The Certificates consist of 14 Classes that in the
aggregate evidence the entire beneficial ownership interest in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee
will make an election to treat all of the assets of the Trust as two real estate
mortgage investment conduits (each, a "REMIC" and, individually, the "Pooling
REMIC" and the "Issuing REMIC") for federal income tax purposes. The Pooling
REMIC will consist of the Distribution Account and the Assets listed on the
Asset Schedule attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the twelve Subaccounts designated as provided herein. The
"startup day" of each REMIC for purposes of the REMIC Provisions is the Closing
Date.
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
the Depositor hereby bargains, sells, conveys, assigns and transfers to the
Trustee, in trust and as provided in this Pooling and Servicing Agreement,
without recourse (except as provided herein) and for the exclusive benefit of
the Holders of the Certificates, all of the Depositor's right, title and
interest in and to, and any and all benefits accruing to the Depositor from, (a)
the Assets listed in Schedule I hereto, together with the related Asset
Documents, and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing, including, without limitation, all rights to
receive all principal and interest payments due on the Assets after the Cut-off
Date, including such scheduled payments received by the Depositor or Seller on
or prior to the Cut-off Date, and Principal
S-1
<PAGE> 3
Prepayments, Net Insurance Proceeds, Net Liquidation Proceeds, Repurchase Prices
and other unscheduled collections received on the Assets on and after the
Cut-off Date; (b) the security interests in the Mortgaged Properties granted by
the Obligors pursuant to the related Assets; (c) all funds relating to the
Assets on deposit in the Certificate Account or the Distribution Account for the
Certificates and all proceeds thereof, whether in the form of cash, instruments,
securities or other properties; (d) any and all rights, privileges and benefits
accruing to the Depositor under the Sales Agreement with respect to the Assets
(provided that the Depositor shall retain its rights to indemnification from the
Seller under such Sales Agreement, but also hereby conveys its rights to such
indemnification to the Trustee as its assignee), including the rights and
remedies with respect to the enforcement of any and all representations,
warranties and covenants under such Sales Agreement; and (e) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any Standard
Hazard Insurance Policy, VA Guaranty or FHA Insurance, or any other insurance
policy relating to any of the Assets, cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
rights to payment of any and every kind, and other forms of obligations and
receivables that at any time constitute all or part or are included in the
proceeds of any of the foregoing) to make distributions on the Certificates as
specified herein (the items referred to in clauses (a) through (e) above shall
be collectively referred to herein as the "Trust Estate").
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required 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 1. STANDARD TERMS; RESTATEMENT OF DECLARATION OF TRUST.
(a) The Depositor, the Master Servicer, the Trustee, and the Contract
of Insurance Holder each acknowledge that the Standard Terms prescribe certain
obligations of the Depositor, the Master Servicer, the Trustee, and the Contract
of Insurance Holder with respect to the Certificates. The Depositor, the Master
Servicer, the Trustee, and the Contract of Insurance Holder each agree to
observe and perform such prescribed duties, responsibilities and obligations,
and acknowledge that, except to the extent inconsistent with the provisions of
this Pooling and Servicing Agreement, the Standard Terms are and shall be a part
of this Pooling and Servicing Agreement to the same extent as if set forth
herein in full.
(b) This Agreement amends and restates the Declaration of Trust in all
respects. The Trustee will be acting not in its individual capacity but solely
as Trustee hereunder. The office of the Trust Fund will be in the care of the
Trustee at the Corporate Trust Office. The actions heretofore taken by the
Trustee under the authority of the Declaration of Trust are hereby ratified and
confirmed.
S-2
<PAGE> 4
SECTION 2. DEFINED TERMS.
With respect to the Certificates and in addition to or in replacement
for the definitions set forth in Section 1.01 of the Standard Terms, the
following definitions shall be assigned to the defined terms set forth below:
"Book-Entry Certificates": The Class A Certificates and Class X-1
Certificates.
"Carryover Interest Amount": With respect to each Class of Subaccounts,
Components, and Certificates and each Distribution Date, all amounts that were
distributable on such Class as Interest Distribution Amounts on previous
Distribution Dates that remain unpaid.
"Claims Administrator": Union Planters Bank, N.A., a national banking
association, or any successor thereof.
"Class A Certificates": The Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, and Class A-5
Certificates.
"Class A Subaccounts": Any or all, as appropriate, of the Class A-1,
Class A-2, Class A-3, Class A-4, or Class A-5 Subaccounts.
"Class B Certificates": The Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5
Certificates, and Class B-6 Certificates.
"Class B Subaccounts": Any or all, as appropriate, of the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5, or Class B-6 Subaccounts.
"Class R Certificates": The Class R Certificates, which represent
beneficial ownership of both the Pooling REMIC Residual Interest and the Issuing
REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-1 Certificates,
which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-2 Certificates,
which will represent the Pooling REMIC Residual Interest.
"Class X Certificates": The Class X-1 and Class X-2 Certificates, each
created pursuant to Section 3 hereof.
"Class X-2 Certificates": The Class X-2 Certificates created pursuant
to Section 3 hereof, which represent beneficial ownership of the Class X-2
Components.
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<PAGE> 5
"Class X-2 Components": The Class X-2-A1, X-2-A2, Class X-2-A3, Class
X-2-A4, Class X-2-A5, Class X-2-B1, Class X-2-B2, Class X-2-B3, Class X-2-B4,
Class X-2-B5, Class X-2-B6, and Class X-2-R Components, having the designations,
initial Component Notional Balances, Component Pass-Through Rates and Final
Scheduled Distribution Dates set forth below:
<TABLE>
<CAPTION>
FINAL
COMPONENT COMPONENT SCHEDULED
COMPONENT NOTIONAL PASS-THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(5)
- ----------- --------- ------------ ------------
<S> <C> <C> <C>
X-2-A1 Class A-1 Subaccount (1) June 15, 2028
Principal Balance
X-2-A2 Class A-2 Subaccount (2) June 15, 2028
Principal Balance
X-2-A3 Class A-3 Subaccount (3) June 15, 2028
Principal Balance
X-2-A4 Class A-4 Subaccount (4) June 15, 2028
Principal Balance
X-2-A5 Class A-5 Subaccount (5) June 15, 2028
Principal Balance
X-2-B1 Class B-1 Subaccount (6) June 15, 2028
Principal Balance
X-2-B2 Class B-2 Subaccount (6) June 15, 2028
Principal Balance
X-2-B3 Class B-3 Subaccount (6) June 15, 2028
Principal Balance
X-2-B4 Class B-4 Subaccount (6) June 15, 2028
Principal Balance
X-2-B5 Class B-5 Subaccount (6) June 15, 2028
Principal Balance
X-2-B6 Class B-6 Subaccount (6) June 15, 2028
Principal Balance
X-2-R Class R Subaccount (6) June 15, 2028
Principal Balance
</TABLE>
(1) The Pass-Through Rate for the Class X-2-A1 Component
shall equal the Pass-Through Rate on the Subaccounts less the sum of
(a) the Class X-1 Pass-Through Rate and (b) 6.350%.
(2) The Pass-Through Rate for the Class X-2-A2 Component
shall equal the Pass-Through Rate on the Subaccounts less the sum of
(a) the Class X-1 Pass-Through Rate and (b) 6.450%.
S-4
<PAGE> 6
(3) The Pass-Through Rate for the Class X-2-A3 Component
shall equal the Pass-Through Rate on the Subaccounts less the sum of
(a) the Class X-1 Pass-Through Rate and (b) 6.600%.
(4) The Pass-Through Rate for the Class X-2-A4 Component
shall equal the Pass-Through Rate on the Subaccounts less the sum of
(a) the Class X-1 Pass-Through Rate and (b) 6.800%.
(5) The Pass-Through Rate for the Class X-2-A5 Component
shall equal the Pass-Through Rate on the Subaccounts less the sum of
(a) the Class X-1 Pass-Through Rate and (b) 6.750%.
(6) The Pass-Through Rate for each of the Class X-2-B1,
Class X-2-B2, Class X-2-B3, Class X-2-B4, Class X-2-B5, Class X-2-B6,
and Class X-2-R Components shall equal the Pass-Through Rate on the
Subaccounts less the sum of (a) the Class X-1 Pass-Through Rate and (b)
6.950%.
"Class X-2 Component Interest Amount": With respect to any Distribution
Date, the aggregate amount of interest accrued on the Class X-2 Components on
their related Class X-2 Component Notional Balances.
"Closing Date": May 28, 1998.
"Contract of Insurance Holder": The Bank of New York, a New York
banking corporation, or any successor appointed as herein provided. Notices to
the Contract of Insurance Holder shall be sent to The Bank of New York, 101
Barclay Street, New York, New York 10286, Attn: UPMFC Trust 1998-1, or its
successor in interest.
"Corporate Trust Office": The address set forth hereinbelow under
"Trustee".
"Corresponding Certificates": For any Subaccount, the Class of
Certificates bearing the same letter and numerical designation as that borne by
such Subaccount.
"Corresponding Subaccount" For any Class of Certificates (other than
the Class X Certificates, for which there are no Corresponding Subaccounts), the
Subaccount bearing the same letter and numerical designation as that borne by
such Class.
"Credit Support Depletion Date": The first Distribution Date on which
the Certificate Principal Balances of each Class of the Class B Certificates
equals zero.
"Cut-off Date": May 1, 1998.
"Declaration of Trust": The declaration of trust, dated May 28, 1998,
by and between The Bank of New York, as settlor, and The Bank of New York, as
trustee, which established the Trust Fund.
S-5
<PAGE> 7
"Determination Date": With respect to any Distribution Date, the 15th
calendar day of the month in which such Distribution Date occurs or, if such day
is not a Business Day, the immediately succeeding Business Day.
"Due Date": With respect to any Distribution Date, the first calendar
day of the month in which such Distribution Date occurs.
"ERISA Restricted Certificates": The Class B, Class X-2, and Class R
Certificates.
"Interest Accrual Period": With respect to each Distribution Date and
with respect to the Class X-1 Certificates and the Class X-2 Certificates, the
calendar month preceding the month in which the Distribution Date occurs.
Interest on the Class X-1 Certificates and the Class X-2 Certificates will be
computed on the basis of a 360-day year consisting of twelve 30- day months. The
Interest Accrual Period with respect to all other Classes of Certificates will
be as provided in the Standard Terms.
"Interest Distribution Amount": For any Class of Subaccounts, any Class
of Components, and any Class of Certificates other than the Class X-2
Certificates on any Distribution Date, interest accrued on such Class during the
related Interest Accrual Period at the applicable Pass-Through Rate on the
related Subaccount Principal Balance, Component Notional Balance, Certificate
Principal Balance or Notional Principal Amount, as the case may be, less Net
Interest Shortfalls. With respect to the Class X-2 Certificates on any
Distribution Date, the Class X-2 Component Interest Amount less Net Interest
Shortfalls.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts.
"Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.
"Net Interest Shortfalls": With respect to each Distribution Date, the
sum of (i) Soldiers' and Sailors' Shortfalls and (ii) Due Date Interest
Shortfalls, less Compensating Interest, each for the related Collection Period.
"Notional Principal Amount": The Notional Principal Amount of the Class
X-1 Certificates on any date shall equal the sum of all of the Subaccount
Principal Balances on such date. The Notional Principal Amount of the Class X-2
Certificates on any date shall equal the sum of the Component Notional Balances
for each Class of Components.
"Pass-Through Rate": With respect to each Class of Certificates (other
than the Class X-2 Certificates), on any Distribution Date, the per annum rate
for such Class set forth in the table in Section 3 hereof. With respect to any
Subaccount on any Distribution Date, the then applicable Weighted Average Net
Asset Rate.
"Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.
S-6
<PAGE> 8
"Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Amount": The sum of the Senior Principal
Distribution Amount and the Subordinate Principal Distribution Amount.
"Private Certificates": The Class B, Class X-2 and Residual
Certificates.
"Pro Rata Portion": With respect to any Distribution Date and Class of
Subordinate Certificates, the amount equal to the fraction, the numerator of
which is such Class' Class Certificate Principal Balance immediately prior to
such Distribution Date and the denominator of which is the aggregate of the
Class Certificate Balances of the Class B Certificates immediately prior to such
Distribution Date.
"Rating Agency": Each of Duff & Phelps Credit Rating Co., 17 State
Street, 12th Floor, New York, New York 10004, and Moody's Investors Service,
Inc., 99 Church Street, New York, New York 10007.
"Realized Loss": (a) With respect to each Mortgage Loan for which a
Default has occurred and a Foreclosure Advance has been made, the excess, if
any, of the aggregate of all Advances made with respect to such Mortgage Loan
over all recoveries, including recoveries in respect of the related FHA
Insurance or VA Guaranty, as applicable, made in respect of such Mortgage Loan,
(b) with respect to any Liquidated Loan, (1) the Unpaid Principal Balance of the
Liquidated Loan, plus accrued and unpaid interest on such Liquidated Loan, plus
amounts reimbursable to the Master Servicer for previously unreimbursed
Advances, minus (2) Net Liquidation Proceeds collected in respect of the
Liquidated Loan, and (c) the excess, if any, of (1) the aggregate Certificate
Principal Balance of the Class A, Class R and Class B Certificates after giving
effect to distributions of principal on such Distribution Date over (2) the
aggregate Scheduled Principal Balance of the Mortgage Loans at the end of the
related Due Period.
"Regular Certificates": The Class A Certificates, Class B Certificates,
and Class X Certificates.
"Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 9(b)
hereof, the Class R-1 Certificates and Class R-2 Certificates.
"Rule 144A Certificates": The Class B Certificates, Class X-2
Certificates and Residual Certificates.
"Scheduled Principal Balance": With respect to any Mortgage Loan as of
any Due Date, the principal balance thereof as of the Cut-off Date stated in the
related amortization schedule at the time relating thereto, after giving effect
to all principal due since the Cut-off Date to and including such Due Date less
any partial prepayments with respect to such Mortgage Loan prior to such Due
Date.
S-7
<PAGE> 9
"Senior Accelerated Distribution Percentage": For any Distribution Date
occurring prior to the Distribution Date in June 2003, 100%, and for any
Distribution Date on or after the June 2003 Distribution Date will be as
follows:
(i) for any Distribution Date from June 2003 through May
2004, the Senior Percentage for such Distribution Date plus 70% of the
Subordinate Percentage for such Distribution Date;
(ii) for any Distribution Date from June 2004 through May
2005, the Senior Percentage for such Distribution Date plus 60% of the
Subordinate Percentage for such Distribution Date;
(iii) for any Distribution Date from June 2005 through May
2006, the Senior Percentage for such Distribution Date plus 40% of the
Subordinate Percentage for such Distribution Date;
(iv) for any Distribution Date from June 2006 through May
2007, the Senior Percentage for such Distribution Date plus 20% of the
Subordinate Percentage for such Distribution Date; and
(v) for any Distribution Date after May 2007, the Senior
Percentage for such Distribution Date;
provided, however, that on any Distribution Date on which the Senior Percentage
exceeds 97.25%, the Senior Accelerated Distribution Percentage for such
Distribution Date will equal 100%.
Any scheduled reduction to the Senior Accelerated Distribution
Percentage described above shall not be made as of any Distribution Date unless
(i) the average monthly percentage of Mortgage Loans delinquent 90 days or more
over the last six months (calculated as the arithmetic mean of the percentage
values for each of the preceding six months determined by dividing the aggregate
outstanding Scheduled Principal Balance of Mortgage Loans 90 days or more
delinquent in that month by the aggregate outstanding Certificate Principal
Balance of the Class B Certificates in that month, after giving effect to
distributions in such month) is less than 200%, and (ii) aggregate Realized
Losses on the Mortgage Loans to date for such Distribution Date, if occurring
during the sixth, seventh, eighth, ninth or tenth year (or any year thereafter)
after the Closing Date, are less than 15%, 20%, 25%, 30% or 35%, respectively,
of the sum of the initial Certificate Principal Balance of the Class B
Certificates. Notwithstanding the foregoing, upon reduction of the Certificate
Principal Balances of the Senior Certificates to zero, the Senior Accelerated
Distribution Percentage will equal 0%.
"Senior Certificates": The Class R, Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5 and Class X Certificates.
"Senior Percentage": On the initial Distribution Date, 97.25%, and
thereafter for each succeeding Distribution Date will be recalculated to equal
the percentage equal to the aggregate
S-8
<PAGE> 10
Certificate Principal Balance of the Senior Certificates (other than the Class X
Certificates) immediately prior to such Distribution Date divided by the
aggregate Scheduled Principal Balance of all of the Mortgage Loans immediately
prior to the first day of the related Due Period; subject to a cap of 100%.
"Senior Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (a) the balance of the Available Distribution
Amount remaining after the distribution of the Interest Distribution Amount
allocable to each Class of the Senior Certificates and (b) the sum of the
amounts described in clauses (i) through (ii) below.
(i) the product of (A) the then-applicable Senior Percentage and
(B) the sum of the principal portion of all Monthly Payments on the Mortgage
Loans due on the related Due Date, whether or not received on or prior to the
related Determination Date; plus
(ii) the product of (A) the then-applicable Senior Accelerated
Distribution Percentage and (B) all unscheduled payments or collections of
principal in respect of the Mortgage Loans received during the preceding
calendar month (including the principal portion of proceeds of the repurchase of
a Mortgage Loan, full and partial Mortgagor prepayments, Foreclosure Advances
and Net Liquidation Proceeds).
"Senior Subaccounts": The Class R, Class A-1, Class A-2, Class A-3,
Class A-4 and Class A-5 Subaccounts.
"Servicing Fee Rate": 1.00% per annum.
"Subaccount": Each of the following twelve subaccounts established
solely for purposes of the REMIC Provisions by the Trustee, which have the
Pass-Through Rates and initial Subaccount Principal Balances set forth below:
<TABLE>
<CAPTION>
INITIAL
PASS-THROUGH SUBACCOUNT
SUBACCOUNT RATE PRINCIPAL BALANCE
---------- ---- -----------------
<S> <C> <C>
A-1 (1) $198,644,000
A-2 (1) $ 19,915,000
A-3 (1) $ 66,363,000
A-4 (1) $ 66,347,000
A-5 (1) $ 19,160,000
B-1 (1) $ 1,904,000
B-2 (1) $ 952,000
B-3 (1) $ 952,000
B-4 (1) $ 1,904,000
B-5 (1) $ 1,904,000
B-6 (1) $ 2,913,024
R (1) $ 100
</TABLE>
(1) The Pass-Through Rate on each Subaccount for any
Distribution Date shall be equal to the Weighted Average Net Asset
Rate.
S-9
<PAGE> 11
The final scheduled Distribution Date for each Subaccount is the June,
2028 Distribution Date. For purposes of Treasury Regulation Section
1.860G-1(a)(4), the latest possible maturity date for each of the Subaccounts
shall be the June, 2028 Distribution Date.
"Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such Subaccount in the definition of "Subaccount" above,
minus all amounts allocated to such Subaccount in reduction of its Subaccount
Principal Balance pursuant to Sections 5(a) and 6 hereof.
"Subordinate Certificates": The Class B Certificates.
"Subordinate Percentage": 100% less the Senior Percentage.
"Subordinate Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (a) the balance of the Available Distribution
Amount remaining after the distribution of the Interest Distribution Amount
allocable to the Senior Certificates, the Senior Principal Distribution Amount
and the Interest Distribution Amount allocable to the Subordinate Certificates
and (b) the sum of the amounts described in clauses (i) through (ii) below:
(i) the product of (A) the then-applicable Subordinate Percentage and
(B) the principal portion of all Monthly Payments on the Mortgage Loans due on
the related Due Date, whether or not received on or prior to the related
Determination Date; plus
(ii) the portion of all unscheduled payments or collections of
principal in respect of the Mortgage Loans received during the preceding
calendar month (including the principal portion of proceeds of the repurchase of
a Mortgage Loan, full and partial Mortgagor prepayments, Foreclosure Advances
and Net Liquidation Proceeds) allocable to the Subordinate Certificates.
"Trustee": The Bank of New York, a New York banking corporation, not in
its individual capacity but solely as Trustee under this Pooling and Servicing
Agreement, or any successor trustee appointed as herein provided. Notices to the
Trustee shall be sent to Corporate Trust Department, 101 Barclay Street, New
York, New York 10286, Attn: UPMFC Trust 1998-1 (the "Corporate Trust Office"),
or its successor in interest.
"Trustee Fee Rate": 0.012% per annum.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
"Underwriter": Morgan Stanley & Co. Incorporated (whose address is 1585
Broadway, New York, New York 10036).
S-10
<PAGE> 12
"Weighted Average Net Asset Rate": With respect to any Distribution
Date, the weighted average of the Asset Rates applicable to the Monthly Payments
that were due during the related Collection Period on Mortgage Loans that were
Outstanding at the beginning of the related Prepayment Period, less the
Servicing Fee Rate and the Trustee Fee Rate.
SECTION 3. CERTIFICATES.
The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$380,958,124 except for Certificates executed and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Certificates pursuant to
Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued in
fourteen Classes having the designations, initial Certificate Principal
Balances, initial Notional Principal Amounts, Pass-Through Rates and Final
Scheduled Distribution Dates set forth or described below:
<TABLE>
<CAPTION>
INITIAL FINAL
CERTIFICATE SCHEDULED
PRINCIPAL PASS THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(5)
- ----------- ----------- ------------ ------------
<S> <C> <C> <C>
A-1 $198,644,000 6.350% June 15, 2028
A-2 $ 19,915,000 6.450% June 15, 2028
A-3 $ 66,363,000 6.600% June 15, 2028
A-4 $ 66,347,000 6.800% June 15, 2028
A-5 $ 19,160,000 6.750% June 15, 2028
B-1 $ 1,904,000 6.950% June 15, 2028
B-2 $ 952,000 6.950% June 15, 2028
B-3 $ 952,000 6.950% June 15, 2028
B-4 $ 1,904,000 6.950% June 15, 2028
B-5 $ 1,904,000 6.950% June 15, 2028
B-6 $ 2,913,024 6.950% June 15, 2028
X-1 (1) (2) June 15, 2028
X-2 (1) (3) June 15, 2028
R(4) $ 100 6.950% June 15, 2028
</TABLE>
(1) Each of the Class X-1 and Class X-2 Certificates
shall have no Certificate Principal Balance, and will bear interest
based on their Notional Principal Amount.
(2) The Pass-Through Rate for the Class X-1 Certificates
on each Distribution Date will be equal to the product of (a) the
excess of (i) the Weighted Average of the Pass-Through Rate on the
Subaccounts for such Distribution Date over (ii) 6.950% per annum and
(b) 0.52356.
(3) The Class X-2 Certificates represent beneficial
ownership of the Class X-2 Components. The Class X-2 Certificates have
no Pass-Through Rate, but will be entitled to receive, on each
Distribution Date, the Class X-2 Component Interest Amount.
S-11
<PAGE> 13
(4) The Class R Certificates shall represent the
beneficial ownership of the residual interest in both the Pooling REMIC
and the Issuing REMIC. Following the division of the Class R
Certificates into two separately transferable, certificated and fully
registered certificates in accordance with Section 9(b) hereof, the
Class R-1 registered Certificates shall have a Certificate Principal
Balance of $100 (unless previously paid) and a Pass-Through Rate of
6.950%, and shall represent the residual interest in the Issuing REMIC,
and the Class R-2 Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate and shall represent the residual
interest in the Pooling REMIC.
(5) For purposes of Treasury Regulation Section
1.860G-1(a)(4), the latest possible maturity date of each Class of
Certificates shall be the Final Scheduled Distribution Date.
SECTION 4. DENOMINATIONS.
The Book-Entry Certificates will be registered as one or more
certificates in the name of the Clearing Agency or its nominee. Beneficial
interests in the Book-Entry Certificates will be held by the Beneficial Owners
through the book-entry facilities of the Clearing Agency, in minimum
denominations of $1,000 and integral multiples of $1 in excess thereof, in
respect of the Class A Certificates, and in minimum denominations of $1,000,000
Notional Principal Amount and integral multiples of $1,000,000 in excess
thereof, with one Certificate of such Class evidencing an additional amount
equal to the remainder of the Notional Principal Amount thereof in respect of
the Class X-1 Certificates.
The Class B, Class X-2 and the Residual Certificates will be issued in
certificated, fully registered form. Each Class of the Class B Certificates will
be issued in minimum denominations of $100,000 and integral multiples of $1,000
in excess thereof, except that on Certificate of each Class may be issued in a
different denomination that evidences the remainder of the aggregate initial
Certificate Principal Balance of each such Class. The Class X-2 Certificates and
the Residual Certificates will be issued in minimum Percentage Interests equal
to 10%.
SECTION 5. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate the Available Distribution Amount to the
various Subaccounts, in the following manner and in the following order of
priority:
(i) First, concurrently, to each Senior Subaccount, (A)
first, its Interest Distribution Amount for such Distribution Date,
with the Available Distribution Amount being allocated among the Senior
Subaccounts pro rata based on their respective Interest Distribution
Amounts, and (B) second, the related Carryover Interest Amount for such
Distribution Date, if any, with the Available Distribution Amount being
allocated among the Senior Subaccounts pro rata based on their
respective Carryover Interest Amounts;
(ii) Second, to the Senior Subaccounts, the Senior
Principal Distribution Amount allocated sequentially to the Senior
Subaccounts first to the Class R Subaccount
S-12
<PAGE> 14
and thereafter to the Class A Subaccounts in the order of their
numerical designations, in each case in reduction of the Subaccount
Principal Balance of each such Subaccount, until it has been reduced to
zero; provided, however, that on any Distribution Date on which either
(A) the Pool Scheduled Principal Balance is less than the aggregate
Subaccount Principal Balance of the Senior Subaccounts immediately
prior to such Distribution Date or (B) is the Credit Support Depletion
Date, the Senior Principal Distribution Amount will be allocated among
the Senior Subaccounts pro rata based upon their respective Subaccount
Principal Balances;
(iii) Third, to the Class B-1 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
(iv) Fourth, to the Class B-1 Subaccount, the
Corresponding Certificates' Pro Rata Portion of the Subordinate
Principal Distribution Amount in reduction of the related Subaccount
Principal Balance, until it has been reduced to zero;
(v) Fifth, to the Class B-2 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
(vi) Sixth, to the Class B-2 Subaccount, the Corresponding
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the related Subaccount Principal
Balance, until it has been reduced to zero;
(vii) Seventh, to the Class B-3 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
(viii) Eighth, to the Class B-3 Subaccount, the
Corresponding Certificates' Pro Rata Portion of the Subordinate
Principal Distribution Amount in reduction of the related Subaccount
Principal Balance, until it has been reduced to zero;
(ix) Ninth, to the Class B-4 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
(x) Tenth, to the Class B-4 Subaccount, the Corresponding
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the related Subaccount Principal
Balance, until it has been reduced to zero;
(xi) Eleventh, to the Class B-5 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
(xii) Twelfth, to the Class B-5 Subaccount, the
Corresponding Certificates' Pro Rata Portion of the Subordinate
Principal Distribution Amount in reduction of the related Subaccount
Principal Balance, until it has been reduced to zero;
(xiii) Thirteenth, to the Class B-6 Subaccount, the related
Interest Distribution Amount for such Distribution Date;
S-13
<PAGE> 15
(xiv) Fourteenth, to the Class B-6 Subaccount, the
Corresponding Certificates' Pro Rata Portion of the Subordinate
Principal Distribution Amount in reduction of the related Subaccount
Principal Balance, until it has been reduced to zero; and
(xv) Finally, any remainder to Holders of the Pooling
REMIC Residual Interest.
(b) On each Distribution Date, after all Subaccount allocations
have been made as described in Section 5(a) above, the Trustee (or the Paying
Agent on behalf of the Trustee) shall withdraw all amounts allocated to the
various Subaccounts, and shall distribute such amounts in the following manner
and in the following order of priority:
(i) First, concurrently, to each Class of Senior
Certificates, its Interest Distribution Amount for such Distribution
Date, with the Available Distribution Amount being allocated among such
Classes pro rata based on their respective Interest Distribution
Amounts for such Distribution Date;
(ii) Second, to the Senior Certificates (other than the
Class X Certificates), the Senior Principal Distribution Amount
allocated first to the Class R Certificates and next sequentially to
each Class of the Class A Certificates in the order of their numerical
designations, in each case in reduction of the Certificate Principal
Balance of each such Class, until it has been reduced to zero;
provided, however, that on any Distribution Date which is on or after
the Credit Support Depletion Date, the Senior Principal Distribution
Amount will be allocated among the Senior Certificates (other than the
Class X Certificates) pro rata based upon their respective Certificate
Principal Balances immediately prior to such Distribution Date;
(iii) Third, to the Class B-1 Certificates, the related
Interest Distribution Amount for such Distribution Date;
(iv) Fourth, to the Class B-1 Certificates, the Class B-1
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
(v) Fifth, to the Class B-2 Certificates, the related
Interest Distribution Amount for such Distribution Date;
(vi) Sixth, to the Class B-2 Certificates, the Class B-2
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
(vii) Seventh, to the Class B-3 Certificates, the related
Interest Distribution Amount for such Distribution Date;
(viii) Eighth, to the Class B-3 Certificates, the Class B-3
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
S-14
<PAGE> 16
(ix) Ninth, to the Class B-4 Certificates, the related
Interest Distribution Amount for such Distribution Date;
(x) Tenth, to the Class B-4 Certificates, the Class B-4
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
(xi) Eleventh, to the Class B-5 Certificates, the related
Interest Distribution Amount for such Distribution Date;
(xii) Twelfth, to the Class B-5 Certificates, the Class B-5
Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
(xiii) Thirteenth, to the Class B-6 Certificates, the
related Interest Distribution Amount for such Distribution Date;
(xiv) Fourteenth, to the Class B-6 Certificates, the Class
B-6 Certificates' Pro Rata Portion of the Subordinate Principal
Distribution Amount in reduction of the Certificate Principal Balance
of such Class, until it has been reduced to zero;
(xv) Fifteenth, to the Trustee, for any unpaid expenses;
and
(xvi) Finally, any remainder to the holders of the Issuing
REMIC Residual Interest.
(c) All distributions or allocations made with respect to each
Class on each Distribution Date shall be allocated pro rata among the
outstanding Certificates of such Class based on their respective Percentage
Interests. So long as the Book-Entry Certificates are registered in the name of
a Clearing Agency or its nominee, the Trustee shall make all distributions or
allocations on such Certificates by wire transfers of immediately available
funds to the Clearing Agency or its nominee. In the case of Certificates issued
in fully-registered, certificated form, payment shall be made either (i) by
check mailed to the address of each Certificateholder as it appears in the
Certificate Register on the Record Date immediately prior to such Distribution
Date or (ii) by wire transfer of immediately available funds to the account of a
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the Trustee in writing at least five Business Days
prior to the Record Date immediately prior to such Distribution Date and such
Holder is (A) with respect to any Class B Certificates issued on or after the
Closing Date in certificated, fully-registered form, the registered owner of
Class A Certificates or Class B Certificates with an aggregate initial
Certificate Principal Balance of at least $1,000,000, and (B) with respect to
the Residual Certificates or Class X Certificates, the registered owner of the
Residual Certificates or Class X Certificates evidencing an aggregate Percentage
Interest of at least 50%. The Trustee may charge any Holder its standard wire
transfer fee for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
S-15
<PAGE> 17
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms.
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any Distribution
Date after all distributions required to be made by this Pooling and Servicing
Agreement have been made, and any amounts remaining in the Issuing REMIC after
payment in full of the Regular Interests therein and any administrative expenses
associated with the Trust, will be distributed to the Holders of the Issuing
REMIC Residual Interest.
SECTION 6. ALLOCATION OF REALIZED LOSSES.
On each Distribution Date, after all required distributions have been
made on the Certificates pursuant to Section 5 above, Realized Losses, if any,
shall be allocated on such Distribution Date in the following manner and in the
following order of priority:
(i) First, to the Class B-6 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero;
(ii) Second, to the Class B-5 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero;
(iii) Third, to the Class B-4 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero;
(iv) Fourth, to the Class B-3 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero;
(v) Fifth, to the Class B-2 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero;
(vi) Sixth, to the Class B-1 Subaccount, to be applied in
reduction of the Subaccount Principal Balance of such Subaccount, until
the Subaccount Principal Balance has been reduced to zero; and
S-16
<PAGE> 18
(vii) Finally, to each Class A Subaccount, pro rata, to be
applied in reduction of the Subaccount Principal Balances of such
Subaccounts, until each such Subaccount Principal Balance has been
reduced to zero.
Realized Losses allocated to the Class B-6, Class B-5, Class B-4, Class
B-3, Class B-2, Class B-1 and Class A Subaccounts pursuant to this Section 6
shall be allocated to the Class B-6, Class B-5, Class B-4, Class B-3, Class B-2,
Class B-1 and Class A Certificates, respectively, until the Certificate
Principal Balance of each such Class has been reduced to zero.
SECTION 7. REMITTANCE REPORTS.
(a) The Remittance Report for each Distribution Date shall
identify the following items, in addition to the items specified in Section 4.01
of the Standard Terms:
(1) the Interest Distribution Amount for each Class for
such Distribution Date and the Carryover Interest Amount, for each
Class of the Certificates for such Distribution Date;
(2) the amount to be distributed on such Distribution
Date on each Class of the Certificates to be applied to reduce the
Certificate Principal Balance of such Class (which will be equal to the
amount to be allocated on such Distribution Date on the Corresponding
Subaccount to be applied to reduce the Subaccount Principal Balance of
such Subaccount), separately identifying any portion of such amount
attributable to any prepayments;
(3) the aggregate amount, if any, to be distributed on
the Residual Certificates;
(5) the Certificate Principal Balance of each Class of
the Certificates (which will be equal to the Subaccount Principal
Balance of the Corresponding Subaccount) after giving effect to the
distributions to be made on such Distribution Date; and
(6) the aggregate Interest Distribution Amount remaining
unpaid, if any, and the aggregate Carryover Interest Amount remaining
unpaid, if any, for each Class of Certificates, after giving effect to
all distributions to be made on such Distribution Date.
In the case of information furnished pursuant to clauses (1), (2) and
(3) above, the amounts shall be expressed, with respect to any Class A, Class R
or Class B Certificate, as a dollar amount per $1,000 denomination, and in the
case of the Class X Certificates, as a dollar amount per $1,000,000 Notional
Principal Amount denomination.
(b) In addition to mailing a copy of the related Remittance Report
to each Certificateholder on each Distribution Date in accordance with Section
4.01 of the Standard Terms, on each Distribution Date, the Trustee shall mail a
copy of the related Remittance Report to the Underwriter (to the attention of
the person, if any, reported to the Trustee by the Underwriter), to the Seller
and to The Bloomberg (to the address and to the person, if any specified to the
Trustee by the Underwriter). The Trustee shall not be obligated to mail any
S-17
<PAGE> 19
Remittance Report to The Bloomberg unless and until the Underwriter shall have
notified the Trustee in writing of the name and address to which such reports
are to be mailed, which notice, once delivered, will be effective for all
Distribution Dates after the date such notice is received by the Trustee unless
and until superseded by a subsequent notice.
SECTION 8. MASTER SERVICER MAY RETAIN SERVICING FEES FROM COLLECTIONS.
The Master Servicer may retain its Servicing Fee and any other
servicing compensation provided for herein and in the Standard Terms from gross
interest collections on the Assets prior to depositing such collections into the
Certificate Account.
SECTION 9. REMIC ADMINISTRATION.
(a) For purposes of the REMIC Provisions, all of the Certificates
(except the Class X-2 Certificates and the Residual Certificates) and each of
the Class X-2 Components, will be designated as the "regular interests" in the
Issuing REMIC, the twelve Subaccounts will be designated as the "regular
interests" in the Pooling REMIC, the Class R Certificates will be designated as
the "residual interest" in each of the Issuing REMIC and the Pooling REMIC and,
following the division of the Class R Certificates into two separately
transferable, certificated and fully registered certificates in accordance with
Section 9(b) below, the Class R-1 Certificates will be designated as the
"residual interest" in the Issuing REMIC and the Class R-2 Certificates will be
designated as the "residual interest" in the Pooling REMIC.
(b) Upon the request of any registered Holder of a Class R
Certificate, the Trustee shall issue to such Holder two separately transferable,
certificated and fully registered Certificates (a Class R-1 Certificate and a
Class R-2 Certificate), in substantially the forms of Exhibit R-1 and Exhibit
R-2 attached hereto. In the event that the Class R Certificates are exchanged
for separately transferrable Class R-1 and Class R-2 Certificates: (1) the Class
R-1 Certificates will be designated as the residual interest in the Issuing
REMIC, (2) the Class R-2 Certificates will be designated as the residual
interest in the Pooling REMIC, (3) the Holders of a majority of the Percentage
Interest in the Class R-1 Certificates together with the Holders of a majority
of the Percentage Interest in the Class R-2 Certificates will have the option to
make a Terminating Purchase given to the Holders of a majority of the Percentage
Interest in the Residual Certificates pursuant to Section 9.01 of the Standard
Terms, and (4) the restrictions on the transfer of a Residual Certificate
provided in the Standard Terms will apply to both the Class R-1 and the Class
R-2 Certificates.
SECTION 10. VOTING RIGHTS.
The Voting Rights applicable to the Certificates shall be allocated
one-third of 1% to each of the Class R Certificates, the Class X-1 Certificates
and the Class X-2 Certificates, and 99% to each Class of the Class A
Certificates and the Class B Certificates, in proportion with their respective
Certificate Principal Balances on any date of determination.
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<PAGE> 20
SECTION 11. GOVERNING LAW.
The Pooling and Servicing Agreement shall be construed in accordance
with and governed by the laws of the State of New York applicable to agreements
made and to be performed therein. The parties hereto agree to submit to the
personal jurisdiction of all federal and state courts sitting in the State of
New York and hereby irrevocably waive any objection to such jurisdiction. In
addition, the parties hereto hereby irrevocably waive any objection that they
may have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement in any federal or state court sitting in the State
of New York, and further irrevocably waive any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
SECTION 12. FORMS OF CERTIFICATES.
Each of the Schedules and Exhibits attached hereto or referenced herein
are incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
SECTION 13. COUNTERPARTS.
This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 14. ENTIRE AGREEMENT.
This Pooling and Servicing Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
S-19
<PAGE> 21
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Trustee,
and the Contract of Insurance Holder each have caused this Pooling and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized and their respective signatures duly attested all as of the day and
year first above written.
UNION PLANTERS MORTGAGE FINANCE
CORP., AS DEPOSITOR
By: /s/ Joel R. Katz
-----------------------------------------
Name: Joel R. Katz
Title: President
UNION PLANTERS BANK, N.A., AS MASTER
SERVICER
By: /s/ James K. Plunkett
-----------------------------------------
Name: James K. Plunkett
Title: Senior Vice President
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ Franklin Austin
-----------------------------------------
Name: Franklin Austin
Title: Assistant Vice President
THE BANK OF NEW YORK, AS CONTRACT OF
INSURANCE HOLDER
By: /s/ Franklin Austin
-----------------------------------------
Name: Franklin Austin
Title: Assistant Vice President
ACKNOWLEDGED AND AGREED
- -----------------------
UNION PLANTERS BANK, N.A., AS
CLAIMS ADMINISTRATOR
By: /s/ James K. Plunkett
----------------------------
Name: James K. Plunkett
Title: Senior Vice President
S-20
<PAGE> 22
STATE OF TENNESSEE )
) s.
COUNTY OF SHELBY )
The foregoing instrument was acknowledged before me in the County of
Shelby this 26th day of May, 1998 by Joel R. Katz, the President of Union
Planters Mortgage Finance Corp., a Delaware corporation, on behalf of
the corporation.
/s/ Deborah K. McDaniel
-----------------------------------
Notary Public
My Commission expires: March 27, 2001
STATE OF NEW YORK )
) s.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me in the County of
New York this 27th day of May, 1998 by James K. Plunkett, a Senior Vice
President of Union Planters Bank, N.A., a national banking association, on
behalf of the association.
/s/ Andrea L. Howell
-----------------------------------
Notary Public
My Commission expires: November 10, 1999
S-21
<PAGE> 23
STATE OF NEW YORK )
) s.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me in the City of
New York, this 27th day of May, 1998, by Franklin Austin, an Assistant
Vice President of The Bank of New York, a New York banking corporation, on
behalf of the corporation.
/s/ Andrea L. Howell
-----------------------------------
Notary Public
My Commission expires: November 10, 1999
STATE OF NEW YORK )
) s.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me in the County of
New York this 27th day of May, 1998 by Franklin Austin, an Assistant
Vice President of The Bank of New York, a New York banking corporation, on
behalf of the corporation.
/s/ Andrea L. Howell
-----------------------------------
Notary Public
My Commission expires: November 10, 1999
S-22
<PAGE> 24
INDEX TO SCHEDULES AND EXHIBITS
SCHEDULE I Mortgage Loan Schedule
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 Form of Class A-4 Certificate
EXHIBIT A-5 Form of Class A-5 Certificate
EXHIBIT X-1 Form of Class X-1 Certificate
EXHIBIT X-2 Form of Class X-2 Certificate
EXHIBIT B-1 Form of Class B-1 Certificate
EXHIBIT B-2 Form of Class B-2 Certificate
EXHIBIT B-3 Form of Class B-3 Certificate
EXHIBIT B-4 Form of Class B-4 Certificate
EXHIBIT B-5 Form of Class B-5 Certificate
EXHIBIT B-6 Form of Class B-6 Certificate
EXHIBIT R Form of Class R Certificate
